NCLT Sanctions Major Composite Scheme of Arrangement for Lily Commercial Pvt. Ltd.

New Delhi Bench Approves Amalgamation and Demerger with Stringent Compliance and Safeguards

The National Company Law Tribunal (NCLT), New Delhi Special Bench, has sanctioned a comprehensive Composite Scheme of Arrangement involving Lily Commercial Private Limited and DCM Shriram Industries Limited, along with its subsidiaries. The judgment, delivered on November 21, 2025, by a bench comprising Sh. Ashok Kumar Bhardwaj and Sh. Ravindra Chaturvedi, permits the amalgamation of Lily Commercial Pvt. Ltd. with DCM Shriram Industries Ltd., followed by the demerger of its Chemical and Rayon undertakings into two resulting companies.

The court approved the scheme under Sections 230 to 232 of the Companies Act, 2013, after ensuring compliance with all regulatory, statutory, and taxation provisions. This decision comes after an overwhelming approval from shareholders and creditors, with directives to ensure the safeguarding of stakeholders' interests.

A significant aspect of the judgment was the tribunal's emphasis on compliance with tax obligations, explicitly stating that the approval of the scheme does not grant any exemption from existing tax liabilities. The Income Tax Department retains the authority to assess tax implications, with the Transferee and Resulting Companies assuming responsibility for their respective tax obligations.

The tribunal also addressed concerns raised by the Registrar of Companies and the Official Liquidator, ensuring that the scheme's implementation does not prejudice the interests of stakeholders. The court emphasized that any deviation from the undertakings given to the regulatory authorities could render the order non-est.

The effective date for the scheme is set as April 1, 2023, and includes strict directions for the transfer of liabilities, obligations, and employees to the newly formed entities without interruption or alteration in terms. The judgment mandates the continued pursuit of any pending investigations or proceedings against the involved companies, ensuring that regulatory compliance is maintained.

This landmark ruling highlights the NCLT's commitment to balancing corporate restructuring with robust regulatory oversight, ensuring that such schemes are in the best interest of all stakeholders involved.

Bottom Line:

Composite Scheme of Arrangement involving amalgamation and demerger under Sections 230 to 232 of the Companies Act, 2013, sanctioned with specific directions and compliance requirements for all stakeholders and statutory authorities.

Statutory provision(s): Companies Act, 2013 Sections 230, 231, 232; Income Tax Act, 1961

Lily Commercial Private Limited, (NCLT)(New Delhi Special Bench) : Law Finder Doc Id # 2819746