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NCLT Mumbai Sanctions Adani Power's Scheme of Amalgamation and Dissolves Vidarbha Industries Power Without Winding Up

Writer: Kaustav Chowdhury
Kaustav Chowdhury
4 days ago
6 min read

Background and Facts

A scheme of amalgamation that folds ten subsidiaries into their listed parent has been sanctioned at the second motion stage, and one of the transferor companies came into the group through insolvency only last year. The Mumbai bench of the National Company Law Tribunal has sanctioned the composite scheme merging ten group companies into Adani Power Limited. The order, made in the petition concerning Vidarbha Industries Power Limited, was reported on September 25, 2026 and was passed by a Bench of Vinay Goel, Judicial Member, and Charanjeet Singh Gulati, Technical Member.

The transferor companies are Adani Power Dahej Limited, Kutchh Power Generation Limited, Resurgent Fuel Management Limited, Mahan Fuel Management Limited, Orissa Thermal Energy Limited, Korba Power Limited, Anuppur Thermal Energy (MP) Private Limited, Mirzapur Thermal Energy (UP) Private Limited, Emberiza Infra Park Limited and Vidarbha Industries Power Limited. The appointed date is April 1, 2025. Shares held by Adani Power and its nominees in the transferor companies are cancelled, with no fresh shares issued for those holdings.

Vidarbha Industries Power Limited owns a 600 MW domestic coal fired plant at Butibori in Nagpur district. It was in the corporate insolvency resolution process, and Adani Power's resolution plan was approved by the same tribunal on June 18, 2025 and implemented on July 7, 2025 for an aggregate consideration of Rs 4,000 crore.

Key Legal Issue

Whether a composite scheme of amalgamation satisfied the requirements of Sections 230 and 232 of the Companies Act, 2013 so that it could be sanctioned, and whether the transferor companies could accordingly be dissolved without being wound up.

The Tribunal's Ruling

The scheme was sanctioned. The Bench recorded its conclusion in the familiar formula:

"The Scheme of Amalgamation appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy". Vidarbha Industries Power Limited stands dissolved without winding up, and its property, rights and liabilities vest in Adani Power Limited.

What the Second Motion Actually Tests

Section 230(1) allows the Tribunal, on an application, to order meetings of creditors or members, or classes of them, to consider a proposed compromise or arrangement. Section 232(1) applies that machinery where the scheme involves a merger or amalgamation, and Section 232(2) prescribes what has to be circulated before the meeting: the draft scheme, confirmation of filing with the Registrar, a directors' report on the effect on each class of shareholder including the exchange ratio, the expert's valuation report where one is made, and a supplementary accounting statement where the annual accounts are more than six months old.

That is the first motion. The second motion is the petition for sanction, and it is an enquiry into compliance rather than into commercial merit: whether the meetings were held or lawfully dispensed with, the statutory majority obtained, the authorities entitled to notice served, and the accounting treatment certified. Section 230(9) permits a creditors' meeting to be dispensed with where creditors representing at least ninety per cent in value agree by affidavit, which is how most intra group schemes avoid one.

Regulator Observations Are Answered, Not Overridden

Section 230(5) requires notice of the meeting and the scheme to go to the Central Government, the Registrar of Companies, the income-tax authorities, the Reserve Bank of India, the Securities and Exchange Board of India, the stock exchanges, the Competition Commission of India and any other sectoral regulator likely to be affected. Those authorities have thirty days to make representations, and if none is made within that period it is presumed that they have no representations to make.

The observations here followed the usual pattern. The Income-tax Department reserved its right to examine any tax liability arising out of the scheme and recorded that pending proceedings would stand transferred to Adani Power. The Official Liquidator reported that the affairs of Vidarbha Industries Power had not been conducted in a manner prejudicial to the interests of creditors or to the public interest. No objection was received from any creditor or other authority.

The point of practical importance is that a reservation of rights by the revenue is not an objection and does not delay sanction. It survives the order, so the transferee takes the transferor's assessments and demands along with its assets.

Dissolution Without Winding Up, and the Appointed Date

Section 232(3) lists what the sanction order may provide for. Clause (a) covers the transfer to the transferee company of the whole or any part of the undertaking, property or liabilities of the transferor. Clause (c) preserves pending proceedings, which may be continued by or against the transferee. Clause (d) is the provision under which a transferor company is dissolved without winding up, so that no liquidator is appointed and no winding up petition is needed.

Section 232(6) requires the scheme to indicate clearly an appointed date from which it is to be effective, and provides that it shall be deemed effective from that date and not from a date subsequent to it. Section 232(5) requires every company to which the order applies to file a certified copy with the Registrar within thirty days of receiving it, and Section 232(7) requires an annual certified statement of compliance until the scheme is fully implemented, with a penalty of up to three lakh rupees for default.

A Company Attached to a Contested Insolvency Precedent

Vidarbha Industries Power is not an unfamiliar name. It gave its name to the decision in Vidarbha Industries Power Limited v. Axis Bank Limited, (2022) 8 SCC 352, decided on July 12, 2022, in which the Supreme Court read the power of the adjudicating authority under Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016 as discretionary rather than obligatory once default was established. The Court returned to the earlier position in M. Suresh Kumar Reddy v. Canara Bank, decided on May 11, 2023, holding that the Vidarbha decision could not be read as contrary to Innoventive Industries and E.S. Krishnamurthy. The company that carried that argument has now been resolved, acquired and dissolved without winding up.

Practice Notes

In practice, the order is a useful checklist for anyone taking a group reorganisation through the tribunal:

  • Build the second motion on the first motion record: Annex the first motion order, the affidavits of service, the chairperson's reports and the auditor's certificate on accounting treatment, and plead compliance item by item rather than in general terms.

  • Serve every authority Section 230(5) names: The presumption that an authority has no representation to make arises only if the authority was served and stayed silent for thirty days. A gap in service is the most common reason a sanction petition is adjourned.

  • Ask for dissolution expressly: Dissolution without winding up is something the Tribunal may provide for under Section 232(3), not something that follows from sanction. It belongs in the prayer, along with a direction on the custody of books and records.

  • Fix the appointed date with the transaction history in view: Section 232(6) does not allow the scheme to take effect after the appointed date, so the date has to be one the petitioner can justify. Where a transferor was acquired through a resolution plan, check that it sits consistently with the plan's treatment of past liabilities.

  • Diarise the post-sanction filings: The certified copy goes to the Registrar within thirty days under Section 232(5), and the compliance statement under Section 232(7) continues until the scheme is fully implemented.

Key Provisions Discussed

  • Section 230 of the Companies Act, 2013: Power of the Tribunal to order meetings of creditors or members to consider a compromise or arrangement, with sub-section (5) requiring notice to the Central Government, the Registrar, the income-tax authorities and the other regulators named, and sub-section (9) allowing a creditors' meeting to be dispensed with on the agreement of creditors representing at least ninety per cent in value.

  • Section 232 of the Companies Act, 2013: Merger and amalgamation of companies, with sub-section (2) prescribing the documents to be circulated, sub-section (3) listing what the sanction order may provide for including the transfer of property and liabilities and dissolution without winding up, sub-section (5) requiring the certified copy to be filed with the Registrar within thirty days, sub-section (6) requiring an appointed date, and sub-section (7) requiring an annual statement of compliance.

  • Section 7 of the Insolvency and Bankruptcy Code, 2016: Initiation of the corporate insolvency resolution process by a financial creditor, with sub-section (5)(a) providing for admission where a default has occurred.

Case Details

  • Case: Petition for sanction of a composite scheme of amalgamation of ten group companies with Adani Power Limited

  • Tribunal: National Company Law Tribunal, Mumbai Bench

  • Bench: Vinay Goel, Judicial Member, and Charanjeet Singh Gulati, Technical Member

  • Reported: September 25, 2026

  • Transferee Company: Adani Power Limited

  • Appointed Date: April 1, 2025

  • Related Insolvency: Resolution plan for Vidarbha Industries Power Limited approved on June 18, 2025 and implemented on July 7, 2025 for Rs 4,000 crore

  • Outcome: Scheme sanctioned. Vidarbha Industries Power Limited dissolved without winding up.

Sources and References


Disclaimer: This article is for informational purposes only and does not constitute legal advice. Readers should consult a qualified legal professional for advice specific to their circumstances.

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