NCLAT Approves Amalgamation Scheme Using DCF Method, Criticizes NCLT for Overruling Shareholders' Commercial Judgment Under Companies Act Sections 230-232.

The NCLAT allowed the appeal and sanctioned the scheme of amalgamation u/ss 230-232 of the Companies Act, 2013. It held that the DCF method used for share valuation was a recognised method, and the valuers and amalgamating companies cannot be faulted for using it. No statutory or regulatory authority, except the Income Tax Department, raised objections. The NCLAT relied on the Supreme Court's decision in Miheer H. Mafatlal v. Mafatlal Industries Ltd., which stated that once the exchange ratio is determined by experts, courts should not substitute it if accepted by an overwhelming majority of shareholders acting bona fide. The NCLAT concluded that the NCLT erred in interfering with the scheme against the commercial wisdom of shareholders, creditors, and directors. .....

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