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Informist, Monday, Feb. 10, 2025

 

--CONTEXT: NCLAT approved merger between Embassy group, Equinox India 
--SC rejects plea against Embassy group's merger scheme with Equinox India 

 

NEW DELHI – The Supreme Court Monday rejected an objector Tejo Ratna Kongara's plea against the merger of some residential and commercial projects of realty firm Embassy group with Indiabulls Real Estate Ltd., which changed its name to Equinox India Developments Ltd. in July. The National Company Law Appellate Tribunal in January had rejected the plea by Kongara and approved Embassy group's merger scheme with Equinox India.

 

The apex court said it has carefully perused the findings of the appellate tribunal. "In view of the finding, we find out no case is made out for interference. Appeal is accordingly dismissed," said the top court.

 

Kongara had sought substitution in place of one Dhanekula Dharanish, who had sought to intervene in the petition challenging the merger. Kongara had purchased 20,100 equity shares of Equinox India, previously owned by Dharanish.

 

Kongara also raised an issue concerning land leased by the Karnataka Industrial Areas Development Board to Concord India Pvt. Ltd., a subsidiary of Embassy Group's NAM Estates Pvt. Ltd., which is now known as Embassy East Business Pvt. Ltd. Kongara said that resumption proceedings were initiated by the Karnataka Board in 2023 for violations of lease terms and interim orders were issued by the Karnataka High Court, which ought to have been duly disclosed by Embassy group.

 

The appellate tribunal had noted that as of the valuation date, Concord India's land was in the possession of the Embassy group and remains with them. The high court had ordered the Karnataka Board to conduct an inquiry into violations of lease terms by Embassy East Business, according to the appellate tribunal. Following the inquiry, the Karnataka Board issued a ruling in favour of Embassy East Business.

 

This order of Karnataka Board has been challenged before the high court and it was still pending, the appellate tribunal said. Since this land and the land holding company are not part of the present scheme of amalgamation, it is not likely to impact the approval of the scheme, the appellate tribunal had observed. 

 

In 2020, the Embassy group had entered into a scheme of arrangement to merge NAM Estates Pvt. Ltd. and Embassy One Commercial Property Developments Pvt. Ltd. into Equinox India. This would make Embassy group the promoter of the proposed entity. The Competition Commission of India and the Bengaluru bench of the National Company Law Tribunal had approved the merger in 2021 and 2022, respectively. 

 

However, in 2023, the Chandigarh bench of the National Company Law Tribunal withheld sanction to the merger after objections from the income tax department. Challenging this, Equinox India had moved the appellate tribunal, which approved the merger in January.

 

At 1314 IST, shares of Equinox India Developments traded at INR 145.20 in the National Stock Exchange, down 2.8%.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Subhojit Sarkar

 

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