National Company Law Appellate Tribunal
Ras Al Khaima Investment Authority vs Matrix Pharma Private Limited on 6 August, 2025
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
AT CHENNAI
(APPELLATE JURISDICTION)
(Company Appeal (AT) (CH) No. 46 / 2025)
(IA Nos. 554, 555 & 556 / 2025)
In the matter of:
Ras Al Khaimah Investment Authority (``RAKIA'')
P.O. Box 31291, Ras Al Khaimah,
United Arab Emirates,
Represented by its authorised Representative,
Mr. Kalyan Chakravarthy, R/o. Hyderabad ... Appellant
V
Tianish Laboratories Pvt. Ltd.
Plot No.564/A/22, Road No. 92,
Jubilee Hills, Film Nagar, Shaikpet,
Hyderabad.
Telangana, India - 500096
Represented by its director
Ms. Jyothibasu Abbineni ... Respondent No. 1
Matrix Pharmacorp Private Limited
(previously, Matrix Pharma Private Limited)
104, Srinivasa Towers,
6-3-1187, Green Lands, Begumpet,
Secunderabad, Hyderabad,
Telangana - 500016
Represented by its Director
Mr. Pranav Gunupati Venkata Reddy ... Respondent No. 2
Present :
For Appellant : Mr. R. Sankaranarayanan, Senior Advocate,
Mr. Vivek Reddy, Senior Advocate,
Mr. Arjun Suresh & Ms. Arthi Fernandes, Advocates
For Respondents : Mr. PH. Arvindh Pandian, Senior Advocate,
Mr. Niranjan Reddy, Senior Advocate,
Mr. Jerin Asher Sojan & Mr. Naresh Kumar Sangam,
Advocates for R1 & R2
WITH
CA (AT) (CH) Nos. 46 & 47 / 2025 Page 1 of 24
(Company Appeal (AT) (CH) No. 47 / 2025)
(IA No. 557/2025)
In the matter of:
Ras Al Khaimah Investment Authority (``RAKIA'')
P.O. Box 31291, Ras Al Khaimah,
United Arab Emirates,
Represented by its authorised Representative,
Mr. Kalyan Chakravarthy, R/o. Hyderabad ... Appellant
V
Tianish Laboratories Pvt. Ltd.
Plot No.564/A/22, Road No. 92,
Jubilee Hills, Film Nagar, Shaikpet,
Hyderabad.
Telangana, India - 500096
Represented by its director
Ms. Jyothibasu Abbineni ... Respondent No. 1
Matrix Pharmacorp Private Limited
(previously, Matrix Pharma Private Limited)
104, Srinivasa Towers,
6-3-1187, Green Lands, Begumpet,
Secunderabad, Hyderabad,
Telangana - 500016
Represented by its Director
Mr. Pranav Gunupati Venkata Reddy ... Respondent No. 2
Present :
For Appellant : Mr. R. Sankaranarayanan, Senior Advocate,
Mr. Vivek Reddy, Senior Advocate,
Mr. Arjun Suresh & Ms. Arthi Fernandes, Advocates
For Respondents : Mr. PH. Arvindh Pandian, Senior Advocate,
Mr. Niranjan Reddy, Senior Advocate,
Mr. Jerin Asher Sojan & Mr. Naresh Kumar Sangam,
Advocates for R1 & R2
CA (AT) (CH) Nos. 46 & 47 / 2025 Page 2 of 24
JUDGMENT
(Hybrid Mode) Per : Justice Sharad Kumar Sharma, Member (Judicial):
1. These are two Company Appeals.
2. In Company Appeal (AT) (CH) No. 46 / 2025, the Appellant challenges the Impugned Order dated 10.03.2025 (as corrected and made available to parties on 25.03.2025, as it was passed in CP (CAA) No.34/230/HDB/2024 in CA(CAA) No.25/230/HDB/2024. As a consequence of the Impugned Order dated 10.03.2025, passed in CP (CAA) No. 34 / 230 / HDB / 2024, the proposal of amalgamation of the two enterprises namely Tianish Laboratories Private Limited (Tianish) and Matrix Pharmacorp Private Limited (Matrix), have been sanctioned, based upon the ``Scheme of Amalgamation'', which has been approved by the Board of Directors of the respective Companies.
3. During the proceedings as referred to as above, when the issue of merger was being considered, the Appellant had filed an Intervention Application being Intervention petition No. 4 / 2024 in CP(CAA) No. 34/230/HDB/2024, in CA (CAA) No. 25/230/HDB/2024 which has been dismissed by the Impugned Order dated 10.03.2025 (as corrected and made available to the parties on 18.03.2025), which has been put to challenge in Company Appeal (AT) (CH) No. 47 / 2025.CA (AT) (CH) Nos. 46 & 47 / 2025 Page 3 of 24
4. Since, both these Company Appeals involve consideration of a common question of fact and law, hence, for the purposes of brevity, they are being decided together.
5. We will take up the Company Appeal (AT) (CH) No. 47 / 2025 first because, understanding the logic behind the order of rejection of the Intervention Application of the Appellant which has been challenged therein, will provide key inputs for dealing with the issues involved in the Company Appeal (AT) (CH) No. 46 / 2025, where the Appellant puts the challenge to the Order of Sanction of the Scheme of Amalgamation of ``Tianish'' and ``Matrix''.
6. It transpires from records that, as a consequence of the approval of the Scheme of Amalgamation by the respective Boards of Directors and consequent approval of the Scheme by Ld. NCLT, ``Tianish Laboratories Private Limited'', the Respondent No. 1 herein i.e. the ``Transferor Company'' and ``Matrix Pharmacorp Private Limited'', the Respondent No. 2 herein i.e. the ``Transferee Company'', stood amalgamated.
7. The Respondents collectively have contended that, the ``Scheme of Amalgamation'', has been jointly approved in the meeting which was held on 04.07.2024.
8. The Appellant has filed independent Appeals being aggrieved as against the order of rejection of his intervention application and the order of the approval of CA (AT) (CH) Nos. 46 & 47 / 2025 Page 4 of 24 merger. The merged entities i.e. ``Tianish'' and ``Matrix'', have expressed apprehension that, the proceedings in which we are going to consider the issue in relation to the implications of the order of amalgamation, as well as, that of the rejection of the Intervention Petition and observations made therein may result in deprivation of their right to put a challenge independently to the order of 10.03.2025 with regards to the merger, so far it relates to certain restrictions, which has been imposed by the Impugned Order, as that particularly contained in Para XIX of the Impugned order dated 10.03.2025 and prayed that their rights to that effect may be protected.
9. We make it clear that in this Appeal, since we are only touching about the implications of the Intervention petition, any observations which are made herein, will not be read in deprivation of the rights of the Respondents, to put a challenge to the findings recorded in the order of 10.03.2025 in CP (CAA) No.34/230/HDB/2024 in CA (CAA) No.25/230/HDB/2024, which they feel to be adverse to their interest.
10. The Appellant has come up with the case in the Appeal, that one Mr. Nimmagada Prasad, who is an Indian Citizen, directly and indirectly through his family members, controls and owns a web of companies including the Respondent Companies as the Respondents are affiliated with Iquest Enterprises Pvt. Ltd.
11. The Appellant i.e. ``RAKIA'' has contended that it is a Judgment Creditor of Nimmagada Prasad and by extension he will be the Judgment Creditor of CA (AT) (CH) Nos. 46 & 47 / 2025 Page 5 of 24 ``Matrix'' and ``Tianish'', because he claims that they are the part of Nimmagada Prasad's web of companies which operate as a single economic unit through Nimmagada Prasad (or his family) in disregard to their separate corporate and independent personalities.
12. The Appellant has contended that, it secured a decree dated 02.02.2022 from Ras Al Khaimah Court of First Instance, Civil Plenary Circuit in Civil case No. 60 of 2020 against Mr. Nimmagada Prasad, and on 05.09.2023 it filed an Execution Petition being CEP No. 19 of 2023 before Principal Special Court for Trial and Disposal of Commercial Disputes, City Civil Court, Hyderabad for executions of the said Decree. While the same was pending, in October 2023, RAKIA identified that Mr. Nimmagada Prasad, through one of his entities i.e. Iquest Enterprises Pvt. Ltd. is in the process of entering into a transaction involving the acquisition of an active pharmaceutical ingredients business from Viatris Inc. with assets worth approx. USD 1.2 Billion, without satisfying the debt of RAKIA (the ``Judgment Creditor''). Accordingly it filed 3 commercial execution Applications to add IQuest as a party to CEP proceedings (CEA 157/2023), to add assets of IQuest in the schedule of assets to the commercial Execution Petition (CEP) (CEA 158/2023) and for an injunction against assets of IQuest (CEA 156/2023).
13. The Commercial Court in Hyderabad took up the matter and vide its order of 01.05.2024, recorded the undertaking of Iquest Enterprises Pvt. Ltd. in Execution Petition proceedings to the effect that ``Iquest, was initially interested CA (AT) (CH) Nos. 46 & 47 / 2025 Page 6 of 24 in acquiring the assets of `'Viatris'' and subsequently they have decided not to go ahead with the same.''
14. Appellant has further submitted, that despite of the aforesaid undertaking as recorded in the said order dated 01.05.2024 of the Commercial Court, Nimmagada Prasad, Swathi (daughter of Nimmagada Prasad), IQuest and Viatris willfully disobeyed the orders passed by the Commercial Court, by completing the acquisition transaction on 03.06.2024, by restructuring the acquisition route from IQuest - Matrix to Mudhra - Matrix.
15. The Appellant has come up with the case that, on 11.07.2024, they have filed a Contempt Petition being Contempt Case No. 1378 of 2024, before the Hon'ble Telangana High Court, as against Nimmagada Prasad, Swathi, IQuest and Viatris, seeking reversal of the transaction already carried out and stay of further steps in relation thereto. Looking to the inter se dispute amongst the parties, the Contempt Court has passed an Order of Status Quo on 19.07.2024, which is extracted below: -
"Heard Dr.Abhishek Manu Singhvi, learned Senior Counsel and Sri K.Vivek Reddy, learned Senior Counsel for Sri G.Vamshi Krishna, learned counsel for the petitioner, and perused the record.
Petitioner by drawing the attention of this Court to various documents filed and the order of the Commission of India under Section 31 of the Competition Act, 2002, contends that the 1t respondent-contemnor, having made statement to the Principal Special Court in the Cadre of District Judge for trial CA (AT) (CH) Nos. 46 & 47 / 2025 Page 7 of 24 and Disposal of Commercial Disputes, Hyderabad, of not proceeding with the transaction of purchase of APl business with 3d respondent/contemnor, and in contravention of the said undertaking, have entered into transaction in surreptitious manner to circumvent the undertaking / statement made to the Court, indirectly through its subsidiaries/affiliates.
It is further contended that if the respondent-contemnors are allowed to deal with or enter into further transactions, may create third party interest, in further breach of the undertaking thereby adversely affecting the interest of the petitioner.
Prima facie I find force in the aforesaid submissions. In view of the same, respondent Nos. 1, 2 and 4 are hereby directed to maintain status quo in relation to transactions in dispute existing as on today to be maintained till next date of hearing.''
16. It will not be out of context to mention that Respondents 1,2 & 4 as mentioned in the above order are IQuest, Swathi & Nimagadda Prasad respectively and that the Transferor and the Transferee Companies in the instant case, i.e. Tianish Laboratories Private Limited (Tianish) and Matrix Pharmacorp Private Limited (Matrix), do not find a place there nor they were made as a party to the proceedings either before the Commercial Court or before the Contempt Court.
17. The cause title of the contempt proceedings of Contempt Case No. 1378 of 2024 reads as under:
``Ras Al Khaimah Investment Authority (RAKIA), P.O. Box 31291, Ras AI Khaimah, United Arab Emirates, Represented by its Authorized Representative, Mr. Kalyan Chakravarthy, R/o. Hyderabad.
Petitioner CA (AT) (CH) Nos. 46 & 47 / 2025 Page 8 of 24 (Petitioner in CC. No. 1378 of 2024 on the file of the High Court
1. IQuest Enterprises Private Ltd., 104, 4h Floor, F- Block, Surya Towers, S P Road, Secunderabad, Hyderabad, Telangana 500003, Represented by its Authorised Signatory Mr.Srinu Jala, S/o. Venkateshwarlu Jala Contemnor No.1
2. Ms. Swathi Gunupati Reddy, C-10, Armed Forces Officers Co-operative Housing Society, Kapra (M), Kapra, Medchal- Malkajgiri, Telangana 500094 Contemnor No.2
3. Viatris Inc., Having its office at Plot No.564/A/22, Road No 92, Jubilee Hills, Hyderabad, Telangana 500 034, India Viatris Inc. Represented by its Authorised Signatory, Robert J.
Coury Global Center, 1000 Mylan Boulevard Canonsburg, Pennsylvania - 15317 Contemnor No.3 (Leave granted to file the present CC against RRI to 3 as per the Hon'ble Court Order dtd. 19.07.2024 in IA No.5/2024 in CC No.1378 of 2024).
4. Mr. Nimmagadda Prasad, Plot No. 242- B, Road No. 76, Jubilee Hills, Hyderabad, Telangana - 500033 Contemnor No.4 Respondents (Respondents in -do-)
18. Thus, it is to be noted that in the contempt proceedings, which was drawn, neither `Matrix' (the Transferor) nor `Tianish' (the Transferee Company) were made a party, to the said proceedings of the contempt. Appellant has stated that, CA (AT) (CH) Nos. 46 & 47 / 2025 Page 9 of 24 subsequently they were sought to be impleaded as party, by filing of IA.No.11 of 2024 in Contempt Case No. 1378 of 2024.
19. On the basis of the said Interim Order, which was granted in the contempt proceedings, directing the parties to maintain a Status Quo as on 19.07.2024, it is being contended by the Appellant that the Scheme of Amalgamation of the Transferor and the Transferee Company, proposed by them and approved by Ld. NCLT, would be bad in the eyes of law being in violation of the order dated 19.07.2024, where the parties were directed to maintain a Status Quo. This contention of the Appellant is being made on a presumption that the order of the Status Quo, as it was granted in the contempt proceedings on 19.07.2024 will be equally binding on ``Tianish'' and ``Matrix'' even though they are not party to the proceedings of contempt, because they are inextricably linked to the transactions in dispute before the Commercial Court, Hyderabad, which the Appellant attempts to establish by referring to documents like Matrix CRISIL Report and Tianish CRISIL Report which were on record in the proceedings of amalgamation before Ld. NCLT, Hyderabad.
20. Thus, the question, which would emerge for consideration for us would be that, in a proceedings, which are held before the Commercial Court, whether at all, there could be a status quo order and an implied drawing of a contempt as against the Transferor or the Transferee Company, when they are neither a party to the principal proceedings before the Commercial Court, nor they are party to the CA (AT) (CH) Nos. 46 & 47 / 2025 Page 10 of 24 proceedings of the contempt, except for the applications filed to add them as party at a later stage, both in the Contempt proceedings as well as in the Commercial Execution Petition proceedings.
21. In response to the submissions of Ld. Counsel of the Appellant, the Ld. Counsel for the Respondents, has submitted that the arguments of the Ld. Counsel for the Appellant may not be sustainable for the reason being that, the Order of 19.07.2024, directing the Status Quo as on 19.07.2024, will apply to the transactions referred to therein and it cannot be read in relation to the issues in relation to the Amalgamation between 'Tianish' and 'Matrix', owing to its independent existence and a legal bearing.
22. If the order of the Contempt dated 19.07.2024 is taken into consideration, the same has been rendered by the Contempt Court i.e. the Hon'ble High Court of Telangana, while exercising their powers under Order XXXIX Rule (1) & (2) and in the context of an order which was passed by the Commercial Court, on 01.05.2024 in CEA No. 44 / 2024 in CEA No. 156 / 2024 in CEP No. 19 / 2023 and it had specifically recorded that, it finds merits in the submission of RAKIA that the Respondent No. 1 / Contemnor, Iquest Enterprises having made a statement before the Principal Special Court in the cadre of District Judge of 'not proceeding with transaction of purchase of API business from ``Viatris'', ' have entered into the said transaction indirectly through its subsidiaries and therefore, it directs R1 (IQuest), R2 (Swathi) and R4 (Nimagadda Prasad) , to maintain status quo 'as on CA (AT) (CH) Nos. 46 & 47 / 2025 Page 11 of 24 today'. It is apparent that, if the said contravention is taken as to be a reason for passing a Status Quo Order, it was limited to directing the aforesaid parties to maintain the Status Quo ``in relation to the transactions in dispute existing as on today''.
23. Thus, the said observation of the Order of the Status Quo dated 19.07.2024 will relate to the transactions between IQuest and Viatris and would be bound to be confined to be read, limited to the alleged transaction of acquisition of API business and to the parties involved therein i.e. Viatris and IQuest, and its scope for the purposes of contempt cannot be widened, to be read to make applicable in relation to the Transferor Company and Transferee Company i.e Tianish Laboratories Private Limited and Matrix Pharmacorp Private Limited who were party only to the amalgamation proceedings before Ld. NCLT which is an independent proceedings and who were not parties to CEP proceedings and corresponding Contempt proceedings and were only proposed to be made parties by filing of impleadment applications on which no orders are seem to have been passed till the passing of the impugned order.
24. In our view, the scope of the contempt cannot be widened beyond the ambit and purview of the principal proceedings, which were held before the Principal Special Court and beyond the orders passed on it. In view of the observation made in the Status Quo Order of 19.07.2024, it has to be confined to be read in relation to the use of the word ``transactions'', which has had to be read in the CA (AT) (CH) Nos. 46 & 47 / 2025 Page 12 of 24 context and in correlation of the execution proceedings, and it cannot be made to be extended in a distorted manner to be read as if the Order of Status Quo of 19.07.2024 created an absolute bar to the effect, that no proceedings of Amalgamation as contemplated under Section 230 of the Companies Act could at all be carried forward or if carried, it has to be treated to be in violation of the Status Quo Order, as it has been rendered in contempt proceedings arising out of the execution proceedings arising out of the Principal Special Court.
25. The Ld. Counsel for the Appellant has further referred to the provisions contained under Section 230 (2) (a) of the Companies Act, and has contended that the Respondents have indulged in suppression of information and this will render the amalgamation proceedings bad in law. Section 230(2)(a) of Companies Act stipulates that the Company or any other person, by whom an Application for compromise / arrangement is made under sub-section (1), shall disclose to the Tribunal by way of an Affidavit ``all material facts relating to the Company, such as latest financial position of the Company, latest Auditor's Report on the accounts of the Company and the pendency of any investigation or proceedings against the Company''. Ld. Counsel for the Appellant argues that, it was the duty of the Respondents to disclose the fact of Execution Petition proceedings, the contempt proceedings and the status quo order, in the proceedings of amalgamation which was being carried by way of CP(CAA) No.34/230/HDB/2024 to be read with CA (CAA) No.25/230/HDB/2024 which they did not do, thus vitiating the CA (AT) (CH) Nos. 46 & 47 / 2025 Page 13 of 24 proceedings. However, Ld. Counsel for the Respondents argues to the contrary that, in the light of the provisions contained under Sub Clause (a) of sub-section (2) of Section 230 of the Companies Act, the responsibility cast upon the Transferor or the Transferee Company, to disclose all material facts will be limited to those material facts, only in relation to the ambit and areas covered by Sub Clause (a) of sub-section (2) of Section 230.
26. Section 230 (2) (a) is extracted hereunder:
``(2)The company or any other person, by whom an application is made under subsection (1),shall disclose to the Tribunal by affidavit--
(a) all material facts relating to the company, such as the latest financial position of the company, the latest auditors report on the accounts of the company and the pendency of any investigation or proceedings against the company; ''
27. On a simpliciter reading of the aforesaid provision, it nowhere prescribes for that being the Applicants to the proceedings under Section 230 of the Companies Act, Respondents herein were required to disclose anything much more that what was contemplated under Section 230 of the Companies Act itself.
28. The Respondents further contends that, since the law has not contemplated any compulsion upon the parties to the proceedings under Section 230 of the Companies Act, to disclose the factum of the Status Quo Order passed in an execution proceeding, that too, when the Execution Petition was emanating from the proceedings and the orders passed by Ras-Al-Khaimah Court to which they are CA (AT) (CH) Nos. 46 & 47 / 2025 Page 14 of 24 not parties and when the Status Quo Order in a Contempt proceedings was confined to be related and to be read in relation to the transactions, specifically covered under execution proceedings which cannot be widened to be read, to be applied to the proceedings of amalgamation under Section 230 of the Companies Act, under any set of circumstances.
29. They have further submitted that in addition, since, in the proceedings under Section 31 of the Competition Act or in the execution proceedings or even in the contempt proceedings, the Transferor or Transferee have not been arrayed as a party till the passing of the order of sanction of scheme of Amalgamation, they cannot be expected to carry any mandatory obligation of making a disclosure of these proceedings as contemplated under Sub Clause (a) of sub-section 2 of Section 230 of the Companies Act, because grant of an Interim Order in a contempt proceedings will not amount to be an investigation or a proceedings, which would be relevant for the purposes of carrying out the proceedings under Section 230 of the Companies Act.
30. The Ld. Counsel for the Respondent has further elaborated his argument, by submitting that if the corresponding provision is taken into consideration, as contained under sub-section (2) of Section 391, as it existed in the Companies Act of 1956, and particularly, in the proviso to it, it did cast a responsibility of a disclosure of any fact relating to investigation or of proceedings in relation to the Company under Section 235 to Section 251, ``and the like proceedings''. After CA (AT) (CH) Nos. 46 & 47 / 2025 Page 15 of 24 the enactment of the Companies Act of 2013, there is no such provision, which is reserved to be applied under Section 230 of the Companies Act, which has the same implications, as that of the phrase ``and the like proceedings'', as contained under Section 391 of the Companies Act, 1956.
31. In other words, use of the word 'like proceedings' in the proviso section 391 (2) of the Companies Act of 1956, specifically meant to address aspect of disclosure of the investigation proceedings in relation to the Companies, opting for merger/amalgamation. Since, no such expression has been protected to be applied under Section 230 of the Companies Act of 2013, nor has it been incorporated, there is no legal obligation which stands created on part of the Respondents to have disclosed about the proceedings under Section 31 of the Competition Act (Mudhra- Matrix-Tianish combination) and the Execution Proceedings, because, these proceedings are independent altogether in their legislative intent and will not have any bearing to the proceedings of amalgamation, as it has been permitted to be carried under Section 230 of the Companies Act.
32. The Ld. Counsel for the Respondent has further submitted that, so far as the Intervention Application No. 4 / 2024, is concerned, that would not be tenable at the behest of the Appellant for the reason being that, the Appellant does not satisfy the conditions of the proviso to sub-section (4) of Section 230 of the Companies Act.
CA (AT) (CH) Nos. 46 & 47 / 2025 Page 16 of 24
33. The proviso to sub-section (4) of Section 230 of the Companies Act reads as under:
``(4) A notice under sub-section (3) shall provide that the persons to whom the notice is sent may vote in the meeting either themselves or through proxies or by postal ballot to the adoption of the compromise or arrangement within one month from the date of receipt of such notice:' Provided that any objection to the compromise or arrangement shall be made only by persons holding not less than ten per cent. of the shareholding or having outstanding debt amounting to not less than five per cent. of the total outstanding debt as per the latest audited financial statement.''
34. What is intended under the aforesaid provisions is that in a Scheme of Arrangement or a Compromise as principally contemplated under Section 230 of the Companies Act, a person who is holding a right of less than 10% of the shareholding or having outstanding debts amounting to less than 5% of the total outstanding debt, as per the latest audited Financial statement may not be a necessary person who is required to be impleaded in the proceedings of Amalgamation or Merger as contemplated under Section 230 of the Companies Act.
35. The Respondent have contended that, so far as the Intervention Application IA No. 4 / 2024 is concerned, since the Appellant did not satisfy the basic ingredients provided under the proviso to sub-section (4) of Section 230 of the Companies Act, that is, holding atleast 10% of the Shares of either of the Transferor or the Transferee Company, or having outstanding debts amounting to not less than CA (AT) (CH) Nos. 46 & 47 / 2025 Page 17 of 24 5% of the total outstanding debt, it will not be necessary party to the proceedings may not be necessary party to the proceedings.
36. They have further submitted that if the findings which had been recorded in the Impugned Order are taken into consideration, at no stage the Appellant had taken a stand that they have more than 10% of the Shareholding of either in the Transferor or the Transferee Company, nor have 5% of the total outstanding debts, so as to make them as a necessary party to be impleaded in the proceedings under Section 230 of the Companies Act and that merely the fact that there was a Status Quo Order, against certain parties who have interest in the Respondent companies will not make them the necessary party to the instant proceedings of amalgamation.
37. After having giving a thoughtful consideration to the argument extended by the Ld. Counsels, we are of the view that, the principal proceedings being the proceedings between the RAKIA (Judgment Creditor) vs. Nimmagadda Prasad/Iquest (Judgment Debtor), the consequential execution proceedings will take the shape of the decree, to be executed, for which an execution proceedings was filed before the Commercial Court, Hyderabad and for certain contraventions, a status quo order was obtained from Hon'ble High Court of Telangana, and therefore, the orders in these proceedings will only be binding inter se qua the parties to the proceedings and it will not bind a party who is not a party to the principal proceedings or to the proceedings of the contempt itself. Since admittedly, the Transferor and the Transferee, under the proceedings under Section CA (AT) (CH) Nos. 46 & 47 / 2025 Page 18 of 24 230 of the Companies Act are not a party to the proceedings before Ras-al- Khaimah Court, to the proceedings before Competition Commission of India, under Section 31 of the Competition Act and to the Execution Proceedings before Commercial Court, Hyderabad, any Status Quo Order passed in a contempt proceedings arising out of an order of Execution will not bind them.
38. The Appellant has argued, that the Order of Status Quo, as passed in the contempt proceedings would be an ``Order in Rem'' and any person who even gets a knowledge of it, would be bound by it.
39. This contention of the Appellant is not acceptable by this Tribunal, for the reason being that, the proceedings of the contempt were drawn under Section 10 of the Contempt Act by the Hon'ble High Court of Telangana, by drawing a contempt proceedings arising out of an order passed by the Court subordinate to it. If that be the situation, the interim order passed by the Hon'ble High Court of Telangana, while exercising its contempt powers under Section 10 of the Contempt of Courts Act, will only bind the parties who are the Judgment Debtors and it will not bind the party who is not a party to the proceedings either before the Hon'ble High Court or before the Court whose decree or order is sought to be executed.
40. By way of a repetition, we feel it apt to observe that knowledge of the contempt proceedings and orders passed in it, would only be limited to the extent which the Status Quo Order was made effective, which was in relation to the transactions in dispute, The transaction in dispute herein will always have a CA (AT) (CH) Nos. 46 & 47 / 2025 Page 19 of 24 relativity to the principal proceedings under Section 31 of Competition Act (Mudhra-Matrix-Tianish structure), and it will have no nexus with the proceedings which are drawn under Section 230 of the Companies Act of the Amalgamation (Tianish and Matrix), which has been carried by the Transferor and the Transferee Company in a proceedings independent to the proceedings under Section 31 of the Competition Act. Further, knowledge cannot be presumed to be with the Respondents, when they are not party to the proceedings and more particularly, when admittedly the Appellant had filed impleadment Applications, seeking to implead the Respondents herein (the Transferor and Transferee Company of the amalgamation proceedings under Section 230 of the Companies Act), in the contempt proceedings, and in the execution proceeding too and the said applications, though preferred much prior in time were still pending consideration as on the date of passing of the Impugned Order without an order having been rendered on them.
41. In these eventualities, when the Tribunal, fully conscious of the fact that, an impleadment application in the Contempt Proceedings in respect of `Matrix' and `Tianish', was pending consideration before the Honourable High Court, much prior to passing of the Impugned Order, did not pass any orders on the application for intervention separately and proceeded to pass the final order on both the Intervention Applications i.e. IA No. 4 / 2024 and the Amalgamation Petition CP (CAA) No. 34 / 230 / HDB / 2024, rejecting the Intervention Application and CA (AT) (CH) Nos. 46 & 47 / 2025 Page 20 of 24 approving the Scheme of Amalgamation, it will mean the Tribunal has quite consciously considered the necessity of the appellant to be impleaded as a party to the proceedings. Hence, no short comings can be attached to the order of approval of the Scheme, because of the non-disclosure of the fact of the Status Quo Order. Further, no mala fide motive can be attributed to the Transferor or the Transferee Company that they deliberately bring this fact to the knowledge of Ld. NCLT, especially when they were yet to be made as party to the proceedings.
42. In fact, the Ld. Tribunal in Para 2.7 to 2.11 of its Order passed in IA No. 04 / 2024 has recorded the fact of operation of the Interim Order of 19.07.2024 of Hon'ble High Court and the averment of the Appellant that the proposed merger is a premeditated step of the `transactions in dispute' and that applications have been filed to implead the Respondents herein in the said Contempt Petition. After considering the submission of both Appellant and the Respondents, it has concluded in Para 11 of its Order that the proposed merger will not result in any apparent breach of the Status Quo Order of 19.07.2024, because there will be no alienation of assets. Further, holding the view that in a Scheme of Amalgamation, third party intervention is not provided as per the provisions of Section 230 of Companies Act and that the Appellants herein do not establish themselves to be the necessary party, it has proceeded to dismiss the Intervention Application.
43. The Ld. Counsel for the Appellant before the Tribunal and even before this Appellate Tribunal has made reference to various Judgments, which he intends to CA (AT) (CH) Nos. 46 & 47 / 2025 Page 21 of 24 rely upon to support his contention as to why they would be the necessary party to the proceedings, and would be needed to be impleaded in the proceedings, the Ld. Counsel for the Respondent has sought to distinguish the cited Judgments, stating that facts and circumstances in those cited cases will be altogether from the instant case under consideration.
44. The Ld. Counsel for the Respondent, referring to Para 59 & 60 of the Judgment reported in 2011 SCC Online Mad 611, Essar Telecommunications Pvt. Ltd., has submitted that the proceedings in the matters of Essar Telecommunications Pvt. Ltd., clearly lays down that objection can only be raised with respect to the legality of the Scheme or being in violation of law in the light of the observations made in Para 59 to 61 which is extracted hereunder:
``59. By way of the scheme of amalgamation, by merger, the liabilities are taken over by the transferee company, therefore it cannot be said that a right of party would be affected. The only objection which may raised by any person in response to notice can be with respect to the legality of the scheme or it being in violation of any law.
60. In the absence of violation of substantial law, merely because certain rights of third party are going to be affected, cannot be a ground to permit third party to file objection to the scheme, once the scheme is as per statutory provisions of sections 391 to 394 of the Companies Act and approved by majority.
61. In case the provisions of section 391 are interpreted as suggested by learned senior counsel for the petitioner, it will go against the very object of section 391, which makes a compromise or arrangement if approved to be binding even against unwilling member or creditor. Section 391 is a complete code by itself. Once a scheme of compromise and arrangement squarely falls within the four corners of the section, it can be sanctioned.'' CA (AT) (CH) Nos. 46 & 47 / 2025 Page 22 of 24
45. The Ld. Tribunal has rightly observed, that in the light of the provisions contained under the proviso to sub-section (4) of Section 230 and also since no substantial violation of law was involved, there was no locus standi for the Appellant to file an Application for Intervention, because, they were not satisfying the ingredients which are contemplated, which was mandatory under law as provided under Section 230 of the Companies Act and hence, they do not become a necessary party to the proceedings requiring to be impleaded in the proceedings.
46. The Ld. Counsel for the Appellant has very heavily relied upon the observation made in Para 10 of the Impugned Order which is extracted hereunder:
``10. Thus, it is clear from the contentions put forth by the Learned Sr. Counsel for the Intervention Petitioner that Scheme of Amalgamation is initiated by suppressing the information relating to ongoing legal proceedings and Court orders and in order to circumvent the status quo order granted by the Hon'ble High Court of Telangana.''
47. In fact if the entire contents of the said paragraph is taken into consideration, it is only the recording of the pleading of the Appellant relating to the suppression of fact and information. This has been quite elaborately dealt by us in preceding paragraphs, that, non-disclosure of a Status Quo Order in a proceedings, where a Transferor or Transferee, are not a party will not amount to be a suppression of a material fact and that too, when the suppression of the fact has no gravamen effect, as it has been contemplated either under Section 391 of the Companies Act, 1956 or even under Section 230 (2) (a) of the Companies Act, which casts on the parties CA (AT) (CH) Nos. 46 & 47 / 2025 Page 23 of 24 to the amalgamation proceedings, the responsibility of disclosure of material fact which was limited to the investigation of proceedings. More importantly, so far as the Intervention Application is concerned, since the Appellant had failed to establish that amalgamation would be having bearing on their rights and since they are not falling within the domain of the proviso to sub-section (4) of Section 230, the Intervention Application has been rightly rejected, which does not call for any interference by this Tribunal.
48. Since, we have already held that the Appellant is not at all a necessary party to the proceedings under Section 230 of the Company Act or to the Company Petition i.e. CP (CAA) No.34/230/HDB/2024, the principal challenge given to the Order of Amalgamation / Merger as passed on 10.03.2025 / 25.03.2025, which is the subject matter of Company Appeal (AT) (CH) No. 46 / 2025, stands answered in the light of the observations already made in the above paragraphs.
49. Subject to the aforesaid exception, the instant Company Appeal (AT) (CH) No. 46 / 2025 and Company Appeal (AT) (CH) No. 47 / 2025, lack merit and the same are dismissed.
[Justice Sharad Kumar Sharma] Member (Judicial) [Jatindranath Swain] Member (Technical) 06/08/2025 SR/MS/RS CA (AT) (CH) Nos. 46 & 47 / 2025 Page 24 of 24