State Bank Of India vs Videocon Industries Ltd & Ors on 4 July, 2019
80. Henceforward Summumbonum, is that the UK / USA
courts have dealt with the process of consolidation along with
the jurisdiction of the Authority by pronouncing that equity
and fairness ought to be a yardstick by lifting the corporate
veil. Consolidation is to be utilized as a mechanism to
maximise the value of financially stressed group of
companies. Economic benefit ought to be the sole BEFORE
THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH
MA 1306/2018, MA 1416/2018, MA 393/2019, MA
115/2019, MA 1574/2019, MA 774 /2019, MA 778/2019,
MA 1583/2018 Page 45 of 52 purpose and for that a
preliminary searching enquiry is suggested which would yield
benefit to stakeholders by off-setting any harm, if inflicted, if
not consolidated. On due reading of all these judgements,
one proposition of law emerges that the motion of
„consolidation‟ depends upon the facts and circumstances of
each debtor/debtors. It is appropriate and suitable to give a
ruling at this occasion that there is no single yardstick or
measurement on the basis of which a motion of consolidation
can or cannot be approved. With humility, this Bench herein
below sets-out a list of examples, based upon reading the
Company Appeal (AT) (Ins) No. 1069 of 2020
Page 27 of 38
history of „group insolvency‟, so that the presence of them can
lead to a decisive conclusion of triggering of „consolidation‟ of
Insolvency process. Undisputedly, and also laid down by the
courts, before ordering consolidation, a preliminary searching
inquiry be ensured that whether consolidation yields benefits
to stakeholders by offsetting the harm if not consolidated.