NCLT Allahabad Bench Sanctions Composite Scheme of Arrangement Among Triveni Engineering, Sir Shadi Lal Enterprises, and Triveni Power Transmission

The National Company Law Tribunal (NCLT), Allahabad Bench, Prayagraj, pronounced its order on May 7, 2026, sanctioning the Composite Scheme of Arrangement involving three companies. Triveni Engineering & Industries Limited received the certified copy of this order on May 14, 2026. The joint company petition was originally filed on December 13, 2025, under Sections 230 and 232 of the Companies Act, 2013, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

Structure of the Composite Scheme

The sanctioned scheme encompasses two simultaneous corporate actions involving the three applicant companies, as detailed below:

Parameter: Details Amalgamating Company: Sir Shadi Lal Enterprises Limited (Applicant Company No. 2) Amalgamated Company: Triveni Engineering and Industries Limited (Applicant Company No. 1) Resulting Company: Triveni Power Transmission Limited (Applicant Company No. 3) Demerged Undertaking: PTB Undertaking (gears and defence business segments) Amalgamation Appointed Date: April 1, 2025 Demerger Appointed Date: April 1, 2026 Order Pronounced On: May 7, 2026 Certified Copy Received On: May 14, 2026

Shareholder and Creditor Approvals

Prior to the second motion hearing, separate meetings of equity shareholders, secured creditors, and unsecured creditors of Applicant Company No. 1 and Applicant Company No. 2 were convened and held through video conferencing, as directed by the Tribunal vide its order dated October 17, 2025. The scheme was duly approved at these meetings. The key voting outcomes are summarised below:

Applicant Company No. 1 (Triveni Engineering and Industries Limited) — Meeting Date: December 7, 2025

Particulars: Number of Persons No. of Shares / Value of Debt Equity Shareholders: 1,04,953 21,88,97,968 Secured Creditors: 6 718,56,41,296 Unsecured Creditors: 4,225 547,60,70,963.30

Applicant Company No. 2 (Sir Shadi Lal Enterprises Limited) — Meeting Date: November 30, 2025

Particulars: Number of Persons No. of Shares / Value of Debt Equity Shareholders: 6,313 52,50,000 Secured Creditors: 2 186,98,75,955.77 Unsecured Creditors: 603 281,15,32,728.99

Applicant Company No. 3 (Triveni Power Transmission Limited) had no secured or unsecured creditors, and consent affidavits of its equity shareholders were obtained to dispense with the requirement of convening a separate meeting.

Share Entitlement Ratios

Upon the scheme becoming effective, equity shares are to be issued by the respective companies to eligible shareholders in accordance with the following ratios as provided in the scheme:

Amalgamation (Sir Shadi Lal Enterprises into Triveni Engineering): For every 137 (One Hundred and Thirty-Seven) equity shares of the Amalgamating Company of face value of INR 10 each held in the Amalgamating Company, every equity shareholder of the Amalgamating Company shall be entitled to receive 100 (One Hundred) equity shares of face value of INR 1 each of the Amalgamated Company, credited as fully paid.

Demerger (PTB Undertaking into Triveni Power Transmission): For every 3 (three) equity shares of the Demerged Company of face value of INR 1 each held in the Demerged Company, every equity shareholder of the Demerged Company shall be entitled to receive 1 (One) equity share of face value of INR 2 each of the Resulting Company, credited as fully paid up on the same terms and conditions of issue as prevalent in the Demerged Company.

Statutory Compliance and Tax Matters

The NCLT reviewed reports submitted by the Registrar of Companies (Uttar Pradesh, Kanpur), the Regional Director (Northern Region, Ministry of Corporate Affairs, New Delhi), the Official Liquidator (Ministry of Corporate Affairs, Allahabad), and the Income Tax Department before sanctioning the scheme. The Official Liquidator, in its report dated February 3, 2026, raised no objection, stating that the affairs of the Amalgamating Company did not appear to have been conducted in a manner prejudicial to the interest of its members or to public interest.

With respect to income tax matters, the Income Tax Department's reports dated February 24, 2026 (for Applicant Companies 1 and 3) and February 22, 2026 (for Applicant Company 2) confirmed no assessment proceedings were pending for Applicant Companies 1 and 3, and no assessment proceedings were pending for Applicant Company 3/Resulting Company. Certain demands and pending appeals were noted for Applicant Company No. 1, including a demand of Rs. 1,66,281/- for A.Y. 2016-17 and a demand of Rs. 2,42,68,848/- for A.Y. 2020-21. The applicant submitted that the demand of Rs. 1,66,282 was deposited on March 16, 2026 vide Challan No. 01836, subject to the outcome of the appeal. Applicant Company No. 1 also stated that a refund of more than Rs. 800 lakhs is pending for A.Y. 2010-11.

The NCLT clarified that the order does not grant any exemption from payment of stamp duty, taxes (including Income Tax, GST, or any other applicable charges), or any other compliance required under applicable law. The Transferee Company is also required to comply with the provisions of Section 170A of the Income Tax Act, 1961 (now Section 314(1) of the new Income Tax Act, 2025) for filing of modified tax returns, if any are required.

Key Directions Issued by the Tribunal

Upon the scheme becoming effective, Sir Shadi Lal Enterprises Limited (Amalgamating Company) shall stand dissolved without winding up.

All debts, liabilities, loans, duties, and obligations of Applicant Company No. 2 shall stand transferred to Applicant Company No. 1 without any further act or deed.

All employees of Applicant Company No. 2 in service on the Effective Date shall become employees of Applicant Company No. 1 without interruption in service and on terms and conditions not less favourable than those previously applicable.

All pending suits, claims, actions, and legal proceedings by or against Applicant Company No. 2 shall be continued, prosecuted, and enforced by or against Applicant Company No. 1.

The authorised share capital of Applicant Company No. 2 shall stand combined with the authorised share capital of Applicant Company No. 1 upon the scheme becoming effective.

All tax liabilities and pending appeals and proceedings under the Income Tax Act pending against the Amalgamating Company are transferred to the Amalgamated Company and shall be enforced and continued against the Amalgamated Company.

The Applicant Companies No. 1, 2, and 3 are required to deliver a certified copy of the order to the Registrar of Companies, Kanpur, for registration within thirty days of receipt of the order.

The present Company Petition bearing CP (CAA) No. 37/ALD of 2025 stands allowed and disposed of.

Sir Shadi Lal Enterprises Limited has received a penalty order from the Income Tax Department imposing a penalty of Rs 1.73 crore under section 271(1)(c) of the Income Tax Act, 1961. The company disclosed this development to the stock exchanges on March 30, 2026, in compliance with SEBI listing regulations.

Penalty Details and Background

The penalty pertains to Assessment Year 2015-16 and stems from alleged inaccurate particulars of income furnished by the company. The Income Tax Department imposed the penalty at 100% of the tax sought to be evaded, which amounts to Rs 1.73 crore.

Parameter Details Penalty Amount Rs 1.73 crore Assessment Year 2015-16 Legal Provision Section 271(1)(c) of Income Tax Act, 1961 Order Date March 28, 2026 Receipt Date March 30, 2026

Nature of Violation

The penalty relates to an addition of Rs 5.59 crores made by the tax authorities, with Rs 5.50 crores attributed to alleged non-consideration of sale amount in computing long-term capital gains. The violation involves the computation of capital gains from a slump sale transaction of the company's sugar unit.

Assessment and Appeal History

The company originally filed its return for Assessment Year 2015-16 declaring a loss of Rs 44.00 crores. During scrutiny assessment, the Income Tax Department made additions totaling Rs 27.10 crores, resulting in a revised assessed loss of Rs 16.81 crores. The company subsequently appealed the assessment order through various appellate forums.

Stage Outcome Original Return Loss of Rs 44.00 crores Assessment Order Additions of Rs 27.10 crores CIT(A) Appeal Dismissed ITAT Appeal Partly allowed on July 16, 2025

ITAT Relief and Current Position

The Income Tax Appellate Tribunal (ITAT) partly allowed the company's appeal on July 16, 2025, providing some relief on the capital gains computation. However, the penalty proceedings continued based on the remaining addition of Rs 5.59 crores after considering the ITAT relief.

Company's Response

Sir Shadi Lal Enterprises Limited has indicated that it will contest the penalty order in appeal. The company expressed confidence in obtaining full relief through cancellation of the imposed penalty. The tax demand of Rs 1.74 crores will be contested through the appellate process.

Financial Impact

The company has disclosed that while a tax demand of Rs 1.74 crores has been raised, it will contest this demand in appeal. The company remains hopeful of obtaining complete relief and cancellation of the penalty through the appellate proceedings.

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