The recent decision by the appellate tribunal NCLAT to sanction the merger between Indiabulls Real Estate and Embassy Group comes as a major relief to the real estate firms. This decision overturns the previous order by the NCLT, which had stalled the merger process for the past 18 months.
The merger between Indiabulls Real Estate, Embassy One, and NAM Estates aims to create a Pan-India real estate company by combining their operations in North and South India. Despite facing objections from the Income Tax Department over valuation and swap ratio, the appellate tribunal found that the valuation was done using standard methods and approved by experts. Additionally, the transferee company, now known as Equinox India Developments, has undertaken to bear any tax liabilities.
The NCLAT emphasized that the NCLT should not have interfered in the valuation process, as it had been approved by shareholders, creditors, and regulatory bodies such as the Competition Commission of India. The tribunal also noted that all compliance requirements had been met and dismissed the appeal filed by an objector of the scheme.
Overall, the NCLAT’s decision to green-light the merger between Indiabulls Real Estate and Embassy Group is a significant development in the real estate sector. It shows that the commercial wisdom of shareholders, creditors, and boards of directors should be respected in such matters, and that regulatory processes should be followed diligently to ensure a smooth merger process.
