In Brief
The Supreme Court set aside a compulsory amalgamation order merging 63 Moons Technologies Ltd. (FTIL) with its subsidiary National Spot Exchange Ltd. (NSEL) under Section 396 of the Companies Act, 1956. FTIL was a profitable, cash-rich software company; NSEL was a collapsed commodity exchange with a INR 5,600 crore default crisis. The Court held the amalgamation ultra vires because: (1) the 'emergency situation' justifying the order in 2013-2014 had substantially improved by 2016; (2) private interest of duped investors, not public interest, motivated it; (3) crucial grounds were not in the draft order limiting stakeholder input; and (4) compensation assessment for FTIL shareholders' economic loss was entirely ignored, violating statutory requirements.
The lawyer headnote and full judgment text are available to registered users.