NCLAT upholds insolvency order for Future Ideas Company Limited
National Company Law Appellate Tribunal (
NCLAT
) on Monday upheld NCLT's order admitting
Future Ideas Company Limited
(FICL), part of the Future Group, into insolvency over
dues
of ₹122.83 crore.
National Company Law Tribunal (NCLT), Mumbai, admitted FICL into insolvency last month in an insolvency petition filed by
Axis Trustee Services
, representing Franklin Templeton Asset Management (India) Pvt Ltd as its debenture trustee.
A debenture trustee is a body representing the interests of debenture holders while holding debentures for them.
The debt arose from non-convertible debentures issued by FICL in 2018, according to terms agreed under Debenture Trust-cum-Mortgage Deed (DTMD).
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Time of India
11 hours ago
- Time of India
Speed of doing business for ease of doing business: Streamlining India's corporate restructuring
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of .) Corporate restructuring is the process of reorganising a company's structure, operations, or ownership through mergers, acquisitions, demergers, or other arrangements, to improve efficiency, unlock value, or respond to changing market a vital mechanism for a dynamic market in India, listed companies alone have a market capitalisation of over USD 5.13 trillion, and corporation tax alone had a GDP contribution of a little over 3% in the last financial year. With such high stakes, streamlining the corporate restructuring process is essential. A smooth, efficient restructuring regime means companies can adapt quickly, investors gain confidence, and the overall business climate remains long ago, corporate restructurings in India used to be court-driven and extremely drawn-out processes. The Companies Act 2013 sought to modernise this by shifting jurisdiction from High Courts to a specialised tribunal. Thus, the National Company Law Tribunal (NCLT) was empowered to approve or reject schemes of arrangement, mergers, demergers, and other corporate restructuring plans for both listed and unlisted practice, while NCLT did bring some improvement over the High Courts, the gains have been limited. Over time, NCLT's workload expanded dramatically beyond just Companies Act schemes. Notably, with the advent of the Insolvency and Bankruptcy Code, 2016, NCLT became thein India. The tribunal that was meant to fast-track restructuring approvals found itself swamped with thousands of bankruptcy cases, in addition to other company law matters. The transfer of jurisdiction achieved one goal, moving matters out of the general courts, but it also inadvertently concentrated a vast array of complex proceedings (from mergers to insolvency to shareholder disputes) in a single institution, leading to bottlenecks in the restructuring approval process once data on NCLT case pendency and throughput underscore the severity of the challenge. As of March 2025, over 15,000 cases were pending before the NCLT. This congestion directly translates into delays. On average, companies must wait 9 to 12 months or more from the time of filing a scheme of arrangement to finally get NCLT approval. It is not uncommon for straightforward mergers, even those approved by all shareholders and regulators, to languish for several months awaiting a tribunal hearing and order. Such delays impose significant costs: business plans are put on hold pending legal sanctions, synergies from mergers are deferred, and uncertainty looms over employees and investors.A key reason for the delay is theof NCLT's. Under the IBC, resolution proceedings are time-bound (330 days outer limit, though often extended) and tend to dominate tribunal schedules due to their urgency and the stakes involved. As a result, merger/demerger applications (which have) oftenAnother issue is that the NCLT process suffers from the delicacy of efforts. For listed companies, before approaching NCLT, a scheme must be vetted by SEBI (via stock exchanges) for compliance with securities laws and minority shareholder protection. After SEBI and shareholders' approval, the matter goes to NCLT, which primarily checks whether due process was followed. In effect, NCLT's role in many merger cases is largely supervisory, ensuring legal compliance, rather than. This raises the question: Is the extra layer of NCLT approval always necessary, especially in casesA favourable jurisprudence is ideally one that minimises judicial intervention in routine business matters. In this regard, India can draw valuable lessons from global models that have struck a more efficient regulatory balance. The United States, for instance, adopts a market-led, regulatory-overseen model where corporate mergers typically do not require court approval unless a dispute arises. Regulatory bodies like the SEC and the antitrust authority step in only for specific oversight, and even those processes are governed by well-defined, time-bound frameworks. This clarity and predictability reduce legal uncertainty and allow corporate transactions to close swiftly, often in under three months. A similar principle underlies Singapore's restructuring framework, where administrative merger routes are standard and courts play a role only when necessary. 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In fact, to make fast-track mergers more effective, the government amended the rules in 2023 to enforce strict timelines: the RD must ordinarily confirm within 45 days (if no objections) or 60 days (if minor objections) of receiving the scheme, failing which the scheme is deemed the government can create a 'Corporate Restructuring Authority', akin to SEBI, for approving schemes of arrangement of unlisted companies. Such an authority would operate under the MCA and specialise in corporate restructurings of privately held companies with a mandated timeline crossing which the proposal shall be considered passed per defaltam. NCLT shall only be resorted to in cases where the proposed authority finds something amiss. Such a dedicated body would bring several advantages: it would build expertise in restructuring, corporate valuation, accounting, and legal compliance for merger schemes, leading to more consistent and informed decisions; it would be more accessible; and it could maintain faster turnaround times. In essence, unlisted companies would get a regulator dedicated to their restructuring needs, ensuring they are not left behind in the push for listed companies, a compelling case can be made that the final approval of merger/demerger schemes should be handled by the SEBI, without requiring NCLT intervention. SEBI is already deeply involved in the process. As the capital markets regulator, it reviews and comments on every scheme of arrangement involving a listed firm. No listed company merger or demerger can even be filed at NCLT without prior SEBI approval and a compliance certificate from the stock exchange. In other words, SEBI serves as a first-line gatekeeper. SEBI has the expertise and mandate to protect investors, which is the core concern in listed-company restructurings. The NCLT's authority in such cases is primarily to act as a watchdog, ensuring the procedure was fair, minority shareholders and creditors were not short-changed, and all legal formalities are in order. Thus, by the time a scheme has passed through SEBI and shareholder approvals, the role left for NCLT is quite limited and arguably adds redundant delay.A useful precedent exists in India's banking sector. Bank mergers do not go to NCLT at all. They are governed by a separate mechanism under the Banking Regulation Act, wherein the final authority to sanction the merger lies with the RBI, not a court or tribunal. This framework has worked well to facilitate faster consolidation in the banking industry, a testament to the efficacy of this could play an analogous role for listed non-bank companies, where it could act as a nodal authority, cutting out several months of waiting and procedural hearings, leading to shorter timelines for deal closure, reduced legal uncertainty, and one less layer of regulatory cost for listed-company schemes entirely to SEBI, expanding fast-track merger eligibility, and creating a dedicated Corporate Restructuring Authority under the Ministry of Corporate Affairs for unlisted firms would not only cut down on procedural bottlenecks but also align India's business landscape with the regulatory agility of leading economies. This must be a timely reform to power the
Economic Times
11 hours ago
- Economic Times
Speed of doing business for ease of doing business: Streamlining India's corporate restructuring
Corporate restructuring is the process of reorganising a company's structure, operations, or ownership through mergers, acquisitions, demergers, or other arrangements, to improve efficiency, unlock value, or respond to changing market conditions. ADVERTISEMENT Being a vital mechanism for a dynamic market in India, listed companies alone have a market capitalisation of over USD 5.13 trillion, and corporation tax alone had a GDP contribution of a little over 3% in the last financial year. With such high stakes, streamlining the corporate restructuring process is essential. A smooth, efficient restructuring regime means companies can adapt quickly, investors gain confidence, and the overall business climate remains robust. Not long ago, corporate restructurings in India used to be court-driven and extremely drawn-out processes. The Companies Act 2013 sought to modernise this by shifting jurisdiction from High Courts to a specialised tribunal. Thus, the National Company Law Tribunal (NCLT) was empowered to approve or reject schemes of arrangement, mergers, demergers, and other corporate restructuring plans for both listed and unlisted companies. In practice, while NCLT did bring some improvement over the High Courts, the gains have been limited. Over time, NCLT's workload expanded dramatically beyond just Companies Act schemes. Notably, with the advent of the Insolvency and Bankruptcy Code, 2016, NCLT became the default forum for insolvency resolution in India. The tribunal that was meant to fast-track restructuring approvals found itself swamped with thousands of bankruptcy cases, in addition to other company law matters. The transfer of jurisdiction achieved one goal, moving matters out of the general courts, but it also inadvertently concentrated a vast array of complex proceedings (from mergers to insolvency to shareholder disputes) in a single institution, leading to bottlenecks in the restructuring approval process once data on NCLT case pendency and throughput underscore the severity of the challenge. As of March 2025, over 15,000 cases were pending before the NCLT. This congestion directly translates into delays. On average, companies must wait 9 to 12 months or more from the time of filing a scheme of arrangement to finally get NCLT approval. It is not uncommon for straightforward mergers, even those approved by all shareholders and regulators, to languish for several months awaiting a tribunal hearing and order. Such delays impose significant costs: business plans are put on hold pending legal sanctions, synergies from mergers are deferred, and uncertainty looms over employees and investors. A key reason for the delay is the overlap of NCLT's restructuring function with its insolvency function. Under the IBC, resolution proceedings are time-bound (330 days outer limit, though often extended) and tend to dominate tribunal schedules due to their urgency and the stakes involved. As a result, merger/demerger applications (which have no statutory deadline) often take a backseat. ADVERTISEMENT Another issue is that the NCLT process suffers from the delicacy of efforts. For listed companies, before approaching NCLT, a scheme must be vetted by SEBI (via stock exchanges) for compliance with securities laws and minority shareholder protection. After SEBI and shareholders' approval, the matter goes to NCLT, which primarily checks whether due process was followed. In effect, NCLT's role in many merger cases is largely supervisory, ensuring legal compliance, rather than evaluating the business merits of the deal. This raises the question: Is the extra layer of NCLT approval always necessary, especially in cases where regulators and stakeholders are already on board? A favourable jurisprudence is ideally one that minimises judicial intervention in routine business matters. In this regard, India can draw valuable lessons from global models that have struck a more efficient regulatory balance. The United States, for instance, adopts a market-led, regulatory-overseen model where corporate mergers typically do not require court approval unless a dispute arises. Regulatory bodies like the SEC and the antitrust authority step in only for specific oversight, and even those processes are governed by well-defined, time-bound frameworks. This clarity and predictability reduce legal uncertainty and allow corporate transactions to close swiftly, often in under three months. A similar principle underlies Singapore's restructuring framework, where administrative merger routes are standard and courts play a role only when necessary. A step ahead of USA in terms of regulatory feasibility, Singapore's Companies Act permits court-free statutory amalgamations, where two companies can merge simply by gaining shareholder approval and notifying the regulator (ACRA), thereby further reducing the role of state (let alone judiciary) in what essentially is supposed to be a market driven practice. The United Arab Emirates also conducts corporate mergers under its Commercial Companies Law, following an administrative process, requiring no court approval unless objections arise from creditors or significant minority shareholders. Even then, the objection period is capped at 30 days, after which the merger proceeds by default. The UAE has further institutionalised time-bound regulatory review: its Competition Committee, empowered under the 2023 Competition Law, must assess large merger notifications within 90 days. Globally, trust is placed in regulatory frameworks and judicial intervention, reserved for exceptions, is not the norm. By emulating global best practices, India has the opportunity to reimagine its corporate restructuring ecosystem. ADVERTISEMENT Encouragingly, the Indian government signalled in the latest budget that it similarly intends to extend and simplify such speedy merger processes for a broader set of companies. In the Union Budget speech in February 2025, the Finance Minister announced that ' requirements and procedures for speedy approval of company mergers will be rationalised. The scope for fast-track mergers will also be widened and the process made simpler. ' The government has shown intent, and thus, a timely policy recommendation is stated objectives of efficiency and regulatory comity with globally aligned standards can be achieved in two ways. ADVERTISEMENT For unlisted entities, a potential path to fast-track restructuring is to expand the mandate for the Regional Directors (RDs) of the Ministry of Corporate Affairs (MCA), who already oversee certain corporate approvals. India's legal framework already contains a germ of this idea in the form of 'Fast Track Mergers.' The Companies Act, 2013, provides a simplified route for certain small mergers (e.g. between a holding company and its wholly-owned subsidiary, or between two small companies) where NCLT approval is not required. This fast-track mechanism is narrow in scope, applicable only to small firms or intra-group restructurings. However, it demonstrates the viability of bypassing the tribunal when matters are straightforward or low risk. In fact, to make fast-track mergers more effective, the government amended the rules in 2023 to enforce strict timelines: the RD must ordinarily confirm within 45 days (if no objections) or 60 days (if minor objections) of receiving the scheme, failing which the scheme is deemed approved. Alternately, the government can create a 'Corporate Restructuring Authority', akin to SEBI, for approving schemes of arrangement of unlisted companies. Such an authority would operate under the MCA and specialise in corporate restructurings of privately held companies with a mandated timeline crossing which the proposal shall be considered passed per defaltam . NCLT shall only be resorted to in cases where the proposed authority finds something amiss. Such a dedicated body would bring several advantages: it would build expertise in restructuring, corporate valuation, accounting, and legal compliance for merger schemes, leading to more consistent and informed decisions; it would be more accessible; and it could maintain faster turnaround times. In essence, unlisted companies would get a regulator dedicated to their restructuring needs, ensuring they are not left behind in the push for efficiency. ADVERTISEMENT For listed companies, a compelling case can be made that the final approval of merger/demerger schemes should be handled by the SEBI, without requiring NCLT intervention. SEBI is already deeply involved in the process. As the capital markets regulator, it reviews and comments on every scheme of arrangement involving a listed firm. No listed company merger or demerger can even be filed at NCLT without prior SEBI approval and a compliance certificate from the stock exchange. In other words, SEBI serves as a first-line gatekeeper. SEBI has the expertise and mandate to protect investors, which is the core concern in listed-company restructurings. The NCLT's authority in such cases is primarily to act as a watchdog, ensuring the procedure was fair, minority shareholders and creditors were not short-changed, and all legal formalities are in order. Thus, by the time a scheme has passed through SEBI and shareholder approvals, the role left for NCLT is quite limited and arguably adds redundant delay.A useful precedent exists in India's banking sector. Bank mergers do not go to NCLT at all. They are governed by a separate mechanism under the Banking Regulation Act, wherein the final authority to sanction the merger lies with the RBI, not a court or tribunal. This framework has worked well to facilitate faster consolidation in the banking industry, a testament to the efficacy of this could play an analogous role for listed non-bank companies, where it could act as a nodal authority, cutting out several months of waiting and procedural hearings, leading to shorter timelines for deal closure, reduced legal uncertainty, and one less layer of regulatory cost for companies. Delegating listed-company schemes entirely to SEBI, expanding fast-track merger eligibility, and creating a dedicated Corporate Restructuring Authority under the Ministry of Corporate Affairs for unlisted firms would not only cut down on procedural bottlenecks but also align India's business landscape with the regulatory agility of leading economies. This must be a timely reform to power the next phase of India's growth story.
Time of India
2 days ago
- Time of India
SpiceJet shares in focus after NCLT asks lessors to submit valid power of attorney
SpiceJet shares will be in focus on Friday after the National Company Law Tribunal (NCLT) directed three aircraft lessors of the airline to submit a valid Power of Attorney by July 3. The directive came during a hearing on insolvency petitions filed by AWAS 36698 Ireland, AWAS 36694 Ireland, and AWAS 36695 Ireland. The three lessors are seeking insolvency proceedings against SpiceJet over alleged defaults totalling Rs 77 crore in April 2024. During the June 2 hearing, SpiceJet's legal counsel pointed out that the Power of Attorney presented by the petitioners was only valid until February 11, 2025. The airline argued that no updated or currently valid authorisation had been submitted since. 'In order to continue the proceeding by the person who has initiated this petition, there must be a valid Power of Attorney existing at the present point of time,' the NCLT noted in its order. In response, the lessors' counsel requested time to submit updated documents. The tribunal accepted the request and scheduled the next hearing for July 3. Also Read: From Zoho's Radha Vembu to Nykaa's Falguni Nayar: India's top 10 first-gen women wealth creators in 2025 SpiceJet, in operation for 19 years, is facing multiple financial and legal challenges. The airline has been the subject of several insolvency petitions filed by creditors, including Willis Lease, Aircastle Ireland, Wilmington, and Celestial Aviation, across both the NCLT and the appellate tribunal NCLAT. Also Read: Ola Electric, Kalyan Jewellers among 10 firms where promoters pledge increased in Q4 SpiceJet shares closed at Rs 42.29 in the previous session, down 0.9% on the BSE, while the benchmark Sensex rose 0.55%. The stock is down 25% year-to-date and 31% over the past six months. The company's market capitalisation stands at Rs 5,421 crore. Also Read: India's top 10 priciest stocks in 2025: MRF to Elcid, see who tops the list ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
