MOONS TECHNOLOGIES LTD. (FORMERLY KNOWN AS FINANCIAL TECHNOLOGIES INDIA LTD.) & ORS. versus UNION OF INDIA

MOONS TECHNOLOGIES LTD. (FORMERLY KNOWN AS FINANCIAL TECHNOLOGIES INDIA LTD.) & ORS. versus UNION OF INDIA

The amalgamation order dated 12.02.2016, passed under Section 396, was ultra vires the Companies Act, 1956 and violative of Article 14, because the essentiality test and required compensation assessment under Section 396(3) were not fulfilled, rendering the order arbitrary and unreasonable.

Parties
Appellant: 63 Moons Technologies Ltd. (formerly known as Financial Technologies India Ltd.) & Ors.; Respondent: Union of India
Jurisdiction
India
Judgment Date
30 April 2019
Procedural Posture
Civil Appeal / Final Appeal Before Supreme Court
Outcome
Appeal allowed; impugned judgment of Bombay High Court set aside.
Legal Topics
Compulsory Amalgamation, Administrative Orders, Compensation to Shareholders and Creditors, Natural Justice
Company Law Constitutional Law Compulsory Amalgamation Administrative Orders Compensation to Shareholders and Creditors Natural Justice

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Parties

63 Moons Technologies Ltd. (formerly known as Financial Technologies India Ltd.) & Ors.

Appellant

Union of India

Respondent

Procedural Posture

Civil Appeal / Final Appeal Before Supreme Court

Legal Issues

  1. 1 Constitutionality of Section 396, Companies Act, 1956
  2. 2 Derivative immunity of Central Government order under Article 31A
  3. 3 Nature of government order under Section 396—administrative or legislative

Ratio Decidendi

The amalgamation order dated 12.02.2016, passed under Section 396, was ultra vires the Companies Act, 1956 and violative of Article 14, because the essentiality test and required compensation assessment under Section 396(3) were not fulfilled, rendering the order arbitrary and unreasonable.

Court Disposition

Appeal allowed; impugned judgment of Bombay High Court set aside.

Orders

  • The amalgamation order dated 12.02.2016 is quashed as ultra vires Section 396 of the Companies Act and violative of Article 14.
  • Writ petition disposed in light of Supreme Court judgment.