Bombay High Court: Stamp Duty On NCLT Orders Sanctioning Composite Schemes Of Amalgamation

The Bombay High Court vide its judgment in Schaeffler India Limited v. Chief Controlling Revenue Authority, Pune, Maharashtra ("Maharashtra Revenue Authority") (W.P. No. 7496 of 2023 decided on February 18, 2026) dealt with the question of levy of stamp duty on orders of the National Company Law Tribunal ("NCLT") sanctioning composite schemes of amalgamation involving multiple transferor companies. This issue arose from a writ petition filed before the Bombay High Court against the order of Maharashtra Revenue Authority.

1. BRIEF FACTS:

Schaeffler India Limited ("Schaeffler") filed a composite scheme of amalgamation of INA Bearings India Private Limited ("INA Bearing") and LuK India Private Limited ("LuK India") with Schaeffler under Sections 230 to 232 of the Companies Act, 2013. The scheme proposed the transfer of the entire business undertakings of LuK India and INA Bearing to Schaeffler. Since LuK India was situated in Hosur, Tamil Nadu, a petition was filed before the NCLT, Chennai Bench ("NCLT Chennai"). As INA Bearing and Schaeffler were located in Maharashtra, a corresponding petition was filed before the NCLT, Mumbai Bench ("NCLT Mumbai").

Following the sanction of the scheme by both NCLT Mumbai and NCLT Chennai, Schaeffler submitted the order of NCLT Mumbai dated October 8, 2018 ("NCLT Mumbai Order") sanctioning the scheme, for adjudication of stamp duty. The stamp authority directed the payment of stamp duty amounting to INR 50,00,00,000 (Indian Rupees fifty crore). The authority held that the scheme constituted two separate transactions namely, (i) the amalgamation of INA Bearing with Schaeffler; and (ii) the amalgamation of LuK India with Schaeffler, and that stamp duty was therefore payable separately in respect of each transaction. In arriving at this determination, reliance was placed on the stamp duty notification dated May 6, 2002, which capped the maximum stamp duty payable at INR 25,00,00,000 (Indian Rupees twenty-five crore). Accordingly, considering the instrument as comprising two distinct transactions, the stamp duty was adjudicated at INR 50,00,00,000 (Indian Rupees fifty crore).

2. CORE ISSUE:

The principal issue before the Bombay High Court was whether Section 5 of the Maharashtra Stamp Act, 1958 ("Stamp Act") could be applied to treat the NCLT Mumbai Order sanctioning a composite amalgamation scheme as comprising separate transactions for stamp-duty purposes. Section 5 of the Stamp Act provides that any instrument comprising distinct transactions will be chargeable with aggregate amount of stamp duty that would be payable if each such transaction were effected by a separate instrument.

3. DECISION:

i. Applicability of Section 5 of the Stamp Act to composite schemes:

The Bombay High Court observed that Section 5 of the Stamp Act applies in situations where a single instrument relates to several distinct matters or transactions that cannot be blended into one or regarded as merely parts of a single aggregate transaction. Further, it was noted that the application of Section 5 would require an examination of the underlying transactions, which cannot be done in respect of an order sanctioning a scheme of amalgamation.

The Bombay High Court agreed with the decision of the Gujarat High Court in Ambuja Cements Limited v. Chief Controlling Revenue Authority, C/SR/1/2020, on the non-applicability of Section 5 of the Stamp Act to an order sanctioning such a scheme because a composite scheme of amalgamation between multiple companies is treated as one integrated arrangement and not a bundle of separate transactions for which stamp duty is payable.

Accordingly, the Bombay High Court observed that the amalgamation of Luk India does not constitute a distinct transaction within the scope of Section 5 of the Stamp Act. Consequently, no separate or additional stamp duty is leviable in respect of the amalgamation of Luk India with Schaeffler.

ii. Stamp duty is chargeable on the NCLT order as the 'instrument' and not on the underlying transaction:

The Bombay High Court noted that Section 2(g)(iv) of Stamp Act provides that the order of NCLT passed under Section 230 to 234 of the Companies Act, 2013, constitutes a "conveyance" by which property is transferred.

The Bombay High Court held that the impugned order of Maharashtra Revenue Authority was based on an erroneous premise that there were two company petitions filed before NCLT Mumbai and that a common order had been passed in respect of both.

The Bombay High Court placed reliance on the full bench decision in Chief Controlling Revenue Authority, Pune v. Reliance Industries Limited, Mumbai, 2016 SCC OnLine Bom 1428, wherein it was held that the scheme of the Stamp Act, is based on the chargeability of the instrument and not on the underlying transactions. Consequently, it is immaterial whether the instrument pertains to one or multiple transactions. The duty is attracted to the instrument itself and not on the transaction it embodies.

Accordingly, the Bombay High Court held that it is not permissible to examine or dissect the underlying transactions for the purpose of assessing stamp duty.

iii. No jurisdiction to assess stamp duty on NCLT Chennai Order:

The Bombay High Court further held that even if the order sanctioning the scheme passed by the NCLT Chennai ("NCLT Chennai Order") had not been lodged for adjudication in Chennai and no stamp duty had been paid in respect thereof, the stamp authorities in Mumbai would not have jurisdiction to assess stamp duty on NCLT Chennai Order. As the NCLT Chennai Order was not received in Maharashtra, mere reference of the same in NCLT Mumbai Order would not amount to NCLT Chennai Order being brought in Maharashtra and therefore, would not attract Section 19 of the Stamp Act. Section 19 of the Stamp Act applies only when an instrument is executed outside Maharashtra, is thereafter received in Maharashtra and such instrument becomes liable to higher stamp duty under the law in Maharashtra. Therefore, the stamp duty payable on NCLT Chennai Order is an issue to be considered by the relevant authorities in Chennai.

In light of the above findings, the impugned orders were quashed and set aside. The Bombay High Court held that Schaeffler is liable to pay stamp duty only on the instrument, namely the NCLT Mumbai Order, in accordance with Article 25(da) of the Stamp Act, subject to the cap of INR 25,00,00,000 (Indian Rupees twenty-five crore). As the stamp duty amount was already paid by Schaeffler, the respondents were directed to refund the excess stamp duty of INR 25,00,00,000 (Indian Rupees twenty-five crore) within a period of 8 (eight) weeks from the date of uploading of NCLT Mumbai Order on the website. In the event, the amount is not refunded within the stipulated period, interest would be charged at the rate of 6% (six percent) per annum till the payment of the refund amount.

Please find attached a copy of the Judgment, here.

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