Based on the case study and the cited Companies Act, 2013 provisions cited, why was the demerger scheme disapproved by the NCLT?

The NCLT rejected Suraj Pharmaceutical's demerger scheme due to limitations within the legal framework. Here's a breakdown of the reasons: Section 234 of the Companies Act, 2013: This section, as interpreted by the NCLT, did not explicitly permit cross-border demergers involving Indian companies and foreign companies (either as the transferring or resulting company). Rule 25A of the Companies (Compromise, Arrangements and Amalgamations) Rules, 2016: This rule outlines the detailed procedures and requirements for cross-border mergers. However, the NCLT noted a crucial omission: the rule only mentioned "merger" and "amalgamation," not "demerger." Therefore, due to the limitations within Section 234 and the specific wording of Rule 25A, the NCLT concluded that the legal framework at the time did not support Suraj Pharmaceutical's proposed cross-border demerger scheme.