NCLT Bengaluru Slaps ₹5 Lakh Penalty On Lifestyle International For Non-Disclosure In Capital Reduction Plea

The National Company Law Tribunal (NCLT) Bengaluru has approved a Rs. 6.08 crore reduction in the share capital of Lifestyle International Private Limited, a fashion and lifestyle retail company, but imposed a Rs. 5 lakh penalty for what it termed a “casual approach” to the proceedings.

A coram of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada passed the order on December 15, 2025. The tribunal approved the selective capital reduction under Section 66 of the Companies Act, 2013, but criticised the company for failing to disclose its secured creditors until the Bench intervened.

Lifestyle International is a part of the Dubai-based Landmark Group. It had initially failed to disclose seven open secured charges amounting to Rs. 770 crore as of November 30, 2023 while seeking the capital reduction. The omission came to light only after the tribunal intervened during a hearing on June 13, 2024. Even after revised disclosures, five secured creditors with charges totalling Rs. 550 crore remained undisclosed.

Rejecting the company's explanation that the lapse was inadvertent, the tribunal said, “We do not approve of such Casual approach on part of the Company and its Auditor and are of the Opinion that the Proceedings before this authority deserve and should be accorded due seriousness.”

As a penalty, the tribunal directed the company to deposit Rs. 3 lakh in the PM National Relief Fund and Rs. 2 lakh in the Chief Minister's Relief Fund, Karnataka, within four weeks.

On merits, the tribunal approved the restructuring. The scheme involves cancellation of 60,83,093 equity shares held by 25 minority shareholders outside the promoter and management group. These shares represent 4.96 percent of the paid-up capital.

The company said the reduction was aimed at returning surplus funds not required for business operations. It agreed to pay Rs. 1,195 per share to the exiting investors. The total payout is about Rs 727 crore.

The tribunal noted that the company's net worth exceeds Rs. 4,800 crore. The Board approved the proposal in September 2023. Subsequently, shareholders approved the proposal by way of a special resolution on October 31, 2023.

Later, after the tribunal's intervention, the company also placed on record no‑objection certificates from all its secured creditors addressing the concerns earlier flagged by the Regional Director and the Registrar of Companies.

With these directions, the tribunal allowed the petition and disposed of the proceedings.

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