NATIONAL COMPANY LAW TRIBUNAL

CHANDIGARH BENCH(COURT-II), CHANDIGARH

CP (CAA) 13/Chd/Hry of 2024

(2nd Motion)

(An application under Sections 230 & 232 of the Companies Act, 2013 read
with the Companies (Compromises, Arrangements and Amalgamation) Rules,
2016, and the National Company Law Tribunal Rules, 2016)

IN THE MATTER OF

M/s Convergys India Services Private Limited

(CIN: U74899HR2001PTC111537)
(PAN: AABCC5056G)
Registered Office at:
Two Horizon Centre, Level 6,
Wing B, Golf Course Road,
DLF-5, Sector 43, Gurgaon 122002

... Petitioner Company - 1 / Demerged Company

AND

M/s Concentrix Technologies (India) Private Limited

(CIN: U72300HR2010PTC112259)
(PAN: AAGCM8538E)
Registered Office at:
Two Horizon Centre, Level 6,
Wing B, Golf Course Road,
DLF-5, Sector 43, Gurgaon 122002

... Petitioner Company - 2 / Resulting Company 1

AND

M/s Concentrix Services (Netherland) BV

Registered Office at:
Kabelweg 43, Amsterdam,
Netherlands, 1014 BA

... Non-Applicant Company/ Resulting Company 2

 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

Order pronounced on: 11.07.2025

CORAM: HARNAM SINGH THAKUR, MEMBER (JUDICIAL)

KAUSHALENDRA KUMAR SINGH, MEMBER(TECHNICAL)

Appearance:
For the Petitioners: Mr. Atul V. Sood, Advocate

For the Income Tax: Mr. Yogesh Putney, Senior

Standing Counsel
For the ROC/RD: Mr. Krishan Paul Dutt, AROC

ORDER

1. The present joint Company Petition has been filed by the Petitioner
Companies namely; Convergys India Services Private Limited (hereinafter
referred to as the “Petitioner No. 1” or “Demerged Company”) & Concentrix
Technologies (India) Private Limited (hereinafter referred to as the
“Petitioner No. 2” or “Resulting Company No. 1”), to obtain sanction of this
Tribunal to the Scheme of Arrangement amongst Petitioner No. 1 and
Petitioner No. 2 (hereinafter referred to as the “Scheme”) and Concentrix
Services (Netherland) BV (hereinafter referred to as the “Non-Applicant
Company” or “Resulting Company No. 2”) under Sections 230-232 of the
Companies Act, 2013 (the Act) and other applicable provisions of the Act read
with Companies (Compromises, Arrangements and Amalgamations) Rules,
2016 (the Rules).

2. The Scheme provides for the demerger of the Demerged Undertaking of

the Demerged Company and vesting of the same in the Resulting Company No.
1. The Resulting Company No. 1 is a wholly owned subsidiary of the
Non-Applicant foreign Company (Resulting Company No. 2). The demerged
Company is also a wholly owned subsidiary of a foreign Company- Concentrix
CVG Customer Management Group Inc. As per the scheme of demerger, CRM

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

business of Petitioner Company No. 1 is being transferred to Petitioner

Company No. 2/Resulting Company No. 1. However instead of allotment of
shares to the Petitioner Company No. 1 by Petitioner Company No. 2/
Resulting Company No. 1, the shares are allotted by the holding company of
Resulting Company No. 1, which is a foreign company (Non Applicant
Company/ Resulting Company No. 2) to the shareholders of Petitioner
Company No. 1, which too is a foreign company. The said Scheme Has been
attached as ‘Annexure P-1’ to the Petition.

3. The Petitioner Companies filed first motion Application being CA (CAA)

43/Chd/Hry of 2023 before this Tribunal to obtain appropriate orders to
dispense/convene meetings of Equity Shareholders, Secured Creditors and
Unsecured Creditors, as the case may be, of these Companies for the purpose
of the considering and approving, with or without modification, the aforesaid
Composite Scheme of Arrangement. The First Motion Petition was allowed vide
Order dated 16.04.2024 with the directions to dispense with the requirement of
convening of meetings of above stakeholders of the Petitioner Companies for
the reasons mentioned in the aforesaid order. Copy of the order dated
16.04.2024, passed in the First Motion Application is attached as Annexure
P-15 in the Second Motion Petition filed by the Petitioner Companies. While
disposing of the First Motion Application, the Applicant Companies were inter-
alia directed to issue notice to Regional Director (“RD”), Registrar of Companies
ROC and Income Tax Authorities (“ITD”) and Reserve Bank of India (“RBI”). The
Petitioner Companies have annexed the postal receipts and tracking reports to
show compliance of these directions by way of Annexure P-21.

4. The main objects, date of incorporation, authorized and paid-up share

capital, and the rationale of the Scheme have already been discussed in details
in the first motion order dated 16.04.2024.

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

5. Vide Order dated 03.05.2024, it was directed that the notice of hearing
be published in “Business Standard” (English, Delhi-NCR Edition) and
“Jansatta” (Hindi, Delhi-NC Edition) calling for objections, if any. This Tribunal
also directed the Petitioner Companies to issue notice to the statutory and
regulatory authorities.

6. In compliance of the said order, the Petitioner Companies have filed an

Affidavit of service vide diary no 01432/1 dated 01.07.2024. The notice of
hearing was published in “Business Standard” (English, Delhi NCR Edition)
and “Jansatta” (Hindi, Delhi NCR Edition) both dated 22nd May, 2024. The
original copies of the newspapers are attached as Annexure: 3 of the aforesaid
affidavits. It has also stated in the affidavits that copies of notices were served
upon the Central Government through Regional Director (Northern Region),
Ministry of Corporate Affairs; New Delhi, Registrar of Companies, NCT of Delhi
and Haryana, New Delhi; the Income Tax Department, and Reserve Bank of
India by hand delivery/Speed Post, as the case may be. Copies of the proof of
service of notice to the aforesaid Statutory Authorities, in original are attached
as Annexure: 2 of the aforesaid affidavits.

7. It is also deposed by the authorised signatories of the Petitioner

Companies that they have not received any objection from the public after the
publication of the aforementioned advertisement on 22nd May, 2024 and till the
date of filing the aforesaid affidavits.

8. In response to the abovementioned notices, the statutory authorities

have furnished their Reports and the Petitioner Companies have filed their
clarification/submissions thereon. The same are as follows:

a. Regional Director (RD) and Registrar of Companies (ROC)

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

i. In response to the above stated notice, the Regional Director (RD)

vide Dairy No 01432/2 dated 19.08.2024 filed its report dated
07.08.2024 enclosing therewith the report of the RoC dated 04.07.2024.
The said Report of RD also captures the response of the Petitioner
Companies as under:

Sl. Observation(s) of Response of the Petitioner Companies

No. the ROC/RD
1. “In the present Compliance with requirement of section:
scheme of
demerger no Section 232(1)(b) of the Act states “that under the
undertakings, scheme, the whole or part of the undertaking,
properties, property or liabilities of any company (hereinafter
liabilities are being referred to as the transferor company) is required to
transferred to the be transferred to another company (hereinafter
Resulting referred to as the transferee company)”
Company no. 02,
However, section The requirement of section is fulfilled on transfer of
232(1)(b) an undertaking from transferor company to the
specifically transferee company. There is no such requirement
states that the that the consideration for transfer should come from
"that under the same transferee company.
the scheme, the
whole or any In the present Scheme, CRM business undertaking
part of the (as defined in scheme) of transferor company
undertaking, (Convergys India Services Private Limited) is getting
property or transferred to transferee company (Concentrix
liabilities of any Technologies (India) Private Limited). Thereby, the
company requirement of section is met.
(hereinafter
referred to as the Further, Section 230 to 232 of the Act does not
transferor contain any restrictive provision on issue of shares
company) is by the parent of the resulting company.
required to be
transferred Above view is also upheld by Hon’ble Bombay High
to another Court in the case of Thomas Cook Insurance
company Services (India) Limited [Company Petition No 99 of
(hereinafter 2015] and GlobeOp Financial Services (India) Pvt.
referred to as the Ltd. [Company Petition No.641 of 2014] wherein it
transferee was held as follows:
company), or
is ➢ It is not that in every case the consideration
proposed to be for transfer of an undertaking as part of a
divided among scheme of arrangement must come in the
and transferred to form of an allotment of shares of a transferee
two or all of company or for that matter the scheme must
companies. Hence, involve allotment of shares. The consideration
Resulting
Company no.02 is
not satisfying the
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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

requirements of for such transfer can be any legitimate

being Transferee consideration, which the transferor is entitled
Company as a to accept for contract of transfer.
part of the present
scheme, which ➢ The scheme may, thus, not provide for any
may be clarified by allotment of shares at all or provide any other
the applicants. appropriate consideration including allotment
of shares of a holding company of the
transferee company.

➢ Acceptance of any particular consideration is

part of the commercial wisdom to be
exercised by the shareholders of the
transferor company.

➢ As long as such consideration is not against

public interest or in any other manner illegal
or inappropriate, it is not for the company
court to accept or reject such consideration.

Similar question was discussed in the Scheme of

Arrangement for Reckitt Benckiser (India) Private
Limited [CP (CAA) No.7/Chd/Hry/2019] wherein,
under comparable fact pattern, the Hon’ble NCLT
Chandigarh accepted demerger between Indian
entities wherein consideration was discharged by a
foreign entity. Hon’ble NCLT in its order stated as
follows:

“18. In view of the decisions of the Hon’ble Bombay

High Court (supra), the contention of the Transferee
Company that it is an established position of law
that consideration for demerger can come in the
form of any legitimate consideration including in
the form of issue of shares by holding company
of the resulting company is to be accepted.”
● Precedents of similar scheme undertaken
in past:

The proposed Scheme is also supported by multiple

precedents wherein Tribunals and High Courts have
approved similar arrangement both in present Act
and erstwhile provisions under Companies Act,
1956.

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

2. The present Section 234 not applicable to demerger:

application of At the outset we would like to mention that Section
demerger are filed 234 of the Act is applicable only in case of merger
under section and amalgamations of a foreign company into an
230-232 of the Indian company or vice-versa, it does not apply to
Companies Act, demerger.
2013. However, in Considering the present Scheme involves demerger
the scheme the of CRM business of Demerged Company to Resulting
resulting company Company 01, Section 234 of the Act does not apply
no. 02 is to present Scheme.
incorporated An extract of section is provided below:
under the laws of 234. Merger or Amalgamation of Company with
the Netherlands. Foreign Company.
Thus, the scheme (1) The provisions of this Chapter unless otherwise
should also provided under any other law for the time being in
comply with the force, shall apply mutatis mutandis to schemes of
provision of mergers and amalgamations between companies
section 234 of the registered under this Act and companies incorporated
Companies Act, in the jurisdictions of such countries as may be
2013. But, the notified from time to time by the Central Government:
scheme is silent provided that the Central Government may make
about the rules, in consultation with the Reserve Bank of India,
compliance of in connection with mergers and amalgamations
section 234 of the provided under this section.

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

Companies Act, (2) Subject to the provisions of any other law for the
2013. time being in force, foreign company, may with the
prior approval of the Reserve Bank of 'India, merge
into a company registered under this Act or vice versa
and the terms and conditions of the scheme of merger
may provide, among other things, for the payment of
consideration to the shareholders of the merging
company in cash, or in Depository Receipts, or partly
in cash and partly in Depository Receipts, as the case
may be, as per the scheme to be drawn up for the
purpose

It is clear from the bare text of the said Section

234 of the Act that it is applicable on merger of
an Indian Company with a Foreign Company or
vice-versa. Further, the section does not have an
applicability to the present Scheme where both
the Applicant Companies are Indian companies
and neither of them is getting merged into a
foreign company.

Further, in the case of Johnson & Johnson Private

Limited, Hon’ble NCLT Mumbai accepted petitioner’s
affidavit with respect to Section 234 of the Act which
stated as follows:
“ ..section 234 of Companies Act 2013 applies when
there is a merger of an Indian company with a foreign
company. It is amply clear from the bare text of
section 234 that it has no applicability where the
Petitioner Companies are both Indian companies and
neither is a foreign company. While Resulting
Company 2 is a foreign company, no Indian company
is merging into Resulting Company 2. Resulting
Company 2 is only discharging the consideration for
the demerger between Indian companies by issuing
its shares.”

Given the above, it is submitted that section 234

of the Act applies only when there is a merger of
an Indian company with a foreign company or
vice-a-versa.

● Demerger is between Indian entities and

role of Resulting Company 02 is only to
discharge consideration: The proposed
Scheme provides for the demerger of the
“CRM Business” or “Demerged Undertaking”
(as defined in the Scheme) of an Indian
company i.e. Convergys India Services Private
Limited and vesting of the same in another

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

Indian company i.e. Concentrix Technologies

(India) Private Limited. Further, involvement
of Foreign Company (being a NonApplicant
Company) is only limited to discharge of
consideration for the demerger between the
Applicant Companies. Thereby section 234 of
the Act is not applicable to the present
scheme.
Further, similar schemes of a demerger
between Indian companies wherein
consideration has been issued by a foreign
company have been approved by Hon'ble
NCLT Chandigarh and Hon’ble Mumbai High
Court and various other courts (precedents
provided in point 1 above).
Courts have held that the consideration for
transfer of an undertaking can come in the
form of any legitimate consideration which
the transferor is entitled to accept for
contract of transfer and that the
consideration in the form of shares issued
by the parent company of the transferee is
a valid consideration.
Further, your good self may consider that all
applications for merger, amalgamation and
demergers can be filed only under section 230
and 230 of the Act. This is also supported by
commentary in the Eighteenth edition of “A
Ramaiya Guide to Companies Act”.
3. As per rule Rule 25A of the Companies (Arrangement and
25A(2)(b) of the Amalgamation) Rules, 2016 (“Rules”) deals with
Companies ‘Merger or amalgamation of a foreign company
(Arrangement and with a Company and vice versa”.
Amalgamations)
Rules, 2016 As mentioned in point 2 above, Section 234 of the
"Transferee Act, and thereby Rule 25A of the Rules does not
Company shall have applicability to the present Scheme where the
ensure that Petitioner Companies are both Indian companies
valuation is and neither is a foreign company. While the
conducted by Resulting Company No. 2 is a foreign company, its
valuers who are role is limited to discharging the consideration and
members of a no Indian company is merging into the Resulting
recognised Company No. 2. Thereby, valuation as per Rule 25A
professional is not applicable to the present scheme.
body in
the jurisdiction of Further, considering the current scheme has been
the transferee filed under Section 230-232 of the Act, the present
company and scheme fulfils the valuation requirement as stated in
further that such Section 230(2)(v) of the Act and Rule 27 of the Rules
valuation is in which mandates as follows:
accordance with

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

internationally “(v) a valuation report in respect of the shares and the

accepted property and all assets, tangible and intangible,
principles on movable and immovable, of the company by a
accounting and registered valuer.”
valuation. A
declaration to this For the present Scheme, the Petitioners have duly
effect shall be obtained valuation report dated June 12, 2023 from
attached with the D and P Advisory (Registered Valuer) which fulfils
application made the requirement of the Act and the Rules.
to the Reserve
Bank of India for
obtaining its
approval under
clause (a) of this
sub-rule".
However, no
valuation has
been done/placed
on record to show
that valuation has
been done by a
valuer of the
Netherlands. Also
the compliance of
the RBI's "Foreign
Exchange
Management
(Cross Border
Merger)
Regulations, 2018"
has not been
shown.
4. In the present Notice already issued to tax authorities:
scheme of We have served notice of this Petition to Income Tax
demerger it is Department vide notice dated April 18, 2024 and
observed that the May 21, 2024 pursuant to the directions of Tribunal
no undertaking(s)/ for which no representation has been received from
(units) are being the Income Tax Department yet.
transferred to ● Present proposition fulfils the definition of
Resulting demerger as per IT Act: As per Indian
Company no. 02 Income-tax Act, 1961 (“IT Act’), a demerger is
and also no considered as tax neutral if it fulfils the
consideration are conditions prescribed under definition of
being paid by the “demerger” under section 2(19AA) of the Act.
Resulting i. all the property of the undertaking,
Company no. 01 being transferred by the demerged
to the company, immediately before the
shareholders of demerger, becomes the property of the
the Demerged resulting company by virtue of the
Company. Hence, demerger;

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 NCLT Chandigarh Bench
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the views of the ii. all the liabilities relatable to the

Income Tax undertaking, being transferred by the
Department may demerged company, immediately
be sought before the demerger, become the
regarding the liabilities of the resulting company by
coverage of this virtue of the demerger;
demerger under iii. the property and the liabilities of the
their applicable undertaking or undertakings being
tax laws. transferred by the demerged company
are transferred at values appearing in
its books of account immediately
before the demerger;
iv. the resulting company issues, in
consideration of the demerger, its
shares to the shareholders of the
demerged company on a proportionate
basis except where the resulting
company itself is a shareholder of the
demerged company;
v. the shareholders holding not less than
three-fourths in value of the shares in
the demerged company (other than
shares already held therein
immediately before the demerger, or by
a nominee for, the resulting company
or, its subsidiary) become shareholders
of the resulting company or companies
by virtue of the demerger;
vi. the transfer of the undertaking is on a
going concern basis;
vii. the demerger is in accordance with the
conditions, if any, notified under
sub-section (5) of section 72A by the
Central Government in this behalf.
Since all the assets and liabilities of the
demerged undertaking will be demerged by
Demerged Company into Resulting Co 01 at book
values on a going concern basis, condition (i) to
(iii) and (vi) will be fulfilled.
With respect to compliance with condition (iv) and
(v), the IT Act has provided definition of “Resulting
Company” in section 2(41) as follows:
"resulting company” means one or more companies
(including a wholly owned subsidiary thereof] to
which the undertaking of the demerged company is
transferred in a demerger and, the resulting company
in consideration of such transfer of undertaking,
issues shares to the shareholders of the demerged
company and includes any authority or body or local

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

authority or public sector company or a company

established, constituted or formed as a result of
demerger;

Based on reading of definition of Resulting Company

provided in IT Act, following is clear:
● Definition of Resulting Company is a plural
definition wherein more than one company
can be a resulting company.
● Parent and subsidiaries can both become
Resulting companies

In the present case, since Resulting Company no. 01

and Resulting Company no. 02 have a subsidiary
and parent relationship, they satisfy the
requirement of “resulting company” as provided in
the IT Act. Thereby, the present proposition of issue
of shares by the parent company of Resulting
Company no. 01 to shareholder of Demerged
Company fulfils the condition (iv) and (v).
’]fierefors the proposed Scheme fulfils all the
conditions specified in IT Act and qualifies as a tax
neutral demerger.

● No restrictive provision in the IT Act: Further,

there is nothing in the definition of “resulting
company” or “demerger” that suggests that
the company receiving the assets and the
company issuing the shares must be one and
the same company. Should that be a criteria,
the plurality suggested in the definition of
“resulting company” by way of specifically
allowing holding and its wholly owned
subsidiary as resulting companies would
become otiose. Accordingly, receipt of assets
by one of the resulting companies (i.e.,
Resulting Company 01 in present case) and
issuance of shares by the other resulting
company (i.e., Resulting Company 02 in
present case) should be permitted within the
aforesaid definition.
5. In the present Notice already issued to Reserve Bank of India
scheme, the (“RBI”):
consideration for It is submitted that we have served notice of this
demerger is being Petition to RBI vide notice dated April 18, 2024 and
paid by the May 21, 2024 pursuant to the directions of Tribunal
Resulting for which no representation has been received from
company no. 02 the Reserve Bank of India yet.
which is
incorporated

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under the laws of ● Scheme does not require compliance with

Netherlands (i.e. FEMA/ RBI regulations: The present
Foreign Entity) to involves two separate steps. Our comments in
the shareholders relation to each of the steps and why it does
of the Demerged not require any FEMA/ RBI compliance is
company i.e. given below:
"Concentrix US"
which is also the i. Transfer of captive business undertaking of
Foreign Entity. Demerged Company to Resulting Company 01 - This
Thus, it appears is purely a domestic transaction between two Indian
that the demerger entities and the same does not involve any
of the unit is done acquisition/ creation/ transfer of a right to acquire
in India and any asset outside India.
consideration for
the said demerger ii. Issuance of shares by Resulting Company 02 to
is flowing from the shareholder of Demerged Company (USA Co) - Both
Netherlands to Resulting Co 02 and shareholder of Demerged
shareholders in Company are body corporates incorporated outside
the US. Hence, the India. Therefore, issuance of shares outside India
Company may be should not be regulated by FEMA/ RBI provisions.
asked to ensure
the compliances of Thereby, the Petitioner companies submit that the
FEMA and RBI Scheme does not require any FEMA/ RBI
Regulations. compliance.
6. In case of During FY 2022-23, the demerged company has
Demerged granted loans of INR 1.13 crores to employees of
Company and which only INR 0.74 crore is outstanding as on
Resulting March 31, 2023. Further, the Resulting Company
Company no. 01 no. 1 has granted loans of INR 0.10 crores to
auditor has employees of which only INR 0.05 crore is
stated in the outstanding as on March 31, 2023.
audit report for
the FY ended Section 185 of the Act deals with scenarios when
31.03.2023 that loan is extended to directors or any enterprise in
the company has which the director is interested. We would like to
granted loans confirm that no loan has been granted to directors
and advances to or enterprises in which the director is interested,
other parties. thereby the section 185 of the Act is not applicable
Hence, the for such loans.
companies may Section 186 of the Act deals with loans and
be asked to investment by Company exceeding prescribed
ensure the thresholds requiring shareholder consent.
compliances of Considering the quantum of loans and advances
the provisions of does not exceed the threshold for both the
sections 185 and companies, shareholder consent is not required for
186 of the such loans.
Companies Act,
2013. Therefore, considering the arguments presented
above, we would like to plead before your good
self to accept the arguments for

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non-applicability of Section 185 and 186 of the

Act to the present Scheme.
7. In case of With respect to Resulting Company 01: Statutory
Demerged dues which are under litigation for the Resulting
Company and Company no. 1 will continue as is in the name of
Resulting Resulting Company no. 1, thereby there will be no
Company impact of the scheme on the litigations of Resulting
no.0lauditor has Company no. 1
stated in the audit
report for the FY With respect to Demerged Company: With respect
ended 31.03.2023 to statutory dues which are under litigation for the
that the company Demerged Company, it will form part of demerged
has not paid the undertaking and will be transferred to Resulting
certain statutory Company no. Ol. Thereby, it will continue as is (in
dues on account the name of Resulting Company no. 01) post
of dispute and the completion of the present scheme.
cases for the same
are being pending
before their
respective
authority..”

b. Income Tax Department

i. The Income Tax Department has furnished its comments/reports

in respect of all the Petitioner Companies to this Tribunal vide diary no.
01432/3 dated 15th October, 2024. The Income Tax Department had
given its “No Objection” to the proposed Scheme of Arrangement.
However, certain Income Tax Dues/Demands have been pointed out by
the Income Tax Department. With respect to the Demerged Company, the
status of pending appeals and outstanding demands are as under:

Sr. No. AY Demand u/s Outstanding Demand Appeal

(In INR) Pending with

1. 2004-05 - - High Court

2. 2007-08 143(3) 2,18,979 -

3. 2008-09 115 WR 3,31,112 -

4. 2009-10 220(2) 3,88,79,051 -

5. 2015-16 143(3) 1,89,72,520 -

6. 2015-16 254 10,542 -

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7. 2017-18 143(3) 18,89,11,470 ITAT

8. 2018-19 154 16,08,62,215 ITAT

9. 2020-21 143(3) 12,43,60,980 -

ii. With respect to the Resulting Company No. 1, Outstanding dues is

Rs 3,15,180/- for AY 2019-20 and there are no pending proceedings.
iii. The Petitioners filed their response vide Diary No. 01432/4 and
01432/5 dated 20th January, 2025, which is reproduced below:
a. Petitioner Company 1/ Demerged Company hereby
undertakes that upon the Scheme becoming effective, such
demands shall be paid as per provisions of the Income Tax Act,
1961, crystallizing upon final order of relevant adjudicating
authority.
b. Petitioner Company 2/ Resulting Company 1 hereby
undertakes that the Petitioner Company 2 /Resulting Company 1
will remain in existence, and it shall discharge final tax liability, if
any, as per provisions of the Income Tax Act, 1961, crystallizing
upon final order of relevant adjudicating authority.
c. The Tribunal may direct that passing of the Scheme shall be
no limitation to the power/right of the Income Tax Authorities _for
recovery of pending income tax dues as provided in the law and
Income Tax Authorities will be entitled to proceed against the
relevant entity.

9. The Petitioners have in compliance of order dated 15.05.2025 placed on

record their latest Audited Financial Statements for the Financial Year ended
31st March, 2024 and note on accounting treatment vide Diary No. 01432/6
dated 23rd May, 2025.

10. The certificates of the respective Statutory Auditors of the Petitioner

Companies certifying that the accounting treatment proposed in the Scheme is
in conformity with the accounting standards prescribed under Section 133 of
the Companies Act, 2013 and Generally Accepted Accounting Principles in
India (Indian GAAP), are attached as Annexure P-17 in the Second Motion
Petition filed by the petitioner Companies.

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11. We have heard the learned Counsel for Petitioner Companies and learned
Senior Standing Counsels for the Income Tax Department and ARoC and have
perused the records carefully.

12. The observations given by RD/RoC and Income Tax authorities have
been properly responded to by the Ld. Counsel for the Petitioner Company No.
1 and Petitioner Company No. 2. There is no further observation which may be
against their scheme of demerger. The RBI has not made any representation.
Nevertheless it is explained that both Resulting Company No. 2 and
shareholders of demerged Company are body corporate incorporated outside
India, therefore issuance of shares outside India are not to be regulated by
FEMA/RBI provisions and as such scheme does not require any FEMA/RBI
compliance. In the context, the Petitioner Companies have also filed an affidavit
explaining the accounting entries in demerged company and Resulting
Company No. 1 pursuant to the implementation of the scheme.

13. In the context of the above discussion, the Composite Scheme

contemplated between the petitioner companies, appears to be prima facie in
compliance with all the requirements stipulated under the relevant Sections of
the Companies Act, 2013. In the absence of any objections before us and since
all the requisite statutory compliance have been fulfilled, this Tribunal
sanctions the Composite Scheme of Arrangement appended as Annexure P-1
with this Petition.

14. Notwithstanding the submission that no investigation is pending against

any of the Petitioner Companies, if there is any deficiency found or, violation
committed qua any enactment, statutory rule or regulation, the sanction
granted by this Tribunal will not come in the way of action being taken, albeit,
in accordance with law, against the concerned persons, directors and officials
of the petitioners.

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

15. While approving the Composite Scheme as above, it is clarified that this
order should not be construed as an order in any way granting exemption from
payment of stamp duty, taxes or any other charges, if any, payment is due or
required in accordance with law or in respect to any permission/compliance
with any other requirement which may be specifically required under any law.

16. The Income Tax Department will be free to examine the aspect of any tax
payable as a result of the sanction of the scheme and if it is found that the
scheme of arrangement ultimately results in tax avoidance or is not in
accordance with the applicable provisions of the Income Tax Act, then the
Income Tax Department shall be at liberty to initiate appropriate course of
action in accordance with the law. Any sanction of the scheme of arrangement
under section 230-232 of the Companies Act, 2013 shall not adversely affect
the rights of the Income Tax Department or any past, present or future
proceedings and the sanction of the scheme shall not come in its way for the
appropriate course of action as per law for the tax liabilities, if any.

17. THIS TRIBUNAL DO FURTHER ORDER:

i. The Composite Scheme of Arrangement appended as Annexure P-1

with this Petition is hereby sanctioned and it is declared that the same
shall be binding on the Petitioner Companies and their Shareholders
and Creditors and all concerned under the Scheme.
ii. As per the scheme, all the property, right and powers of the
proposed demerged undertaking of the Petitioner Company No. 1
(Demerged Company) be transferred without further act or deed to the
Petitioner Company No. 2 (Resulting Company No. 1) and accordingly,
the same shall pursuant to Sections 230 & 232 of the Companies Act,
2013, be transferred to and vested in the Resulting Company No. 1 for
all the estate and interest of the Demerged Company pertaining to the

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

Demerged Undertaking, but subject nevertheless to all charges now

affecting the same;
iii. That all the liabilities and duties of the Demerged Business of the
Demerged Company be transferred, without further act or deed, to the
Petitioner Company No. 2/Resulting Company No. 1 and accordingly
the same shall pursuant to Sections 230 & 232 of the Companies Act,
2013, be transferred to and become the liabilities and duties of the
Petitioner Company No. 2/Resulting Company No. 1; and
iv. Upon the Scheme becoming effective, all the employees of the
Demerged Business of the Demerged Company, in service on the
Effective Date, shall be transferred to and shall become the employees
of the Petitioner Company No. 2/Resulting Company No. 1 as provided
in the Scheme; and
v. Upon the Scheme becoming effective, all proceedings now pending
by or against the Demerged Business of the Demerged Company be
continued by or against the Petitioner Company No. 2/Resulting
Company No. 1; and
vi. The Resulting Company No. 1 shall, without further application,
allot to the existing members of the Demerged Company shares of the
Resulting Company No. 1 to which they are entitled under the said
Scheme;
vii. The Appointed Date for the Demerger of of Petitioner Company No.
1 into Resulting Company No. 1 shall be same date as the Effective
Date, as provided in the Scheme;
viii. The Petitioner Companies will furnish a self certified copy of the
approved Scheme and Schedule of Assets of the Demerged Undertaking
to the Designated Registrar of this Tribunal. The Designated Registrar
will issue a certified copy of this order together with the authenticated
copy of the approved Scheme and Schedule of Assets as its enclosures.
All the Authorities are directed to act on the certified copy of this order
as issued by the Designated Registrar.

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 NCLT Chandigarh Bench
CP (CAA) No. 13/Chd/Hry/2024 (2nd Motion)

ix. The Resulting Company 1 is directed to file the certified copy of

this Order along with the copy of Scheme and Schedule of Assets with
the concerned Registrar of Companies, electronically along with e-form
INC-28 in addition to a physical copy in e-form INC-28 within 30 days
or an extended timeline with payment of additional fees, as may be
applicable, from the date of receipt of the Order. Following that
necessary steps shall be taken up by the Registrar of Companies.
x. The Resulting Company 1 is directed to lodge a copy of this Order
and the approved Scheme and Schedule of Assets of the Resulting
Company 1, duly authenticated by the Designated Registrar of this
Tribunal, with the concerned Superintendent of Stamps, for the
purpose of adjudication of stamp duty, if any, within 60 days from the
date of the Order.
xi. Any person aggrieved shall be at liberty to apply to the Tribunal in
the above matter for any direction that may be necessary.

18. All the concerned Regulatory Authorities to act on a copy of this order
annexed with the Scheme duly authenticated by the Designated Registrar of
this Bench.

19. The Company Petition (CAA) No. 13/Chd/Hry of 2024 is allowed and
disposed of accordingly.

Sd/- Sd/-
(Kaushalendra Kumar Singh) (Harnam Singh Thakur)
Member (Technical) Member (Judicial)

Reet

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