Fast Track Merger: Will It Take The Fast Track Or Derail?

Introduction

The erstwhile Companies Act 1956 (1956 Act) prescribed a court driven procedure for compromises, arrangements and amalgamations in respect of companies (Arrangements), which was fairly cumbersome and time-consuming. This necessitated a need to bring about pragmatic reforms to the procedure for Arrangements, with an aim to make the corporate restructuring process in India smooth and efficient. Accordingly, the provisions pertaining to Arrangements under the Companies Act 2013 (2013 Act) were brought into effect from 15 December 2016.

Sections 230 to 234 of the 2013 Act prescribe the procedure for Arrangements. The power to exercise judicial oversight in respect of such Arrangements, which was earlier vested with the jurisdictional High Courts, has now been entrusted upon the newly established National Company Law Tribunal (Tribunal). One of the most striking features of the new regime for Arrangements is the option given to: (a) small companies; and (b)