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ARTICLE · 06 OCTOBER 2023

Modifications To Schemes Of Arrangement

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Once a scheme of arrangement has been approved by its shareholders or the relevant National Company Law Tribunal ("NCLT")...

IndiaCorporate/Commercial Law
Rajat Sethi
Rajat Sethi
Meher Mehta
Meher Mehta

Once a scheme of arrangement has been approved by its shareholders or the relevant National Company Law Tribunal ("NCLT"), what, if any, modifications are permissible to the scheme of arrangement without seeking fresh shareholder approval?

This note considers the legal framework for modifications to approved schemes of arrangement. It also examines the proposed merger of Zee Entertainment with Sony Pictures India where this question potentially arises for consideration.

Legal Framework

Section 231(1) of the Companies Act, 2013 ("Companies Act") in relation to the power of the NCLT to enforce any compromise or arrangement provides that the NCLT may at the time of approving a scheme of arrangement or any time thereafter, give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper implementation of the compromise or arrangement.

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This insight/article is intended only as a general discussion of issues and is not intended for any solicitation of work. It should not be regarded as legal advice and no legal or business decision should be based on its content.

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