Different NCLT Jurisdictions in Scheme Proceedings: Filing, Transfer & Effective Date

Summary: Where the registered offices of transferor and transferee companies fall within the territorial jurisdiction of different NCLT Benches, the respective companies should ordinarily approach their respective jurisdictional Benches for proceedings under Sections 230–232 of the Companies Act, 2013. Participation in the same Scheme of Arrangement or Amalgamation does not by itself confer territorial jurisdiction upon one Bench over a company situated within another Bench’s jurisdiction. Where proceedings concerning the same Scheme are pending before different Benches, Rule 16(d) of the NCLT Rules, 2016 empowers the President of the NCLT, where circumstances warrant, to transfer a pending case from one Bench to another so that the matters may be heard by a single Bench. JAK Builders illustrates this transfer mechanism, while M.M. Castings and the Minda TG Rubber–Toyoda Gosei Minda India proceedings demonstrate that separate proceedings may also continue before respective jurisdictional Benches. Where separate NCLT Benches sanction the same Scheme, its Effective Date depends upon the definition and conditions contained in the sanctioned Scheme. If the Scheme defines the Effective Date as the date on which the last sanction order is filed with the Registrar of Companies, that later ROC filing date becomes the Effective Date rather than automatically the date of the second NCLT order.

Question of Jurisdiction of Tribunal under Scheme of Compromise or Arrangement

Where the registered offices of the transferor and transferee companies are situated within the territorial jurisdiction of different NCLT Benches, before which NCLT should applications under Sections 230–232 of the Companies Act, 2013 be filed?

Where the registered offices of the transferor and transferee companies fall within the territorial jurisdiction of different NCLT Benches, the respective companies should ordinarily approach their respective jurisdictional NCLT Benches. The fact that the companies are parties to the same Scheme of Arrangement or Amalgamation does not, by itself, confer territorial jurisdiction upon one NCLT Bench over a company whose registered office falls within the jurisdiction of another Bench.

However, where proceedings relating to the same Scheme are pending before different NCLT Benches, Rule 16(d) of the NCLT Rules, 2016 empowers the President of the NCLT to transfer a case from one Bench to another where the circumstances so warrant. Therefore, the proceedings may, where appropriate, be transferred to and heard by a single Bench.

Importantly, Rule 16(d) is a mechanism for transfer of a pending proceeding; it does not, by itself, confer original territorial jurisdiction upon a Bench which otherwise has no territorial jurisdiction over the concerned company.

JAK Builders – Principle

In JAK Builders Pvt. Ltd. & Ors., the transferor companies had their registered offices at Gurgaon, Haryana, whereas the transferee company had its registered office at Nehru Place, New Delhi. Applications relating to the same merger were consequently filed before the NCLT, Chandigarh and the NCLT, New Delhi.

The NCLT, New Delhi dismissed the application on the ground of lack of territorial jurisdiction.

The matter was considered by the NCLAT with reference to Rule 16(d) of the NCLT Rules, 2016, which empowers the President to:

“transfer any case from one Bench to other Bench when the circumstances so warrant.”

The NCLAT held, in substance, that where proceedings concerning the same Scheme are pending before different NCLT Benches, the circumstances may warrant exercise of the President’s power under Rule 16(d), so that the matters can be heard by a single Bench.

Accordingly, the NCLAT set aside the order of the NCLT, New Delhi and granted liberty to the parties to approach the President of the NCLT for transfer of one of the proceedings to the other Bench.

Principle emerging from JAK Builders

The decision demonstrates that where companies involved in the same Scheme fall within the territorial jurisdiction of different NCLT Benches, Rule 16(d) can be invoked to transfer one of the pending proceedings so that the Scheme is considered by one Bench.

However, the decision should not be understood to mean that every Scheme involving companies situated in different jurisdictions must necessarily be transferred to one Bench.

TA (Co. Act) 34(PB)/2023

The practical application of Rule 16(d) is also demonstrated in TA (Co. Act) 34(PB)/2023.

In that matter, the companies fell within the territorial jurisdiction of the Cuttack and Kolkata NCLT Benches. An amalgamation proceeding was pending before the Cuttack Bench, while the principal Scheme proceedings were pending before the Kolkata Bench.

On 22 September 2023, the President of the NCLT exercised the power under Rule 16(d) and transferred the Cuttack proceeding to the Kolkata Bench, so that the matters relating to the same Scheme could be dealt with by one Bench.

Thus, this proceeding provides a practical example of the actual exercise of Rule 16(d) for transferring a Section 230–232 proceeding between different NCLT Benches.

Cases where proceedings continued before different Benches

The existence of Rule 16(d), however, does not mean that proceedings before different jurisdictional Benches must invariably be transferred. There are instances where companies falling within different NCLT jurisdictions have proceeded before their respective jurisdictional Benches and the corresponding Scheme proceedings have been dealt with separately.

M.M. Castings Pvt. Ltd.

In M.M. Castings Pvt. Ltd., C.P. (CAA) 78/2024, the Demerged Company had its registered office in New Delhi, whereas the Resulting Company, GNU Steel Casting Pvt. Ltd., fell within the jurisdiction of the NCLT, Chandigarh Bench.

The NCLT, New Delhi recognised that the Resulting Company fell within the jurisdiction of the Chandigarh Bench and that the requisite proceedings concerning that company had been filed before the Chandigarh Bench.

This illustrates the principle that a company falling within another NCLT jurisdiction does not automatically become subject to the territorial jurisdiction of the Bench dealing with the other company merely because both companies are parties to the same Scheme.

Minda TG Rubber Pvt. Ltd. / Toyoda Gosei Minda India Pvt. Ltd.

The Minda TG Rubber Pvt. Ltd. – Toyoda Gosei Minda India Pvt. Ltd. amalgamation is another useful illustration.

The corresponding Scheme proceedings were dealt with by different NCLT Benches, including the New Delhi and Jaipur Benches. The Jaipur Bench sanctioned the Scheme on 23 June 2022, while the New Delhi Bench subsequently proceeded with the corresponding proceedings and took note of the order passed by the Jaipur Bench.

The proceedings therefore demonstrate that, in an appropriate case, separate proceedings before the respective jurisdictional Benches can continue and ultimately culminate in orders concerning the same Scheme, without the necessity of transferring every proceeding to one Bench under Rule 16(d).

Correct Legal Position

Therefore, the legal position may be stated as follows:

Where the registered offices of the transferor and transferee companies are situated within the territorial jurisdiction of different NCLT Benches, the respective companies should ordinarily institute the Scheme proceedings before their respective jurisdictional Benches. The fact that the companies are parties to the same Scheme does not, by itself, confer territorial jurisdiction upon one Bench over a company situated within the jurisdiction of another Bench.

Where proceedings concerning the same Scheme are pending before different NCLT Benches, the President of the NCLT may, where the circumstances so warrant, exercise the power under Rule 16(d) of the NCLT Rules, 2016 to transfer one proceeding to another Bench so that the matters may be heard together. However, transfer under Rule 16(d) is not itself the source of original territorial jurisdiction. In the absence of such transfer, the respective jurisdictional Benches may continue to deal with the proceedings falling within their respective territorial jurisdictions.

Practical distinction

Effective Date Where Separate NCLT Benches Pass Orders

Question: Where the transferor and transferee companies fall within the territorial jurisdiction of different NCLT Benches and the respective NCLT Benches pass separate orders sanctioning the same Scheme of Arrangement or Amalgamation, what shall be considered as the Effective Date of the Scheme?

Answer: Where the respective NCLT Benches pass separate orders sanctioning the same Scheme, the Scheme will become effective in accordance with the Effective Date specified in the Scheme as sanctioned by the NCLT.

Where the Scheme provides that the Effective Date means the date on which the last of the orders of the respective NCLT Benches sanctioning the Scheme is filed with the Registrar of Companies (ROC), the Effective Date will be the date on which the last such order is filed with the ROC.

Example

Suppose:

• The Transferor Company falls within the jurisdiction of NCLT Chandigarh.
• The Transferee Company falls within the jurisdiction of NCLT Delhi.
• NCLT Chandigarh sanctions the Scheme on 10 September 2026.
• NCLT Delhi sanctions the Scheme on 15 September 2026.
• The Chandigarh order is filed with the ROC on 18 September 2026.
• The Delhi order is filed with the ROC on 22 September 2026.

If the Scheme defines the Effective Date as the date on which the last of the orders sanctioning the Scheme is filed with the ROC, the Effective Date will be:

22 September 2026- because the Delhi NCLT order was the last of the requisite orders to be filed with the ROC.

Important Distinction

The date of the second NCLT order should not automatically be treated as the Effective Date.

The relevant date depends upon the definition of “Effective Date” in the Scheme as sanctioned by the NCLT and the conditions prescribed therein.

Thus: Appointed Date = the date from which the Scheme is intended to operate as specified in the Scheme and sanctioned by the Tribunal.

Effective Date = the date on which the conditions specified in the Scheme for the Scheme to become effective are fulfilled, which may, where so provided, be the date of filing of the last NCLT order with the ROC.

Conclusion

Therefore, where separate NCLT Benches sanction the same Scheme, the Scheme can be made effective after the orders of the respective Benches have been obtained and the prescribed statutory filings and other conditions have been fulfilled. Where the Scheme specifically provides that the Effective Date is the date of filing of the last NCLT order with the ROC, the later ROC filing date will be the Effective Date.

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