Authority: National Company Law Tribunal, Mumbai Bench-I

Order Date: 07.07.2026

Case Overview

The National Company Law Tribunal (NCLT) Mumbai Bench-I heard a company petition (C.P.(CAA)/57(MB)2026) seeking sanction for a Composite Scheme of Arrangement under Sections 230 to 232 and Section 66 of the Companies Act, 2013. The scheme involves three petitioner companies: Microtech Software and Consultants Private Limited (Transferor Company, CIN: U72200MH1989PTC051432), ETP International Private Limited (Transferee Company/Demerged Company, CIN: U72200MH1998PTC117646), and ETP Solutions Private Limited (Resulting Company, CIN: U58201MH2025PTC457162). All companies share a registered office at ETP House, 124, Saki Vihar Road, Andheri (East), Mumbai- 400072.

The scheme comprises two stages. First, Microtech Software is amalgamated with ETP International, leading to Microtech's dissolution without winding up. Second, ETP International (as the Demerged Company) transfers its 'Software Business' or 'Demerged Undertaking'—defined as the business of acquiring, creating, developing, selling, marketing, distributing, implementing, and supporting all types of software—to the newly incorporated ETP Solutions on a going concern basis. ETP International will retain its 'Remaining Business,' comprising financial assets, immovable properties, and a rental business.

The rationale for the scheme, as presented by the companies' boards, is that the two business verticals within ETP International have divergent profiles, growth potential, risk-reward dynamics, and capital requirements. The demerger is intended to enable greater management focus, operational efficiency, independent financing, reduced overheads, and enhanced shareholder value. The appointed date for the scheme is fixed as 01.10.2025.

The share exchange ratio, based on a valuation report dated 06.01.2026 by Registered Valuer Krishna Chaitanya Janga, is set as follows: For the amalgamation, shareholders of Microtech will receive 1,1742 equity shares of Rs. 10 each in ETP International for every 1 equity share of Rs. 10 held. For the demerger, shareholders of ETP International (Demerged Company) will receive 1 equity share of Rs. 10 each in ETP Solutions for every 3 equity shares of Rs. 10 held.

The Tribunal had previously, on 06.02.2026, dispensed with meetings of secured and unsecured creditors but directed meetings of equity shareholders. These meetings were held on 25.03.2026, where the scheme was approved by the requisite majority. The Regional Director, Western Region, filed a report on 11.05.2026 expressing no objections. The Official Liquidator also filed a report on 17.06.2026 stating that the affairs of the Transferor Company (Microtech) had not been conducted prejudicially to creditors or public interest. The Applicant Companies provided several undertakings in response to the RD's observations, including protecting creditor and employee interests, complying with accounting standards (AS-14/Ind AS-103), adhering to the MCA circular on appointed dates (dated 21.08.2019), and complying with directions from Income Tax and GST authorities.

Final Outcome

The NCLT sanctioned the Composite Scheme of Arrangement, declaring it binding on the applicant companies and their stakeholders. The Tribunal found the scheme fair, reasonable, not violative of any law, and not contrary to public policy. Key directions in the order include:

  • The dissolution of Microtech Software without winding up.
  • The transfer of all liabilities of the transferor company to the transferee company, though liabilities for offences by officers in default prior to the merger continue as per Section 240 of the Companies Act, 2013.
  • Creditors of the demerged undertaking can claim against both the resulting and demerged companies; the resulting company can seek reimbursement from the demerged company for any debts it pays.
  • The Income Tax Department is at liberty to examine and address any tax obligations arising from the scheme.
  • The companies must file a copy of the order and scheme with the Registrar of Companies in e-form INC-28 within 30 days.
  • The companies must file a copy with the Superintendent of Stamps for stamp duty adjudication within 60 days.

The petition was allowed and disposed of accordingly.

Topics: Corporate Restructuring, NCLT Approval, Scheme of Arrangement