Introduction to Prospect Legal

Prospect Legal is a trusted law firm with 15+ years of expertise in corporate litigation, mergers and acquisitions (M&A), and insolvency resolution. Our seasoned team of attorneys specializes in safeguarding business interests during M&A transactions by leveraging rigorous due diligence and strategic filings before the National Company Law Tribunal (NCLT). With a proven track record in resolving high-stakes disputes and securing approvals for complex mergers, we ensure compliance with the Companies Act, 2013, and protect clients from hidden liabilities, fraud, and regulatory non-compliance.

Where You Can Find Remedies?

M&A due diligence disputes are adjudicated by the NCLT under Sections 230-232 of the Companies Act, 2013, which govern schemes of arrangement, mergers, and amalgamations. Additional oversight may involve:

• Competition Commission of India (CCI): Reviews mergers for antitrust concerns under the Competition Act, 2002.
• SEBI (Securities and Exchange Board of India): Regulates mergers involving listed entities.

Uncovered red flags during due diligence? Contact Prospect Legal to file your case in NCLT and protect your transaction.

📞 Call us at 7000-12-7225

Understanding the Legal Process

Voluntary Process (Pre-Litigation Due Diligence):

1. Risk Identification: Uncover hidden liabilities (e.g., pending litigation, tax defaults).
2. Negotiation: Revise merger terms or indemnity clauses to address risks.
3. Approval Filings: Submit the revised scheme to NCLT for sanction.

Compulsory Process (NCLT Intervention):

1. File Application: Petition NCLT to halt or modify a merger due to material misrepresentation.
2. Tribunal Hearing: Present evidence of fraud, non-disclosure, or statutory breaches.
3. Remedial Orders: NCLT may cancel the merger, impose penalties, or mandate compensation.

Legal Protection Under Key Provisions

Section 230 of the Companies Act: Schemes of Arrangement

• When Can a Claim Be Filed?
  • If the merger scheme omits material facts (e.g., undisclosed liabilities).
  • When shareholders/creditors are misled during voting.
  • If the transaction violates public interest or statutory requirements.

Section 232 of the Companies Act: NCLT’s Remedial Powers

• Powers of the Adjudicating Authority (NCLT):
  • Modify or reject merger schemes lacking transparency.
  • Direct companies to compensate affected parties.
  • Order fresh valuations or audits to rectify discrepancies.

Process of Remedy Through Prospect Legal

Step 1: Initial Consultation & Case Assessment

• Due Diligence Audit: Review transaction documents, financial records, and contractual obligations.
• Risk Evaluation: Identify gaps in disclosures, tax liabilities, or pending litigations.
• Legal Grounds: Determine eligibility to challenge the merger under Section 230.
• Strategy Planning: Advise on litigation vs. renegotiation based on evidence strength.

Step 2: Legal Documentation & Filing

• Draft Petitions: Prepare NCLT applications citing material non-disclosures or fraud.
• Evidence Compilation: Gather audit reports, emails, and valuation discrepancies.
• NCLT Compliance: File Form NCLT-1 with annexures (e.g., shareholder objections).
• Jurisdiction: Submit to the NCLT bench where the target company is registered.

Step 3: Compliance & Negotiations

• Regulatory Liaison: Address CCI/SEBI queries related to revised merger terms.
• Stakeholder Mediation: Negotiate with opposing parties for settlements.
• Pre-Trial Hearings: Advocate for interim injunctions to halt the merger.
• Compliance Checks: Ensure adherence to NCLT directives and timelines.

Step 4: Resolution & Final Actions

• NCLT Advocacy: Argue for cancellation, compensation, or scheme modification.
• Enforcement: Ensure compliance with NCLT orders (e.g., asset restitution).
• Post-Judgment Support: Assist with renegotiating terms or alternative mergers.
• Appeals Management: Challenge adverse rulings in NCLAT under Section 421.

For expert legal representation, reach out to Prospect Legal now.
📞 Call us at 7000-12-7225