The General Rule
The NCLT bench that has territorial jurisdiction over the company’s registered office hears the company’s scheme petition. In a scheme involving a transferor and a transferee registered in different states, the transferor company’s bench ordinarily hears the petition, because the transferor is the company whose assets and liabilities are being transferred. The transferee company may file a separate petition or an application for confirmation in its own bench.
The Transferor’s Bench as the Lead Bench
The practice that has emerged is that the transferor company’s bench is the lead bench, and the transferee company’s bench passes a consequential order. The lead bench conducts the convening of meetings, the scrutiny of the scheme, and the final sanction. The transferee bench’s order is necessary to give effect to the scheme in the transferee’s state.
The Section 419(3) Transfer
If the scheme is pending before a bench that does not have jurisdiction over the transferor, the President of the NCLT may transfer the case to the correct bench under Section 419(3). A party that objects to the bench’s jurisdiction should raise the objection at the earliest opportunity, because a belated objection may be treated as a waiver.
The Stamp Duty Consequence
The choice of bench can affect the stamp duty on the scheme order. The stamp duty is determined by the state in which the order is stamped, and the rates vary. The company should model the stamp duty in each relevant state before filing the scheme, because the bench selection may have a significant cost consequence.
The Practical Coordination
The company should file the scheme before the transferor’s bench, obtain the certified copy of the order, and then file it before the transferee’s bench for the consequential order. The two benches should be informed of each other’s proceedings to avoid conflicting directions.
Call to Action: For multi-state scheme bench selection, transferor–transferee coordination, or stamp duty modelling, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.