NCLT Mumbai Approves Arrka Infosec-Persistent Systems Merger, Says Scheme Fair, Not Against Public Policy

The Mumbai Bench of the National Company Law Tribunal has approved the amalgamation of Arrka Infosec Private Limited, an information technology and IT-enabled services company, with Persistent Systems Limited, a listed technology company. The tribunal observed that the scheme “appears to be fair and reasonable” and is “not contrary to public policy.”

The order was passed by a bench of Judicial Member Prabhat Kumar and Technical Member Sushil Mahadeorao Kochey. As a result, Arrka Infosec, a wholly owned subsidiary of Persistent Systems, will stand dissolved without undergoing winding up.

The companies told the tribunal that the merger was intended to simplify the group's corporate structure. They said it would eliminate duplication in procedures and compliance, consolidate operations, and create administrative and managerial synergies.

The Regional Director, Western Region, Mumbai, raised certain compliance-related observations during the proceedings. In response, the companies gave undertakings on accounting standards, SEBI requirements, Companies Act compliance, and applicable tax laws.

The tribunal noted that no objections were received from any other statutory or regulatory authority, creditors, members, or other stakeholders. The Income Tax Department had initially raised certain observations, but later stated it had no objection provided its rights to proceed under tax law were preserved. The tribunal also recorded that all requisite statutory compliances had been fulfilled.

It also took note of the Official Liquidator's report dated January 8, 2026, which stated that the affairs of the transferor company had not been conducted in a manner prejudicial to the interests of creditors or to public interest.

The tribunal clarified that all liabilities of the transferor company would stand transferred to the transferee company. It added that liabilities arising from offences committed under the Companies Act by officers in default of the transferor company before the merger would continue under Section 240 of the Companies Act, 2013.

The tribunal further directed that all employees of Arrka Infosec who were in service immediately before the scheme takes effect would continue as employees of Persistent Systems without any break or interruption in service. Their terms and conditions cannot be less favourable than those in force before the amalgamation.