The National Company Law Tribunal (NCLT), Chennai Bench, has sanctioned the scheme of amalgamation between Encore I.T. Services Solutions Private Limited and Sonata Software Limited . The order, passed on June 5, 2026, confirms the appointed date for the amalgamation as April 1, 2024. The scheme aims to achieve operational efficiencies, streamline the corporate structure, and reduce administrative costs.

Scheme Details and Rationale

The amalgamation involves the transfer of the entire undertakings of Encore I.T. Services Solutions Private Limited, a wholly-owned subsidiary, to Sonata Software Limited. The rationale includes consolidating the business to manage operations as a single entity, reducing the multiplicity of legal and regulatory compliances, and rationalizing costs. The synergy created by the scheme is expected to increase operational efficiency and integrate business functions.

Statutory Approvals and Compliance

The scheme received necessary approvals from statutory authorities, including the Regional Director, Southern Region, and the Official Liquidator. The Income Tax Department had initially raised objections regarding tax arrears totaling ₹2,50,73,940 for the assessment years 2021-22, 2022-23, and 2024-25. However, the tribunal noted that the liabilities of the transferor company would devolve upon the transferee company, and the approval does not prejudice the department's rights to proceed with recovery.

Employee Protection and Undertakings

The tribunal directed that all employees of the transferor company in service immediately before the effective date shall become employees of the transferee company without interruption in service. Sonata Software Limited undertook that there would be no retrenchment of employees who were in service as on the appointed date, except in the event of resignation. The company also undertook to comply with the provisions of Section 240 and Section 232(3)(i) of the Companies Act, 2013, ensuring that liabilities for prior offences continue and that authorized capital fees are set off.

Financial and Operational Impact

Upon the scheme becoming effective, the equity shares held by Sonata Software Limited in Encore I.T. Services Solutions Private Limited will be cancelled without any consideration. The authorized share capital of the transferor company will be re-classified and combined with that of the transferee company. Each equity share of face value ₹100 of the transferor will be re-classified to 100 equity shares of face value ₹1 each of the transferee company. The transferor company will be dissolved without winding up upon the scheme's effectiveness.

The certified copy of the NCLT order is awaited, and the scheme will become effective upon filing with the Registrar of Companies.

Sonata Software has transferred unclaimed equity shares to the Investor Education and Protection Fund (IEPF) for the financial year 2018-19, as detailed in a newspaper advertisement published on June 3, 2026. The company confirmed that shares amounting to ₹26,65,473 were transferred to the IEPF Authority following the mandatory seven-year period of non-claim. This action was taken in accordance with Section 124(6) of the Companies Act, 2013, and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

The advertisement, published in the regional newspaper Navshakthi and the English daily Business Standard, serves as a public notice to shareholders. It informs investors that any shares or dividends unclaimed for seven years are eligible for transfer to the IEPF. Consequently, shareholders who failed to claim their assets within the stipulated period have forfeited their rights to these shares and dividends. The company has made the advertisement copies available on its website for investor reference.

Details of the Transfer

The transfer process involves shares that remained unclaimed despite the company's efforts to locate the rightful shareholders. The specific shares transferred pertain to the financial year 2018-19. The IEPF Authority, established under the provisions of the Companies Act, 2013, manages these funds to promote investor awareness and protection.

Shareholder Implications

Shareholders who believe their shares were transferred erroneously or who wish to claim refunds from the IEPF must submit their applications to the IEPF Authority. The company clarified that once shares are transferred to the fund, the original shareholders lose their claim unless they successfully apply for a refund through the established authority mechanism. The deadline for the final transfer was recorded as July 3, 2026, after which the company ceased to have liability regarding these specific shares.