Navigating Crossroads - Fast-Track Mergers And Green Channel Mechanism In India’s Corporate Landscape

Author: LawSphereX

Category: Corporate & Insolvency

Published: 2026-08-23T20:38:44.414337+00:00

Updated: 2026-08-26T17:10:23.327+00:00

NAVIGATING CROSSROADS: FAST-TRACK MERGERS

AND GREEN CHANNEL MECHANISM IN INDIA’S

CORPORATE LANDSCAPE

Preemal D'Souza, School of Law, CHRIST (Deemed to be University) Vaibhav Sanklecha, School of Law, CHRIST (Deemed to be University)

ABSTRACT

India’s corporate law regime is primarily backed by two legislations, The Companies Act, 2013 and the Competition Act, 2002. These two statutes regulate significant aspects of corporate and market governance, providing varied dimensions to this landscape, enabling the Indian jurisdiction to be at par with the other developed jurisdictions. The irony lies in the fact that, more often than not, these legislations are at crossroads with each other. Ultimately, leading to inefficiency. The Competition Commission of India and the National Company Law Tribunal continue the quest to supersede each other while often stepping into the jurisdiction granted to the other. The threshold fixed for merger control under the legislations need more accuracy for a party ambitious to engage in corporate transactions; such areas of conflict and contrast amongst the legislations have often been highlighted.

The authors herein shed light on ‘fast-track mergers’ and ‘green channel’, a relatively nascent and unique mechanism which is incorporated under both these legislations in a way that creates confusion and chaos amongst the participants of transactions, as the idea behind the two remains one and the same. These legislations aim to eliminate procedural delays and bureaucratcreated difficulties inherent in the legal system. However, the intention behind incorporating them differently under two legislations persists. The nature of the provisions is aimed at implementing mergers and acquisitions or other combinations that continue to maintain the economy’s competitiveness. The authors attempt to bring out the conflict and contrast between the ‘similar but different’ provisions existent under the legislations.

Towards the end of the paper, the authors suggest a middle-ground that may be implemented moving forward with the intention of reducing the inefficiency created by the overlap. Keywords: Economic competitiveness; jurisdictional challenges; merger controls; and procedural delays

I.

Introduction The corporate landscape in India is undergoing tremendous growth, including increased entry of MNCs and a booming start-up culture. In order to foster this growth, there arises a dire need for legislations to adapt to the current needs of the space. The same is reflected through the enactment of laws such as the Companies Act, 2013, the Competition Act, 2002 and their frequent amendments. This article delves into the overlap of two distinct avenues: fast-track mergers and green channel, both provisions enacted to ensure Ease of Doing Business in India. However, they are often found at a crossroads, raising questions about their coexistence, comparability and potential harmonization.

Throughout this article, the authors provide a background and real-life application of the two provisions, further pointing out the law's drawbacks and loopholes that interfere with these provisions' legislative intent. Following this, the authors navigate through the conflicts and potential synergies between the two mechanisms in India's corporate ecosystem. The authors have divided the paper into the following sections: (i) Fast-track mergers; (ii) Green channel scheme; (iii) Conflict between the mechanisms; and (iv) Suggestions and Conclusion.

II. Fast-Track Mergers

Owing to India’s booming economy, the corporate landscape has undergone various changes, including a surge in startup companies, and increased available capital. The same has led companies to witness tremendous organic growth. Additionally, of late, increased emphasis has been on inorganic growth strategies, including mergers and acquisitions (hereinafter referred to as the “M&A”). Companies undergo mergers and acquire other companies as it provides them with an increased workforce, fosters product diversification, helps in gaining additional prevalence in the market and access new markets. All in all, growth expediates, leading to higher revenue and profit generation. Thus, making M&A a widely sought-after business strategy. Mergers are the unification of two or more players into a single entity.

1 Provisions for mergers and amalgamation of companies have been provided under Sections 230 to 2402 of The 1 Ministry of Corporate Affairs, Report of the Expert Committee on Company Law – Mergers & Acquisitions

2 Companies Act, 2013, secs. 230-240 [Companies Act]

Companies Act, 2013 (hereinafter referred to as the “Act of 2013”). The Act of 2013 replaced The Companies Act, 1956 (hereinafter referred to as the “Act of 1956”), which stipulated provisions for mergers and amalgamations under Sections 391-3943. However, the procedure laid down by the Act of 1956 was cumbersome, including complex regulatory requirements and time-consuming procedures without taking into account the company’s size, net worth, or turnover. 4 Ultimately, defeating the very purpose of a merger and reducing the Ease of Doing Business. In order to attract and retain businesses, a crucial need for change arose. Thus, the Act of 2013 was brought in and tailored to the corporate landscape’s current needs. Section 2335 of the Act of 2013 provides for fast-track or short-form mergers (hereinafter referred to as “FTM”).

M&A often goes through various levels of statutory regulations, which require large amounts of resources. However, these resources are not readily available to small companies, making mergers challenging. Thus, Section 233 is incorporated to provide an alternative route to specific classes of businesses. This provision allows companies to merge without undergoing the tedious process of gaining the approval of the National Company Law Tribunal (hereinafter referred to as the “NCLT”), hence fostering a cost-effective and timely merger. 6 Initially, mergers between a holding company and its wholly-owned subsidiary and mergers between small companies as defined under Section 2(85)7 of the Act of 2013 were permitted. Subsequently, through a notification on 1st February 2021 in the Official Gazette, startup companies were also eligible for FTMs.

8 FTMs were introduced to bring about a smooth and resource-effective merging process. The main target is to facilitate the business growth of parties with scarce resources who ordinarily could not afford to undergo a merging process like large firms. However, the provisions of the Act of 2013 provide for alternative procedural hurdles which defeat the very purpose of the provision. One such drawback is a procedural flaw, which requires shareholders holding up to 90% of the total share capital to provide ascent. Here, it is essential to note that the approval

3 ibid, secs. 391-394

4 Diksha Jain, ‘Mergers & Acquisitions under the Companies At, 2013: A Critical Analysis’ (SCC OnLine, September 2018) accessed on 7 January 2024

5 ibid, sec. 233 [Companies Act]

6 Bathiya & Associates LLP Chartered Accountants, ‘Mergers And Acquisitions – Companies Act Framework And Broad Process’ (Insights, 3 June 2022) accessed on 2 January 2023

7 ibid, sec. 2(85) [Companies Act]

8 Ravi Shah, Devanshi Dalal & Dhwani Shah, ‘Mergers on a Fast-Track’ (Cyril Amarchand - Mangaldas India Corporate Law, 26 June 2023) accessed on 12 December 2023

required is at least 90% of the total shareholders and not limited to the shareholders present at the meeting. The same makes mergers of listed companies nearly impossible owing to the large number of shareholders. Additionally, convening such a large-scale meeting requires resources like money and time, leading to disincentivising interested parties. Contrary to this, reducing the percentage of shareholder approval required and providing exceptions for approval to parent companies and their wholly-owned subsidiaries can help bridge the shortcoming. A similar drawback that stands out is obtaining the approval of 9/10th of the creditors by value.

The same can be done by organising a meeting with all the creditors or obtaining their approval through rapid post. Both require tremendous resources, which may delay the merging process. Moreover, startups tend to have many creditors; thus, meeting this requirement becomes tedious, and companies would instead take the NCLT route. Further, other compliances, like considering the suggestions and, if deemed necessary, the objections of the Registrar of Companies (hereinafter referred to as “ROC”) and the Official Liquidator (hereinafter referred to as “OL”), also come into play. 9 Thus, after a large-scale meeting with all the shareholders and creditors, the ROC or OL may reject the FTM and be referred to the ordinary NCLT procedure, making the FTM counterproductive.

The legislative intention behind including fast-track mergers is to ensure that the timelines of merger approval are expedited and that the parties involved in the merger are in a position to commence their business post the transaction at a rapid pace, which continues to be beneficial for the economy. However, the purpose of the law was not achieved due to the absence of fixed timelines that would compel the Regional Director (hereinafter referred to as the “RD”) to pass the confirmation order since that would lead to substantial delays in certain jurisdictions. As a result, the caseload increased, and the benefits of the fast-track merger procedure stood vitiated.

To resolve this, the Ministry of Corporate Affairs introduced a time-bound approval mechanism and a deemed approval concept by amending Rules 25(5)10 and 25(6)11 of the Companies (Compromise, Arrangements and Amalgamation) Rules, 2016 (hereinafter referred 9 Abhinav Shrivastava, ‘Unleashing Growth: Exploring the Benefits of Fast-Track Mergers in light of Recent Amendment by MCA’ (GSL Chambers, 21 June 2023) accessed on 6 January 2024

10 Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, rul. 25(5) [Companies

Regulations, 2016]

11 ibid, rul. 25(6)

to as the “Amendment Rules”), vide notification dated 15th May 2023. 12 The Amendment Rules introduced definite statutory timelines to ensure that the actions taken by the RD fulfil the purpose behind such a mechanism, which includes either issuing a confirmation order or filing an application with the NCLT. 13 The timelines introduced via the notification enable the scheme’s deemed approval to justify the provision’s title, ‘fast-track mergers’. These timelines ensure that merely because the ROC or OL fail to issue objections or suggestions for the scheme of merger and amalgamation, the scheme does not remain unaddressed, and the cost of the parties involved does not increase. The amendment highlights the importance of following strict timelines for the provision’s success and it’s contribution to the country’s corporate landscape.

In situations wherein the RD fails to pass any order or file an application before the NCLT until a fixed period, the scheme is deemed to be approved. This deemed approval system adds another dimension to the merger control regime wherein the parties are in a much-improved position as compared to when they were awaiting the approval of the RD. Thus, the Amendment Rules facilitate a business-friendly environment, which builds up the investors’ confidence in the process.

III. Green Channel Mechanism

The Ministry of Corporate Affairs (hereinafter referred to as the “MCA”) of the Government of India appointed a Competition Law Review Committee (hereinafter referred to as the “Review Committee”) that published a report14 in July 2019 recommending far-reaching amendments in the Competition Act, 200215 (hereinafter referred to as the “Act of 2002”). These amendments were proposed with the intention of aligning the antitrust regime in the country to the new-age global landscape and reducing the time and costs for enforcing various combinations that have no appreciable adverse effect on the competition (hereinafter referred to as the “AAEC”) in India.

One of the most significant proposals made by the Review 12 Ravi Shah, Devanshi Dalal & Dhwani Shah, ‘Mergers on a Fast-Track’ (Cyril Amarchand - Mangaldas India Corporate Law, 26 June 2023) accessed on 12 December 2023; Majmudar & Partners, ‘Company Law Update: Fats Track Mergers now have a Definite Timeline (Majmudar & Partners, International Lawyers, India, June 2023) accessed on 3 January

13 Mahendra Singh, Tanvi Goyal & Aditi Ladha, ‘Fast-Track Merger made faster| MCA amends M&A Rules’

(Economic Laws Practice 15 May 2023) accessed on 7 January 2024

14 Ministry of Corporate Affairs, Report of Competition Law Review Committee (2019)

15 Competition Act, 2002 [Competition Act]

Committee was the introduction of the green channel route for the combinations that do not have an AAEC in India. This route enables the enforcement of a vast majority of mergers and acquisitions that have no competitive concerns but due to the procedural constraints may be delayed. The green channel route/scheme was introduced by the Competition Commission of India (hereinafter referred to as the “CCI/Commission”) vide a notification dated 13th August, 2019 (hereinafter referred to as the “Amendment”). The CCI amended the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 201116 (hereinafter referred to as the “Regulations of 2011”).

The notification inserted Regulation 5A17 (hereinafter alternatively referred to as the “said regulation”) which provides for the filing of a notice of the combination for approval under the green channel. The said regulation read with Schedule III18 appended to the Regulations of

2011 stipulates the green channel route and the combinations capable of being approved

thereunder. Form I, as amended by the notification of the CCI, prescribes the nature of the notice required to be given by the parties as provided under the said regulation. The combinations that are eligible to be approved under the green channel have been provided under the Schedule III. Schedule III prohibits the horizontal, vertical and complementarity overlap between the parties to a combination. The overlap restriction extends not only to the parties but also to their respective group entities and/or any other entity in which they, directly or indirectly hold shares and/or control. Additionally, all the plausible market definitions are required to be taken into consideration.

The parties to the combination are required to submit a declaration that has been provided under Schedule IV19 of the Regulations of 2011 wherein the parties affirm that no horizontal, vertical or complementarity overlap exists between the parties, their respective entities and or any entity in which they, directly or indirectly hold shares and/or control. The parties confirm that the information and documents provided by them are in accordance to the specifications laid down under Form I. In addition to this, the parties confirm that the information so disclosed is not false and no material information remains undisclosed. 16 Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 [CCI Regulations, 2011]

17 ibid reg. 5A

18 ibid sch. III [CCI Regulations, 2011]

19 ibid sch. IV [CCI Regulations, 2011]

The CCI issued Revised Guidance Notes20 (hereinafter referred to as the “Guidance Note/Note”), which were comprehensive and clarified the amendments brought to Form I. These Notes aligned with the amended form and facilitated the parties for filing the notice before the CCI. In furtherance of such intentions, the Note clarifies the contours that need to be considered while evaluating the overlaps amongst the respective entities of the parties to the combination. The entities in which the parties either directly or indirectly have a shareholding of 10% or more; or a right or ability to exercise any right that is not available to an ordinary shareholder; or a right or ability to nominate a director or observer are the only entities that have be considered during the self-assessment.

21 The green channel scheme requires the parties to the combination to engage in self-assessment to evaluate whether there exists a potential horizontal, vertical or complementarity overlap between not only the parties themselves but also their group entities or any other entity in which the parties directly or indirectly have a shareholding and/or control. The parties need to ensure that the self-assessment is completed in the most diligent manner because that entails the possible impact on the competition in the country along with the absence of any overlap. The potential of the combination being approved or not hinges completely on this assessment undertaken by the parties prior to giving a notice to the CCI in the prescribed Form I.

The assessment, thus, forms the most crucial part of the mechanism since based on this the parties additionally give the self-declaration as prescribed under Schedule IV that confirms the information provided under Form I as true and inclusive of material details. The combinations under this mechanism receive the ‘automatic’ approval of the CCI upon filing and this eliminates the mandatory 30-day waiting period (Phase I of the review process) as prescribed in case of the other combinations. The presence of the standstill obligations that extends for

210 days and encompasses Phase II of the review process undertaken by the CCI is required

only in case of combinations filed otherwise than under the green channel mechanism.22 The green channel scheme is in line with the Governmental policy of Ease of Doing Business

20 Competition Commission of India Press Release, ‘Notes to Form I’ (27 March 2020)

accessed on 27 December 2023 21 Rahul Goel & Ankush Walia, ‘CCI revises guidance note for merger control notifications’ (Infolex, 2 April 2020) accessed on 24 December 2023 Rahul Rai, ‘Merger control in India: Overview’

(AZB

& Partners, March 2019) accessed on 5 January 2024

and it in any possible way does not compromise with the CCI’s current mandate for merger regulation. The main purpose of introducing this special channel is to enable the combinations having no competitive concerns to be given effect to at an increased pace than the usual mergers that often get delayed due to the procedural constraints. The parties are required to provide a comprehensive disclosure of all the information related to the combination as well as their group entities and the entities in which they direct or indirect shareholding and control. Form I consists of eight parts and a declaration at the end which confirms the information thus

disclosed above is in accordance with the specifications laid down in the regulations. Due to the requirement of such detailed information, the parties generally spend few months in gathering the information and accurately filling the same which makes the process cumbersome. The main idea of reducing the time taken for a combination to come into force stands vitiated when such extensive disclosure is required because although the approval is automated and takes comparatively lesser time, the prior self-assessment takes up the additional time that was supposedly ‘saved’ through accessing the green channel scheme. The in-depth merger control analysis that the parties may have to undertake themselves can serve as a deterrent and the parties may just prefer the proceedings with the ordinary route for seeking the approval.

Another area under this mechanism which casts a shadow on its efficiency is with respect to the requirement that prescribes the absence of overlaps even amongst those entities in which the parties to the combination have direct or indirect shareholding and control. The parties have an additional burden to deal with under the new mechanism which in a way goes against the Governmental policy of Ease of Doing Business. The Notes dated 27th March 2020 published by the CCI further clarify the entities that need to be considered for this purpose. However, the fundamental issue of including the investee entities remains unresolved and in reality, the green channel mechanism, does not address the unnecessary delay caused due to the procedural requirements.

The first-time investors might not have a major issue with a requirement of this sort but this requirement discourages the venture capitalists, private equity firms and other types of financial investors from opting the green channel route because they would have to carefully examine their portfolio which would be a very tedious process in itself. As a consequence, these investors would continue getting their combinations approved under the ordinary route despite the delays since the former route puts additional constraints on them. The inclusion of the investee entities of the parties’ group is yet another limitation imposed upon them since even indirect investments are required to be considered for evaluating the

presence of overlaps. The investors would prefer sending a notification to the CCI under the ordinary route and abide by the standstill obligations as this would serve the twin purpose of: avoiding the time-consuming and expensive analysis as required under the green channel; and eliminating the risk of being penalized by the CCI in situations where the Commission after consummation of the transaction imposes penalties under the requisite sections of the Act of

2002 due to the presence of overlaps.

The Notes published in 2020 seek to clarify the meaning of the term ‘control’ that has been included in the Schedule III appended to the Regulations of 2011 that is, it refers to the right or ability to exercise any right that is not available to an ordinary shareholder; or a right or ability to nominate a director or observer. The definition of control according to the Competition (Amendment) Act, 202323 (hereinafter referred to as the “Amendment Act of 2023”) which came into effect in May 2023 is, “the ability to exercise material influence over the management, affairs, or strategic commercial decisions. ” The CCI devised the concept of material influence in the UltraTech-JAL24 case.

The Commission defined material influence as “the lowest level of control, implies presence of factors which give an enterprise ability to influence affairs and management of the other enterprise including factors such as shareholding, special rights, status and expertise of an enterprise or person, Board representation, structural/financial arrangements etc. ,. ” The definition of control as provided in the Notes is uncertain and inconsistent with the new definition incorporated in the Act of

2002 by the Amendment Act of 2023. The definition fails to incorporate the elements of ability

to influence the commercial decisions, financial arrangements, etc.,. It applies in many situations wherein the party merely invests in another company and may be given the right to nominate a director. However, this does not imply that the party has the ability to influence the commercial, financial, and structural decisions of the investee entity. With respect to the green channel, the definition should have been more inclusive of abilities that influence the business decisions of the investee which ranges from nature of the products/services offered to the markets being targeted by such an entity. The first proviso to Regulation 5A25 states that the CCI has the power to impose penalties in situations wherein the Commission is of the opinion that combination does not fall under

23 Competition (Amendment) Act, 2023

24 UltraTech-JAL (Combination Registration No. C-2015/02/246) 12.10, 2018

25 ibid, reg. 5A [CCI Regulations, 2011]

Schedule III and the self-declaration filed by the parties is incorrect. The implication of this finding of the CCI is that the notice given and approval granted under this regulation becomes void ab initio and the penalties may be imposed according to the other provisions of the Act of

2002. The parties after filing the notice in Form I received an automatic approval for their

combination and therefore, in all ideal circumstances would go on to consummate the transaction. However, the CCI starts investigating post such consummation and then imposes penalty on the parties for consummating the transaction which happens to be the next step after receiving the automated approval from the CCI. The CCI imposes a penalty for the offence of gun-jumping in accordance with Sections 43A26 and 4427 of the Act of 2002. This imposition of penalty is unfair for the parties as such because the parties consummated the transaction only after receiving the automated approval.

If the CCI chooses to investigate after granting such an approval and expects the parties to not consummate the transaction, then there would be no elimination of the standstill obligations as such since the parties under this situation continue to wait for any further orders of the CCI for an indefinite period. In a recent order dated 18th August 2023, the Commission imposed a penalty of ₹55,00,000/- against Platinum Trust for consummation of the transaction before the approval of the CCI. In this case, the parties had opted for the green channel route and notified the CCI of the combination post which the combination received the automated approval. The parties consummated the transaction in February 2023 and the CCI passed its first order in May 2023.

The problem that arises in such situations is that the entire purpose of having the green channel mechanism ceases to exist because if the CCI can investigate the combination post approval and impose such high penalties then the parties may start preferring the ordinary route wherein the considerably reduce the risk of paying a hefty penalty. The concern is more with the onerous penalty imposed upon the parties than the assessment mechanism itself because in such situations the parties have not committed the offence of gun-jumping in its true sense. The transaction has been consummated only post the automated approval by the CCI and the parties have followed the due procedure as provided under the Regulations of 2011.

The penalty imposed in such a situation is not proportionate to the ‘offence’ since such type of a penalty is imposed wherein the parties have been completely ignorant of the provisions of the Act of 2002 and consummated the transaction in contravention of the provisions included therein. Additionally, the assessment mechanism can be availed by the CCI at any point of time after

26 ibid, sec. 43A [Competition Act]

27 ibid, sec. 44 [Competition Act]

automated approval has been granted since the regulations remain silent on this aspect. Therefore, the assessment mechanism of the CCI remains unfettered with any restrictions and as such deters the parties from availing the green channel since the parties will always remain under the presumption that at any given time their transaction can be declared void ab initio and they may be subject to pay an arduous fine. The green channel mechanism is the first of its kind and has the potential of changing the competitive landscape of the country for the better. The CCI has attempted to provide a new dimension to the antitrust regime in the country. The Amendment seeks to improvise the merger control regulation in the country that enables the approval of combinations which would supplement the competition rather than adversely affecting it.

However, the green channel scheme is in its nascent stage and requires developments that may possibly further justify the intentions behind its introduction in the first place and achieve the objectives highlighted by the CCI at the time of its insertion in the Regulations of 2011. The CCI ought to address the significant loopholes implicit in such a mechanism as pointed out by the author. Such redressal may have the possibility of reshaping the antitrust regime in a way that no other jurisdiction has ever witnessed.

IV. Conflict Between The Mechanisms

The foregoing sections highlighted the major drawbacks inherent in the FTM and green channel mechanisms. The intention behind the introduction of either of the mechanisms has not been justified in the way the provisions have been framed and interpreted since the time of their enforcement. While the green channel scheme focuses mainly on the competitive impact of the combination, the FTM stresses on the agreement of the creditors and shareholders of the participants to enforce the transaction in the market. The mainstay feature of the green channel is the existence of potential overlaps between the parties and their respective relative entities. On the other hand, the legislators make a conscious effort to make the expedited timelines and deemed approval system as the main features of the fast-track mergers.

However, both the schemes fail to serve the purpose implicit behind their introduction that is, ensuring the mechanisms that aid the economy to be implemented at a rapid pace rather than being lost behind the veil of bureaucracy and procedural constraints. Mergers and acquisitions form a pertinent part of the corporate landscape across the world and they are characterized by complex considerations and transactions which more often than not

involves a change in the competitive behavior of the economy. The main idea behind the merger control in any jurisdiction remains the avoidance of any negative impact on the competition in the market. In reality, the achievement of this goal is not as simple as the sentence reads. The merger control regime is complex because of various factors that need to be considered as witnessed from the global experience of the European Union or Brazil or the US. Other jurisdictions’ legislators have attempted to simplify this complex phenomenon to the grassroot level since most of the participants are often discouraged due to the complicated procedure included in the antitrust laws. There is a principal merger control legislation in such jurisdictions which cover the entire canvas of preventing any anti-competitive behavior in the economy.

In India, the Act of 2002 and the Act of 2013 govern the entire field of mergers/acquisitions, amalgamations, or other combinations. The Act of 2013 remains the general legislation which deals with many other crucial elements related to the governing of any company. However, the Act of 2002 is specifically focused on the goal of ensuring no anti-competitive behavior is encouraged in the economy. This legislation occupied the field of merger control before the Act of 2013 since it was enacted prior to the latter. The Act of 2002 is considered as one of few progressive legislations of the country that keeps on evolving and adapts to the needs of the global markets with the intention of aligning itself with the domestic and more so the global corporate landscape. The Act of 2013 attempts to enter a field occupied by another special legislations for nearly a decade before its enactment.

The authors contend that the provision of mergers could have been ignored from the perspective of this legislation considering the fact that the Act of 2002 had been dynamic and successful in incorporating the ever-evolving dimensions of the corporate transactions. The concept of FTM existed before the green channel mechanism came to the fore, that is, since the time of enactment of the Act of 2013. The need of inserting the green channel mechanism in this situation is more justified than in the prior situation where the merger control was incorporated in 2013 when the Act of 2002 already covered that aspect of corporate law. The FTM continue to remain dominant and applicable to the extent of whether the approval was taken while having the shareholders and creditors on board or not.

However, it fails to incorporate the true essence of merger control which remains to prevent any anti-competitive behavior. Therefore, the Regulations of 2011 had to be amended to include the green channel mechanism which acts as a recourse available to companies such as those which engage in combinations that do not affect the competition negatively rather supplement the competitive nature of the market. On a comparative basis, the

first instance is much more suitable evidence of overlapping of jurisdictions covered by the legislations than the second instance where there is no overlap as such but it leads to a conundrum for the parties. The legislations fail to specify the situations in which either of them would be applicable and that is main area of concern. Both the legislations cover contrasting yet important aspects of the merger-control regime and approaching either of legislations implies that another important element of the regime has been ignored by the parties. As a result, the transaction might seem eligible for approval under one of the legislations but it may not be in favor of public interest in reality because it’s eligibility under the other important aspect remains unquestioned. Both the schemes focus on particular aspects of the transactions but do not address them holistically.

The FTM and green channel mechanism require the fulfilment of certain elements and they are very distinct in nature when compared to each other. While the former focuses on how the parties reach to the point of sending the scheme to the RD, the latter is more so interested in the investee entities of the parties and whether there exists any possible overlap that would negatively impact the competition in the plausible alternative market definitions. A party planning to engage in a corporate transaction may face difficulty in assessing which conditions have to be followed since there is no clear demarcation between the applicability of either of the legislations in certain situations. The mechanisms adopt such different approaches to increase the pace of implementation of mergers.

The fast-track mergers’ provision specifies the combinations in which it would be applicable and these combinations are determined on the basis of size of the company whereas the green channel nowhere addresses the size of the company and merely focuses on whether the parties and their respective entities have a potential overlap or not. The former is more sensitive to the interest of the shareholders and creditors however fails to give the due importance to consider the post-merger impact on the market while the latter assumes the co-operation of the internal and external stakeholders and stresses mainly on the effects of the combination on the market. The concept of deemed approval after the expiry of a fixed period is unique to the former whereas that of automated approval at the time of sending the notice to the latter.

Accordingly, the timeframe for the approval differs between both the schemes. Therefore, the authors after undertaking a comprehensive analysis attempt to point at the conundrum created by the legislation and more importantly, the conflict existent between the

legislations due to which the purpose is not served fully. The authors contend that the FTM ceases to be an effective method for merger-control since it remains heavily focused on the internal approval of the merger rather than focusing on how the market would be impacted in a situation the merger came into effect. The RD has he power to assess whether the scheme is in public interest or not. However, this provision may be difficult to translate into action because the RD may not have enough information about the nature of the market to understand the possible impact on it.

On the other hand, the authors remain skeptical about the feasibility of availing the green channel mechanism too since it involves the risk of high penalty and the combination may come under the scrutiny of the Commission at any point of time after consummation because the provision remains silent on a limitation period granting unfettered power to the CCI. Thus, the authors in the last section of the paper suggest an alternative method that could in their opinion fulfill the intention behind the legislations in a much better way.

V. Suggestions And Conclusions

The previous sections show the nature of drawbacks inherent in the schemes individually and additionally, the conflict between the legislations and the conundrum created as a result of these conflicts. In this last section, the authors aim to highlight another alternate mechanism that can be incorporated in the legislation with an intention of curbing the conflict and the resulting conundrum. The authors believe that there is no drastic need that would justify the incorporation of the merger control in the Act of 2013 which otherwise focuses mainly on the administration of the company and governs the various dimensions of the company law. Hence, the mechanism suggested by them in an ideal scenario is a part of the Act of 2002 since the act is specifically framed for corporate transactions of such nature as it incorporates the other crucial aspects of the control.

The legislators may look at the green channel mechanism as their ‘go to’ scheme since it covers one comprehensive basis of the market analysis. An amendment to Form I can be made due to which another part is added to it that is, the ‘IX Part’ which stresses on ensuring the internal and external users are in agreement with the scheme but this requirement should be 90% and 9/10th respectively. It may be somewhere in the range of half to three-fourth of both users since that seems more achievable in ordinary circumstances. A limitation period can be fixed at 1 year beyond which the CCI may not have the power to assess the merger but any instance of abuse of power by the company so formed after the combinations may be reported to the Commission. Additionally, the RD, ROC or OL may not

be granted the power to assess the combination since that may lead to overstepping of jurisdiction specifically granted to the CCI. Lastly, the definition of control as mentioned in the Notes published in 2020 may be amended in accordance with the definition of control inserted by the Amendment Act of 2023 to ensure that not every investee entity has to be analyzed to avoid potential overlaps. Considering the dynamic nature of M&A transactions, it would not be a surprise if it develops new facets for the next few years which may compel to legislators to examine the current legislation again. The authors firmly believe that cognizance of the aforementioned schemes needs to be taken by the legislators to ensure that the benefits of the schemes are not counteracted.

The CCI may ensure that the framework of merger control continues to remain solid by aiming to negate the loopholes that hinder the growth of the regime.