Petition to Sanction explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
After the meetings ordered by the Tribunal have approved a compromise or arrangement, the company petitions the Tribunal to sanction it. Form CAA.5 is that petition. This article gives a specimen in the form's structure, explains what must be shown about the meetings, and lists the supporting papers.
The petition sets out the object of the scheme, the company's incorporation, capital and objects, its business and financial position, the terms of the scheme, the Tribunal's order for meetings, the notices and advertisements, the meetings held and their result, the benefit to the company, and a prayer that the scheme be sanctioned as binding on the concerned classes and the company. Under section 230(6) the scheme binds the company and all the creditors or classes, members or classes only if a majority representing three-fourths in value of those voting agree and the Tribunal sanctions it by order. For a merger or amalgamation, section 232 applies and the Tribunal may make provision for the matters in section 232(3). The format follows the form as printed in the rules consulted; check the current form before filing.
When you need this petition
You need it after the meetings ordered under section 230(1) have been held and the chairperson has reported the result to the Tribunal. For a scheme involving a merger or amalgamation or a division, section 232 applies the meeting provisions of section 230(3) to (6) and requires the additional steps set out in section 232(2). Our section 232 guide, the section 230 compromise guide and the scheme approval process explain the sequence. For help preparing and presenting the petition, see our legal dispute resolution service.
Specimen petition
FORM NO. CAA.5
BEFORE THE NATIONAL COMPANY LAW TRIBUNAL, BENCH
COMPANY PETITION NO. OF
IN COMPANY APPLICATION NO. OF
IN THE MATTER OF THE COMPANIES ACT, 2013
AND
IN THE MATTER OF THE SCHEME OF BETWEEN AND
[(in liquidation, by its liquidator) if applicable] ...PETITIONER
PETITION TO SANCTION THE COMPROMISE OR ARRANGEMENT
The petition of , the Petitioner, is as follows:
1. The object of this petition is to obtain the sanction of the Tribunal to a compromise or arrangement whereby .
2. The Petitioner was incorporated on under , with CIN , with an authorised capital of divided into shares of each, of which shares have been issued and has been paid up on each share.
3. The objects for which the Petitioner was formed are set out in its Memorandum of Association. The principal objects are: .
4.
5. The compromise or arrangement is in the following terms: .
6. By an order dated in the above matter, the Tribunal directed the Petitioner to convene a meeting of the for the purpose of considering and, if thought fit, approving, with or without modification, the scheme, and appointed and, failing him / her, as chairperson of the meeting, to report the result to the Tribunal.
7. Notice of the meeting was sent individually to the as the order required, together with a copy of the scheme, the statement under section 230 and a form of proxy. The notice was advertised as directed in on . Notice was also sent to the Central Government and the authorities named in section 230(5), and ].
8. On , a meeting of the was held at , with as chairperson.
9. The chairperson has reported the result of the meeting to the Tribunal.
10. The meeting was attended by in person or by proxy voted by postal ballot], holding of the total value of , representing of the total value of the of the Petitioner. The scheme was read and explained by the chairperson and was resolved votes in favour against votes against] as follows:
""
11.
12.
13. The sanction of the scheme will be for the benefit of the Petitioner and .
14. .]
15. Notice of this petition ].
PRAYER
The Petitioner therefore prays that:
(1) the compromise or arrangement be sanctioned by the Tribunal so as to be binding on all the of the Petitioner and on the Petitioner;
(2) such other order be made as the Tribunal considers fit.
Verification and affidavit.
Petitioner:
Date: Place:
NOTES FOR THE AFFIDAVIT IN SUPPORT: It should verify the petition and prove matters not already proved by earlier affidavits, such as the advertisement, the holding of meetings, the posting of notices, copies of the scheme and the proxies, and should exhibit and verify the chairperson's report.Clause-by-clause explanation
| Paragraph | What it does | Drafting tip |
|---|---|---|
| 1 Object | States what the Tribunal is asked to sanction | Describe the scheme in one clear paragraph |
| 2-3 Incorporation, capital, objects | Identifies the company | Take figures from the incorporation documents |
| 4 Business and financial position | Explains why the scheme is needed | Use audited figures |
| 5 Terms | Sets out the scheme | Annex the full scheme |
| 6 Order for meetings | Records the Tribunal's directions | Quote date and chairperson |
| 7 Notices and advertisement | Proves compliance | Annex proofs |
| 8-10 Meetings and result | Shows the vote | State attendance, value and percentage |
| 11-12 Modifications and winding up | Covers special cases | Include only if applicable |
| 13 Benefit | Gives the case for sanction | Tie it to the interests of creditors and members |
| Prayer | Seeks sanction | Add section 232(3) provisions for mergers |
The law behind it
Section 230(6) says that if at a meeting held in pursuance of the Tribunal's order a majority of persons representing three-fourths in value of the creditors, or class of creditors, or members or class of members, as the case may be, voting in person, by proxy or by postal ballot, agree to any compromise or arrangement and the Tribunal sanctions it by order, it binds the company, all the creditors or class, or members or class and, in a winding up, the liquidator and contributories. Section 230(7) says the Tribunal's order shall provide for the matters it lists, which include conversion of preference shares into equity, protection of any class of creditors and an exit offer to dissenting shareholders where necessary, and states that no scheme is sanctioned unless the company's auditor has filed a certificate that the accounting treatment is in conformity with the accounting standards prescribed under section 133. Section 230(8) requires the order to be filed with the Registrar within thirty days of its receipt.
Section 232 applies where the scheme is for a merger or amalgamation: the Tribunal, after satisfying itself that the procedure in section 232(1) and (2) has been complied with, may sanction the scheme and make provision for the transfer of the undertaking, property and liabilities, allotment of shares, continuation of legal proceedings, dissolution of the transferor without winding up, provision for dissenting persons, transfer of employees and the other matters in section 232(3). The scheme must state an appointed date (section 232(6)). A certified copy of the order is filed with the Registrar within thirty days (section 232(5)), and the statement of compliance is filed yearly until completion (section 232(7)); see our Form CAA.8 article.
Check the current rules and form before filing.
Filing, stamp duty and execution
The petition is signed by the petitioner's authorised signatory and verified by an affidavit. Court fee is payable as per the applicable rules; no figure is stated here. The sanctioned scheme may carry stamp duty under the law of the State where the property is situated or the order is made; see our stamp duty overview. Annex the chairperson's report, proofs of notice and advertisement, the auditor's certificate and the scheme.
Common mistakes
- Filing before the chairperson's report is available.
- Giving a vague account of the vote without value or percentage.
- Leaving out proof of notice, advertisement and notice to the authorities.
- Not setting out modifications made at the meeting.
- Forgetting the auditor's certificate on accounting treatment.
- Describing the scheme loosely without the appointed date for a merger.
- Not stating whether the company is in winding up.
- Not filing the order with the Registrar within thirty days after sanction.
Need help with a scheme petition?
The sanction petition draws on every earlier step of the scheme. Our team can review the record, draft the petition and affidavit and appear before the Tribunal. See legal dispute resolution. For the later filing, read our Form CAA.8 statement format.
Key takeaways
- Form CAA.5 is the petition filed after the Tribunal-ordered meetings.
- Section 230(6) requires three-fourths in value and the Tribunal's sanction.
- Show notices, advertisements, attendance, value and percentage of the vote.
- For mergers, section 232(3) provisions are added.
- File the order with the Registrar within thirty days.
Read next
- Section 232: merger and amalgamation
- Compromise and arrangement under section 230: NCLT guide
- Scheme of arrangement: NCLT approval process
- Statement to the Registrar after a scheme (Form CAA.8)
Disclaimer: This specimen is a general model for information. Every document must be adapted to its facts and to the law, rules and forms in force when it is signed or filed; stamp duty, registration and court fees depend on the State and the forum. This article is general information, not legal advice; check the official text before acting.