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CS Executive · Company Law and Practice · Compromise, Arrangement and Amalgamations - Concepts

A scheme sanctioned for Mahanadi Foods Ltd cannot be implemented satisfactorily even with modifications, and the company cannot pay its debts as per the scheme. What may the Tribunal do under section 231?

The Tribunal may make a winding up order, which is deemed to be an order under section 273. This applies where the scheme cannot be implemented satisfactorily with or without modifications and the company is unable to pay its debts as per the scheme.

  1. AOrder winding up, deemed to be an order under section 273Correct
  2. BOrder the company to be dissolved without winding up
  3. CDirect the Registrar to strike off the company's name
  4. DCancel the scheme and restore creditors' original claims automatically

Explanation

Section 231(2) lets the Tribunal order winding up where the scheme cannot be implemented satisfactorily, with or without modifications, and the company cannot pay its debts as per the scheme. Such an order is deemed made under section 273. Striking off or automatic restoration is not provided there.

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