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CS Professional · Corporate Restructuring, Valuation and Insolvency · Regulatory Approvals of Scheme

Ganga Cement Ltd had a compromise sanctioned by a court order passed before the Companies Act, 2013 commenced. Its implementation is now faltering. Can the Tribunal use section 231 powers?

Yes. Section 231(3) extends the section, so far as may be, to companies whose compromise or arrangement was sanctioned by order before the Companies Act, 2013 commenced. The Tribunal can therefore supervise and give directions for such older schemes too.

  1. AYes, section 231 applies so far as may be to such pre-commencement sanctioned compromises or arrangementsCorrect
  2. BNo, section 231 applies only to schemes sanctioned after commencement
  3. CYes, but only the winding-up power and not supervision
  4. DNo, such schemes can be enforced only by the Registrar

Explanation

Section 231(3) says the section applies, so far as may be, to a company in respect of which an order sanctioning a compromise or arrangement was made before commencement of the Act. So supervision and directions are available, not just winding up.

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