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

Gangotri Steels Ltd's board proposes to approach the Tribunal for sanction of a revival scheme and wants the sanctioned scheme to bind all creditors and shareholders under Section 263 and be implemented under Section 264. What does the official text say about these sections?

Both Section 263 (scheme to be binding) and Section 264 (implementation of scheme) have been omitted from the Companies Act, 2013 with effect from 15 November 2016, so the board cannot rely on either to bind stakeholders or implement a revival scheme.

  1. ABoth are in force but apply only to listed companies
  2. BSection 263 is in force; Section 264 is omitted
  3. CBoth Sections 263 and 264 are omitted w.e.f. 15-11-2016Correct
  4. DSection 263 is omitted, but Section 264 still applies

Explanation

The official text shows Section 263 (scheme to be binding) and Section 264 (implementation of scheme) both omitted by s. 255 and the Eleventh Schedule w.e.f. 15-11-2016. Neither provision can be relied on, so the board's plan has no basis in the Act.

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