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CS Professional · Drafting, Pleadings and Appearances · Applications, Petitions and Appeals under Companies Act, 2013

Himalaya Foods Pvt Ltd drafts an application seeking the Tribunal's approval for a matter. The draft prays that the approval be granted 'without any conditions whatsoever'. The company's counsel advises that the prayer should recognise the Tribunal's power under the Act. Which statement correctly reflects that power?

The Tribunal may grant approval, sanction, consent, direction or exemption subject to such conditions, limitations or restrictions as it thinks fit, unless a provision says otherwise. It may also withdraw the relief if a condition is contravened, so a drafter should not assume unconditional relief.

  1. AThe Tribunal must grant approval exactly as prayed and cannot attach conditions
  2. BThe Tribunal may grant approval subject to such conditions, limitations or restrictions as it thinks fit, unless the provision says otherwiseCorrect
  3. CThe Tribunal may impose conditions only for exemptions, not for approvals or directions
  4. DThe Tribunal may impose conditions but cannot withdraw the approval even if they are breached

Explanation

Section 459(1) lets the Central Government or Tribunal accord approval, sanction, consent, confirmation, recognition, direction or exemption subject to conditions it thinks fit, absent contrary provision. It may also rescind or withdraw the approval on contravention of a condition. So a prayer demanding unconditional approval ignores this power, and the other options misstate its scope.

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