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

In 2012, a Court sanctioned a compromise for Himalaya Steels Ltd under the earlier Companies Act. In 2026 the company faces trouble implementing it. Does section 231 apply to this older sanctioned compromise?

Yes. Section 231(3) says its provisions apply, so far as may be, also to a company in respect of which an order sanctioning a compromise or arrangement was made before the commencement of the 2013 Act, so supervision and directions are available.

  1. ANo, it applies only to orders made after the 2013 Act commenced
  2. BYes, its provisions also apply, so far as may be, to a company where an order sanctioning a compromise or arrangement was made before commencementCorrect
  3. CYes, but only the winding up part applies
  4. DNo, since the order was made by a Court and not a Tribunal

Explanation

Section 231(3) extends the section, so far as may be, to a company in respect of which a sanctioning order was made before the Act commenced. Limiting it to post-commencement orders contradicts this sub-section.

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