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

In 2012, before the Companies Act, 2013 commenced, a court sanctioned a compromise for Rohini Pharma Ltd. Years later implementation falters. Which statement is correct?

Section 231 applies, so far as may be, even to a company whose compromise or arrangement was sanctioned before the 2013 Act commenced. Section 231(3) extends the supervision, direction and winding up provisions to such pre-commencement orders.

  1. ASection 231 cannot apply because the order predates the Act
  2. BSection 231 applies only if the company re-files the scheme under section 230
  3. CSection 231 applies only to the winding up provision, not supervision
  4. DSection 231 provisions apply, so far as may be, to such a company as wellCorrect

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. Hence supervision and directions are available, not just winding up.

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