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

In the winding up by the Tribunal of Kaveri Agro Ltd, a contributory objects to a compromise the Company Liquidator proposes under Section 343. Which course matches the official text?

The contributory may apply to the Tribunal. Under Section 343(3), any creditor or contributory can challenge an exercise or proposed exercise of the liquidator's powers, and the Tribunal, after hearing both sides, passes orders it thinks fit.

  1. AThe contributory has no remedy once the liquidator decides
  2. BThe contributory may apply to the Tribunal, which after hearing the applicant and the liquidator passes such orders as it thinks fitCorrect
  3. CThe contributory must apply to the Central Government, whose order is final
  4. DThe contributory may apply only after the compromise is completed

Explanation

Section 343(3) allows any creditor or contributory to apply to the Tribunal on any exercise or proposed exercise of the liquidator's powers. The Tribunal gives a reasonable opportunity to the applicant and liquidator and then passes suitable orders. 'Proposed' exercise rules out waiting until completion.

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