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

Mehta Textiles Ltd's advisor drafts a note stating that a scheme of revival and rehabilitation of a sick company will be sanctioned by the Tribunal under Section 262 of the Companies Act, 2013. As per the official text of the Act, what is the correct position?

Section 262 on sanction of scheme has been omitted from the Companies Act, 2013 with effect from 15 November 2016. The advisor's note therefore relies on a provision that no longer exists. Sections 261, 263 and 264 were omitted on the same date.

  1. ASection 262 is currently in force and empowers the Tribunal to sanction such schemes
  2. BSection 262 has been omitted with effect from 15 November 2016, so the note relies on a provision no longer in the ActCorrect
  3. CSection 262 now applies only to private companies
  4. DSection 262 has been replaced by Section 263, which now governs sanction

Explanation

The official text shows that Section 262 (Sanction of scheme) was omitted by section 255 and the Eleventh Schedule of the amending Act w.e.f. 15-11-2016. Section 263 was omitted at the same time, so option D is wrong. The note cannot rely on Section 262.

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