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

The Tribunal sanctions a compromise proposed by the Company Liquidator of Iyer Pharma Ltd, subject to the condition that the settlement amount be paid within 90 days. The counterparty fails to pay within 90 days. Under Section 459, what may the Tribunal do?

Under Section 459(1), the Tribunal may grant sanction subject to conditions it thinks fit and may rescind or withdraw that sanction if a condition is contravened. So when the 90-day payment condition is breached, the Tribunal can withdraw its sanction.

  1. ANothing, as sanction once given is irrevocable
  2. BOnly impose a fine under Section 262
  3. CRescind or withdraw the sanction for contravention of the conditionCorrect
  4. DTransfer the matter to the Central Government for fresh sanction

Explanation

Section 459(1) lets the Tribunal grant sanction subject to conditions, limitations or restrictions it thinks fit. It may rescind or withdraw the sanction if any such condition is contravened. Section 262 has been omitted, so option B is wrong.

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