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

Two years after the Tribunal sanctioned Kaveri Agro Ltd's arrangement, a practical hurdle arose in transferring a particular asset under the scheme. The company asks the Tribunal for a change in the scheme terms. Under section 231, what is the Tribunal's position?

The Tribunal may make modifications in the sanctioned scheme, and give directions, whenever it considers them necessary for proper implementation, including after the sanction order. Section 231(1)(b) expressly allows this at the time of the order or at any time thereafter, without needing a fresh application.

  1. AIt may make modifications in the compromise or arrangement it considers necessary for proper implementation, even after the sanction orderCorrect
  2. BIt cannot modify the scheme because modifications are possible only before sanction
  3. CIt may modify the scheme only with the written consent of every member and creditor
  4. DIt may only direct the company to apply afresh under section 230

Explanation

Section 231(1)(b) allows the Tribunal, at the time of the order or at any time thereafter, to give directions and make modifications it considers necessary for proper implementation. The law does not require unanimous consent or a fresh application. Hence restricting modifications to the pre-sanction stage is incorrect.

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