OBJECTIVE
Compromise and arrangement is a form of Corporate Restructuring where company enters into an agreement with its creditors or members to reorganise the capital structure of the company. The webinar covers the aspects of statutory provisions pertaining to compromise and arrangement under Companies Act, 2013 in detail along with judicial precedents.
Section 230 to 233 of Companies Act, 2013
Procedure for Scheme of Compromise, Amalgamation and Arrangement.
Also it covers the newly introduced Sec. 233 of Companies Act, 2013 for FAST TRACK MERGER
OBJECTIVE
Merger and Amalgamation (M&A) is one of the forms of Corporate Restructuring. M&A transactions are generally done to diversify the business, reduce competition, exercise increased scale of operations, to focus on core businesses to streamline costs and improve profit margins, etc. Provisions for merger and amalgamation under Companies Act, 2013 also includes demerger. The webinar deals with the provisions of merger and amalgamation enshrined in Companies Act, 2013 read with Rules made there under, legal formalities involved and judicial precedents.
OBJECTIVE
Liquidator is a person appointed by a Company or a Competent authority to manage the activities of winding up of the Company. Provisions pertaining to appointment of liquidator are stipulated under Chapter XX of Companies Act, 2013. The webinar covers the aspects of appointment of liquidator, types of liquidators, powers and duties of liquidator and judicial precedents.
OBJECTIVE
Winding up is the final stage in the business cycle of a Company. It is the process of closing down the legal existence of a company. It can be done either by the Company on its own (voluntary winding up) or by an order passed by the Tribunal (compulsory winding up). The webinar covers the aspects of various provisions involved in winding up as enshrined in Companies Act, 2013 along with judicial precedents.
To analyse and understand the provisions of Foreign Exchange Management (Adjudication Proceedings And Appeal) Rules, 2000. We shall understand the provisions relating to imposition of penalty, the adjudicating authority, inquiry proceedings and the various aspects of appeal.
The Companies Act, 2013 introduce the novel concepts fast track merger for Small Companies and Holding and its wholly owned subsidiary Companies. This is the first significant change to merger and amalgamations regime in the last six decades, with the previous Companies Act having been in place since 1956.
Section 230 to 233 of Companies Act, 2013
Procedure for Scheme of Compromise, Amalgamation and Arrangement.
Also it covers the newly introduced Sec. 233 of Companies Act, 2013 for FAST TRACK MERGER
OBJECTIVE
Merger and Amalgamation (M&A) is one of the forms of Corporate Restructuring. M&A transactions are generally done to diversify the business, reduce competition, exercise increased scale of operations, to focus on core businesses to streamline costs and improve profit margins, etc. Provisions for merger and amalgamation under Companies Act, 2013 also includes demerger. The webinar deals with the provisions of merger and amalgamation enshrined in Companies Act, 2013 read with Rules made there under, legal formalities involved and judicial precedents.
OBJECTIVE
Liquidator is a person appointed by a Company or a Competent authority to manage the activities of winding up of the Company. Provisions pertaining to appointment of liquidator are stipulated under Chapter XX of Companies Act, 2013. The webinar covers the aspects of appointment of liquidator, types of liquidators, powers and duties of liquidator and judicial precedents.
OBJECTIVE
Winding up is the final stage in the business cycle of a Company. It is the process of closing down the legal existence of a company. It can be done either by the Company on its own (voluntary winding up) or by an order passed by the Tribunal (compulsory winding up). The webinar covers the aspects of various provisions involved in winding up as enshrined in Companies Act, 2013 along with judicial precedents.
To analyse and understand the provisions of Foreign Exchange Management (Adjudication Proceedings And Appeal) Rules, 2000. We shall understand the provisions relating to imposition of penalty, the adjudicating authority, inquiry proceedings and the various aspects of appeal.
The Companies Act, 2013 introduce the novel concepts fast track merger for Small Companies and Holding and its wholly owned subsidiary Companies. This is the first significant change to merger and amalgamations regime in the last six decades, with the previous Companies Act having been in place since 1956.
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OBJECTIVE
In order to streamline the process of merger or amalgamation, Companies Act, 2013 (the Act) has brought in simplified procedures to enable the same. Apart from the regular provisions stipulated for merger or amalgamation of Companies under Section 232 of the Act, for certain companies the process has been even more relaxed. This process is popularly termed as Fast Track Merger and is covered under Section 233 of the Act read with Rules made there under. Also, provisions are enshrined in the Act for merger or amalgamation of Company with Foreign Company which is otherwise called as Cross Border Merger.
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I hope, this presentation will help you in your work or helps you to enhance your knowledge.
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The PPT contains all the relevant information regarding the topic "Kinds of Company Meetings and Procedure" under the subject of Company/Corporate Law.
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Fast track merger and cross border merger under companies act, 2013DVSResearchFoundatio
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In order to streamline the process of merger or amalgamation, Companies Act, 2013 (the Act) has brought in simplified procedures to enable the same. Apart from the regular provisions stipulated for merger or amalgamation of Companies under Section 232 of the Act, for certain companies the process has been even more relaxed. This process is popularly termed as Fast Track Merger and is covered under Section 233 of the Act read with Rules made there under. Also, provisions are enshrined in the Act for merger or amalgamation of Company with Foreign Company which is otherwise called as Cross Border Merger.
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3. Legends used in the Presentation
Act Companies Act, 2013
CG Central Government
KMP Key Managerial Personnel
RBI Reserve Bank of India
ROC Registrar of Companies
Rule Companies (Compromises, Arrangements and Amalgamations) Rules, 2016
SEBI Securities and Exchange Board of India
Tribunal/ NCLT National Company Law Tribunal
4. Presentation Schema
Overview
Compromise and
arrangement under the
Act
Power to Compromise
and make arrangement
with creditors and
members
Application procedure
Disclosures to be made
along with the
application
Directions at hearing of
the application
Notice of the meeting
Notice to statutory
authorities
Voting and proxies
Result and report of
the meeting
Sanction of
compromise and
arrangement
Order given by Tribunal
Report on working of
compromise or
arrangement and
Liberty to apply
Power of Tribunal to
enforce Compromise or
Arrangement
Judicial Precedents
5. Overview
Corporate restructuring is the process of bringing out a change in the capital structure of the business entity in order to make
the business competitive, achieve increased efficiency and profitability, etc.
It is one of the means that can be employed to meet the challenges and problems which confront business
General or the popular forms of corporate restructuring are,
Compromise and arrangements
Merger/amalgamation
Acquisition/ takeover
Demerger
Divestiture and Slump sale
Compromise and arrangement is a form of restructuring between creditors/members and the Company
The difference between a compromise and an arrangement is that the compromise is between the creditors and the Company
whereas an arrangement is between the members and the Company
6. Compromise and arrangement under the Act
Compromise and
arrangement
Power to Compromise or Make
Arrangements with Creditors and Members
– Section 230 of the Act
Power of Tribunal to Enforce Compromise or
Arrangement – Section 231 of the Act
7. Power to Compromise or Make Arrangements with Creditors
and Members – Section 230(1) of the Act
Compromise or arrangement
can be proposed between
a Company and its creditors or any class of them, or a Company and its members or any class of them
However, application for the compromise or arrangement shall be made to the Tribunal by the following persons:
Liquidators, in case of Company which is being wound upMembersCreditorsCompany
On receipt of application, Tribunal may order a meeting of the creditors or class of creditors, or of the members
or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal directs
In Section 230 and 231 of the Act, in case of a Government Company, for the word “Tribunal”, the word “Central Government” shall be substituted.
In case of Government Company, the power to control any scheme of compromise or arrangement under the Act vests with CG.
8. Application procedure – Rule 3
An application to the Tribunal for the proposed compromise or arrangement may be submitted in Form no. NCLT-1 along with the following:
Where more than one Company is involved in a scheme in relation to which the application is being filed, such application may, at the
discretion of such companies, be filed as joint-application
Where the Company is not the applicant, a copy of the notice of admission and of the affidavit shall be served on the Company, or, where
the Company is being wound up, on its liquidator, atleast 14 days before the date fixed for the hearing of the notice of admission
The applicant shall also disclose to the Tribunal in the application, the basis on which each class of members or creditors has been
identified for the purposes of approval of the scheme
• a notice of admission in Form No. NCLT-2
• an affidavit in Form No. NCLT -6
• a copy of scheme of compromise or arrangement, which should include disclosures as per section 230(2) of the Act
• Fee of Rs. 5,000
9. Disclosures to be made along with the application – Section
230(2) of the Act
The Company or any other person, by whom an application is made under Section 230(1), shall disclose to
the Tribunal by affidavit, the following particulars:
all material facts relating to the Company, such as the latest financial position of the Company, the latest auditor’s report on the accounts of
the Company and the pendency of any investigation or proceedings against the Company
reduction of share capital of the Company, if any, included in the compromise or arrangement*
any scheme of corporate debt restructuring consented to by atleast than 75% of the secured creditors in value, including –
1. creditor’s responsibility statement in Form CAA - 1
2. safeguards for the protection of other secured and unsecured creditors
3. report by the auditor that the fund requirements of the Company after the corporate debt restructuring as
approved shall conform to the liquidity test based upon the estimates provided to them by the Board
4. where the Company proposes to adopt the corporate debt restructuring guidelines specified by the Reserve Bank
of India, a statement to that effect
5. a valuation report in respect of the shares and the property and all assets, tangible and intangible, movable and
immovable, of the Company by a registered valuer
*Provisions of section 66 shall not apply to the reduction of share capital effected in pursuance of the order of the Tribunal
10. Directions at hearing of the application – Rule 5
Upon hearing the application under section 230 (1) of the Act, the Tribunal shall, unless it thinks fit for any reason to dismiss the
application, give such directions as it may think necessary in respect of the following matters:
determining the class(es) of
creditor or of members whose
meeting(s) have to be held for
considering the proposed
compromise or arrangement
dispensing with the meeting or
meeting for any class or classes of
creditors in terms of section
230(9) of the Act
fixing the time and place of the
meeting or meetings
appointing a Chairperson and
scrutinizer for the meeting(s) to
be held and fixing the terms of
his / her appointment including
remuneration
fixing the quorum and the
procedure to be followed at the
meeting(s), including voting in
person/ proxy/ postal ballot/
voting through electronics means
determining the values of the
creditors or the members, or the
creditors or member of any class,
as the case may be, whose
meetings have to be held
notice to be given of the meeting
or meetings and the
advertisement of such notice
notice to be given to sectoral
regulators or authorities as
required under section 230(5) of
the Act
the time within which the chairperson of the meeting is required to
report the result of the meeting to the Tribunal
such other matters as the Tribunal may deem necessary
The Tribunal may dispense with calling of a meeting of creditor or class of creditors where such creditors or class of creditors, having at
least 90% value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement – Section 230(9) of the Act
11. Notice of the meeting – Section 230(3) read with Rule 6
Where a meeting is proposed to be called in pursuance of an order of the Tribunal under section 230(1)
a notice of such meeting shall be sent to all the creditors or class of creditors and to all the members
or class of members and the debenture-holders of the Company, individually at the address registered
with the Company in Form CAA-2
which shall be accompanied by a statement disclosing the details of the compromise or arrangement,
a copy of the valuation report, if any, and such other matters as prescribed under Rule 6
The notice shall be sent by the chairperson appointed for the meeting, or, if the Tribunal so directs, by the Company (or its liquidator), or any
other person as the Tribunal may direct, by registered post or speed post or by courier or by e-mail or by hand delivery or any other mode as
directed by the Tribunal to their last known address at least one month before the date fixed for the meeting
The service of meeting shall be deemed to have been effected in case of delivery by post, at the expiration of 48 hours after
the letter containing the same is posted
12. Contd.
The notice of the meeting to the creditors and members shall be accompanied by a copy of the scheme of
compromise or arrangement, and the following details if such details are not already included in the said scheme
1. Details of the order of the Tribunal directing the calling, convening and conducting of the meeting
•Date of the Order
•Date, Time and Venue of the Meeting
2. Details of the Company including,
Corporate Identification Number (CIN) or Global Location
Number (GLN) of the Company
Permanent Account Number (PAN)
name of the Company
date of incorporation
type of the Company (whether public or private or one-
person Company)
registered office address and e-mail address
summary of main object as per the memorandum of association
and main business carried on by the Company
details of change of name, registered office and objects of the
Company during the last five years
name of the stock exchange (s) where securities of the Company
are listed, if applicable
details of the capital structure of the Company including
authorized, issued, subscribed and paid up share capital
name of the promoters and directors along with their addresses
13. Contd.
3. If the scheme of compromise or arrangement relates to more than one Company, the fact and details of any relationship subsisting
between such companies who are parties to such scheme of compromise or arrangement, including holding, subsidiary or of
associate companies
4. Date of Board meeting at which the scheme was approved by the Board of directors including the name of the directors who voted
in favour of the resolution, who voted against the resolution and who did not vote/ participate on such resolution
5. Explanatory statement disclosing details of the scheme of compromise or arrangement including,
parties involved in such compromise or arrangement
in case of amalgamation or merger, appointed date, effective
date, share exchange ratio (if applicable) and other
considerations, if any
summary of valuation report (if applicable) including basis of
valuation and fairness opinion of the registered valuer, if any
declaration that the valuation report is available for inspection at
the registered office of the Company
details of capital/debt restructuring, if any
rationale for the compromise or arrangement
benefits of the compromise or arrangement as
perceived by the Board of directors to the Company,
members, creditors and others (as applicable)
amount due to unsecured creditors
Valuation report shall be made by a registered valuer as provided under Section 247 of the Act
14. Contd.
6. Disclosure about the effect of the compromise or arrangement on,
Key
managerial
personnel
Creditors
Employee of
the Company
Deposit trustee and
debenture trustee
Debenture
holders
Directors Promoters
Non-
Promoter
members
Depositors
7. Disclosure about effect of compromise or arrangement on material interests of directors, KMP and debenture trustee
The term ‘interest’ extends beyond an interest in the shares of the Company, and is with reference to the proposed scheme of
compromise or arrangement
8. Investigation or proceedings, if any, pending against the Company under the Act
9. Details of approvals, sanctions or no-objection(s), if any, from regulatory or any other government authorities required, received or
pending for the proposed scheme of compromise or arrangement
15. Contd.
10. Details about the availability of the following documents for obtaining extract from or for making/obtaining copies of or for
inspection by the members and creditors, namely:
a. latest audited financial statements of the Company including consolidated financial statements
b. copy of the order of Tribunal in pursuance of which the meeting is to be convened or has been dispensed with
c. copy of scheme of compromise or arrangement
d. contracts or agreements material to the compromise or arrangement
e. certificate issued by Auditor of the Company to the effect that the accounting treatment, if any, proposed in the scheme of
compromise or arrangement is in conformity with the Accounting standards prescribed under section 133 of the Act
f. such other information or documents as the Board or Management believes necessary and relevant for making decision for or
against the scheme
11. A statement to the effect that the persons to whom the notice is sent may vote in the meeting either in person or by proxies, or
where applicable, by voting through electronics means
For the purpose of Rule 6, disclosure required to be made by a Company shall be made in respect of all the companies, which are part of
the compromise or arrangement
16. Advertisement of notice of the meeting
Notice of the meeting shall be advertised in Form No. CAA.2 in at least one English newspaper and in at least one vernacular
newspaper having wide circulation in the state in which the registered office of the Company is situated, or such newspaper as may
be directed by the Tribunal
Notice and other documents shall also be placed, not less than thirty days before the date fixed for the meeting, on the website of
the Company, if any, and in case of listed Company, the same shall be sent to SEBI and the recognized stock exchange where the
securities of the Company are listed, for placing on their website
Where separate meetings of classes of creditors or members are to be held, a joint advertisement for such meetings may be given
Where the notice for the meeting is also issued by way of an advertisement, it shall indicate the time within which copies of the
compromise or arrangement shall be made available to the concerned persons free of charge from the registered office of the
Company
Every creditor or member entitled to attend the meeting shall be furnished by the Company, free of charge, within one day on a requisition
being made for the same, with a copy of the scheme of the proposed compromise or arrangement together with a copy of the statement
required to be furnished under section 230 of the Act – Rule 11
17. Notice to statutory authorities – Section 230(5) read with Rule 8
Notice and other documents as prescribed under Rule 6 shall be sent to the following authorities in Form No. CAA. 3
• Central Government, the Registrar of Companies, the Income-tax authorities, in all cases
• RBI, SEBI, Competition Commission of India, and the stock exchanges, as may be applicable
• Other sectoral regulators or authorities, as required by Tribunal
Notice of the authorities mentioned above shall be sent after the notice is sent to the members or creditors of the Company, by
registered post or by speed post or by courier or by hand delivery at the office of the authorities
If the authorities desire to make any representation, the same shall be sent to the Tribunal within a period of thirty days from
the date of receipt of such notice and copy of such representation shall simultaneously be sent to the concerned companies
In case of representation not being received within the stated period of thirty days by the Tribunal, it shall be presumed that the
authorities have no representation to make on the proposed scheme of compromise or arrangement
18. Affidavit of service – Rule 12
The chairperson appointed for the
meeting of the Company or other
person directed to issue the
advertisement and the notices of
the meeting
shall file an affidavit before the
Tribunal not less than seven days
before the date fixed for meeting
or date of the first of the meetings,
as the case may be,
stating that the directions
regarding the issue of notices and
the advertisement have been duly
complied with
In case of default of the above provision, the application along with copy of the last order issued shall be posted before the
Tribunal for such orders as it may think fit to make
19. Voting – Section 230(4) read with Rule 9
The persons to whom the notice is sent may vote in the meeting either themselves or through proxies or by postal ballot to the
adoption of the compromise or arrangement within one month from the date of receipt of such notice
Any objection to the compromise or arrangement shall be made only by persons holding atleast 10% of the shareholding or
having outstanding debt amounting to atleast 5% of the total outstanding debt as per the latest audited financial statements
“Shareholding” shall mean the shareholding of the members of the class who are entitled to vote on the proposal
“Outstanding debt” shall mean all debt owed by the Company to the respective class or classes of creditors that remains outstanding,
• as per the latest audited financial statement or
• if such statement is more than 6 months old, as per provisional financial statement not preceding the date of application by more
than 6 months
20. Proxies – Rule 10
Voting by proxy shall be permitted, provided a proxy in the prescribed form duly signed by the person entitled to attend and vote at the
meeting is filed with the Company at its registered office not later than 48 hours before the meeting
In case of a body corporate being a member or creditor of the Company, a certified true copy of the Board resolution passed by the
directors of the body corporate authorising a person to act as its representative at the meetings shall be lodged with the Company at its
registered office not later than 48 hours before the meeting
Person appointed as a proxy of a member or a creditor to attend the meeting shall not be a minor
Proxy of a member or creditor blind or incapable of writing may be accepted if such member or creditor has attached his signature or mark
thereto in presence of a witness who shall add to his signature his description and address. Such witness shall certify that all insertions in
the proxy have been made by him at the request and in the presence of member or creditor before he attached his signature or mark
The proxy of a member or creditor who does not know English may be accepted if it is executed in the manner prescribed in the
preceding provision and the witness certifies that it was explained to the member or creditor in the language known to him and gives the
member’s or creditor’s name in the English below the signature
21. Result and report of the meeting
The report of the result of the meeting shall be in Form no. CAA. 4 and shall state accurately the number of creditors or class of
creditors, as the case may be, who were present and who voted at the meeting either in person or by proxy, and where applicable,
who voted through electronics means, their individual values and the way they voted
The chairperson of the meeting (or where there are separate meetings, the chairperson of each meeting) shall, within the time fixed
by the tribunal, or where no time has been fixed, within three days after the conclusion of the meeting submit a report to the
Tribunal on the result of the meeting in Form No. CAA. 4
The voting at the meeting or meetings held in pursuance of the directions of the tribunal under Rule 5 on all resolutions shall take
place by poll or by voting through electronics means
Majority of persons representing three-fourths in value of the creditors, or class of creditors or members or class of members, as the
case may be, voting in person or by proxy or by postal ballot should agree to the compromise or arrangement for getting sanction
22. Sanction of compromise and arrangement
Where the proposed compromise or arrangement is agreed to by the members or creditors or both as the case may be, with or without
modification, the Company (or its liquidator), shall, within seven days of the filing of the report by the chairperson, present a petition to
the Tribunal in Form No.CAA.5 for sanction of the scheme of compromise or arrangement
Where the Company fails to present the petition for confirmation of the compromise or arrangement as aforesaid, it shall be open to
any creditor or member as the case may be, with the leave of the Tribunal, to present the petition and the Company shall be liable for
the cost thereof
The Tribunal shall fix a date for the hearing of petition, and notice of the hearing shall be advertised in the same newspaper in which
the notice of the meeting was advertised, or in such other newspaper as the Tribunal may direct, not less than ten days before the date
fixed for the hearing
The notice of the hearing of the petition shall also be served by the Tribunal to the objectors or to their representatives under section
230(4) of the Act and to the Central Government and other authorities who have made representation under rule 8 and have desired to
be heard in their representation
23. Contd.
The order of the Tribunal shall provide for any or all of the following matters:
Where the compromise or arrangement provides for conversion of preference shares into equity shares, such preference shareholders
shall be given an option to either obtain arrears of dividend in cash or accept equity shares equal to the value of the dividend payable
the protection of any class of creditors
if the compromise or arrangement results in the variation of the shareholders’ rights, it shall be given effect to under the provisions
of Section 48
if the compromise or arrangement is agreed to by majority of persons representing three-fourths in value of the creditors, any
proceedings pending before the Board for Industrial and Financial Reconstruction established under section 4 of the Sick Industrial
Companies (Special Provisions) Act, 1985 shall abate
such other matters including exit offer to dissenting shareholders, if any, as are in the opinion of the Tribunal necessary to effectively
implement the terms of the compromise or arrangement
No compromise or arrangement shall be sanctioned by the Tribunal unless a certificate by the Company's auditor has been filed with the
Tribunal to the effect that the accounting treatment, if any, proposed in the scheme of compromise or arrangement is in conformity with
the accounting standards prescribed under section 133
24. Order given by Tribunal
The order shall direct that a certified copy of the same shall be filed with the registrar of
companies
within thirty days from the date of the receipt of copy of the order, or such other time as
maybe fixed by the tribunal
The order shall be in Form No. CAA. 6, with such variations as may be necessary
No compromise or arrangement in respect of any buy-back of securities under this section shall be sanctioned by the Tribunal
unless such buy-back is in accordance with the provisions of section 68 of the Act
25. Report on working of compromise or arrangement
At any time after issuing an
order sanctioning the
compromise or
arrangement, the Tribunal
may, either on its own
motion or on the application
of any interested person,
make an order directing the
Company or where the
Company is being wound-
up, its liquidator, to submit
to the Tribunal within such
time as the Tribunal may fix,
a report on the working of
the said compromise or
arrangement and on
consideration of the report,
the Tribunal may pass such
orders or give such direction
as it may think fit
26. Liberty to apply
The Company, or any creditor or member thereof, or in case of a Company which is being wound-up, its liquidator, may, at
any time after passing of the order sanctioning the compromise or arrangement, apply to the Tribunal for the determination
of any question relating to the working of the compromise or arrangement
The application shall in the first instance be posted before the Tribunal for directions as to the notices and the
advertisement, if any, to be issued, as the Tribunal may direct
The Tribunal may, on such application, pass such orders and give such directions as it may think fit with regard to the matter,
and may make such modifications in the compromise or arrangement as it may consider necessary for the proper working
thereof, or pass such orders as it may think fit in the circumstances of the case
27. Takeover offer
Any compromise or arrangement may include takeover offer made in such manner as may be prescribed*
However, in case of listed companies, takeover offer shall be as per the regulations framed by SEBI*
An aggrieved party may make an application to the Tribunal in the event of any grievances with respect to the
takeover offer of companies other than listed companies in such manner as may be prescribed and the Tribunal
may, on application, pass such order as it may deem fit*
*The above provisions relating to takeover offer are yet to be notified
28. Power of Tribunal to enforce Compromise or Arrangement –
Section 231 of the Act
Where the Tribunal makes an order under section 230 sanctioning a compromise or an arrangement in respect of a Company, it –
• shall have power to supervise the implementation of the compromise or arrangement; and
• may, at the time of making such order or at any time thereafter, give such directions in regard to any matter or make such
modifications in the compromise or arrangement as it may consider necessary for the proper implementation of the compromise or
arrangement
If the Tribunal is satisfied that the compromise or arrangement sanctioned under section 230 cannot be implemented satisfactorily with
or without modifications, and the Company is unable to pay its debts as per the scheme, it may make an order for winding up the
Company and such an order shall be deemed to be an order made under section 273*
The above mentioned provisions shall, so far as may be, also apply to a Company in respect of which an order has been made before the
commencement of the Act sanctioning a compromise or an arrangement
*Section 273 of the Act deals with powers of the Tribunal pursuant to winding up of the Company
29. Judicial Precedents
MEL Windmills (P.) Ltd. vs. Mineral Enterprises Ltd. – [2019] 108 taxmann.com 140 (NCL-AT)
Accordingly, the appeal was allowed. The matter was remanded back to the Tribunal for proceeding further in the light of
observations made by NCLAT and pass appropriate orders after hearing the parties
It was also held that pending issues could not be construed as an impediment in sanctioning proposed scheme of compromise and
arrangement
It was held before the NCLAT that at the stage of calling of meeting of creditors/members for consideration of scheme of
compromise or arrangement, Tribunal is not required to examine merits of scheme qua proposed compromise/arrangement and any
such indulgence on part of Tribunal would fall foul of provision engrafted in section 230(1) of the Act
However, the Tribunal, instead of considering the application for dispensing the meeting, rejected the proposed scheme of demerger
itself citing pending issues with the demerged Company
Appellant Companies applied for an arrangement of demerger by filing affidavits before the Tribunal for dispensing with the meeting
of creditors and members pursuant to the provisions of Section 230(9) of the Act