Section 231 of the Companies Act, 2013
Section 231 of the Companies Act, 2013
Title: "Power of Tribunal to enforce compromise or arrangement"
📘 Summary:
Section 231 deals with the powers of the National Company Law Tribunal (NCLT) to supervise and implement a compromise or arrangement that has already been sanctioned under Section 230 of the Companies Act, 2013.
🔍 Key Provisions:
✅ 1. Tribunal’s Supervisory Power:
After the Tribunal approves a scheme of compromise or arrangement under Section 230, it may:
Supervise the implementation of the scheme, and
Give directions as necessary to ensure its effective working.
⚠️ 2. Modification or Termination of Scheme:
If the Tribunal finds that the scheme:
Cannot be effectively implemented, or
Circumstances have changed significantly,
Modify the scheme, or
Terminate or wind up the company (if it is a company being wound up).
🏛️ 3. Application by Stakeholders:
Any person concerned (such as creditors, members, or the company itself) can apply to the Tribunal to:
Report non-implementation,
Seek modification or enforcement of the scheme.
⚖️ Purpose:
To ensure that a sanctioned compromise or arrangement is not just approved but actually implemented, and
To provide a legal remedy in case the implementation fails or becomes impractical.
🔗 Related Section:
Section 230 – Compromise and arrangement between company and creditors or members.
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