Section 262 of the Companies Act, 2013
Section 262 of the Companies Act, 2013
– Power of Tribunal to enforce compromise or arrangement
📜 Bare Act Summary (Simplified):
Section 262 empowers the National Company Law Tribunal (NCLT) to enforce the compromise or arrangement approved by the company under sections like 230 or 231 (related to mergers, amalgamations, or schemes of arrangement).
✅ Key Provisions of Section 262:
⚖️ 1. Enforcement of Scheme:
After the Tribunal approves a scheme of compromise or arrangement, the scheme becomes binding on the company, its shareholders, creditors, and all concerned parties.
The Tribunal can make necessary orders to give effect to the scheme.
🏛️ 2. Powers of the Tribunal:
The Tribunal may:
Order the registration of documents (like share transfer or property transfer) without payment of stamp duty if allowed by the scheme.
Direct the company to take all steps necessary to implement the scheme.
Provide for the protection of members or creditors under the scheme.
Issue any other orders required for the scheme’s implementation.
📝 3. Binding Effect:
The scheme, once sanctioned, is binding on all members and creditors, whether or not they attended the meetings or voted in favor.
The scheme overrides any other law or agreement inconsistent with it.
🧾 Example:
If Company A and Company B merge following a scheme sanctioned by the NCLT, Section 262 empowers the Tribunal to ensure transfer of assets, liabilities, and shares as per the approved scheme.
📌 Summary Table:
| Power/Aspect | Description |
|---|---|
| Tribunal’s Role | Enforce sanctioned compromise/arrangement scheme |
| Binding Nature | Scheme binds all members, creditors, companies |
| Orders Possible | Registration without stamp duty, implementation steps, protections |
| Override | Scheme overrides conflicting laws or agreements |
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