Section 273 of the Companies Act, 2013
Section 273 of the Companies Act, 2013 deals with the Compromise or arrangement involving a company, its creditors, or members, specifically the Court’s power to enforce an agreement.
📜 Section 273 – Power of Court to Enforce Compromise or Arrangement
✅ Key Provisions:
Context:
This section applies after a compromise or arrangement between a company and its creditors or members has been approved by the Tribunal (NCLT) under Sections 230 to 232.
Court’s Power:
The Court (High Court or Supreme Court) has the power to enforce the compromise or arrangement.
The Court may make any order or give any direction to ensure that the terms of the compromise or arrangement are implemented effectively.
Binding Effect:
Once the Court enforces the arrangement, it is binding on the company, its members, creditors, and all other parties concerned.
Relief to Parties:
The Court may grant relief to any party affected by the compromise or arrangement, including:
Restraining enforcement actions against the company,
Adjusting rights of creditors or members,
Any other necessary directions for carrying out the arrangement.
⚖️ Purpose:
To give legal sanctity and enforceability to compromises or arrangements approved by the Tribunal.
To help companies restructure or settle disputes in an orderly manner under judicial supervision.
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