Section 392 of the Companies Act, 2013
Section 392 of the Companies Act, 2013 deals with the power of the Tribunal to enforce compromises and arrangements.
Section 392 – Power of Tribunal to enforce compromise or arrangement
Bare Act Language:
If the Tribunal is satisfied that a compromise or arrangement sanctioned under section 230 has not been carried out, or is not workable, it may, either on its own motion or on the application of any person interested in the compromise or arrangement, make such orders as it may consider necessary for the proper working of the compromise or arrangement.
It may also, if it considers that the compromise or arrangement cannot be worked satisfactorily with or without modifications, make an order for winding up the company.
Key Points:
Applicability:
This section applies after a compromise or arrangement is sanctioned by the Tribunal under Section 230.
Failure to Implement:
If the Tribunal finds that the arrangement is not being carried out or is unworkable, it can take necessary actions.
Types of Actions by Tribunal:
Pass orders to ensure the scheme is implemented effectively.
Modify the arrangement if needed.
Order winding up of the company if the scheme is completely unworkable.
Who Can Apply:
Tribunal on its own motion, or
Any person interested in the compromise or arrangement (e.g., shareholders, creditors).
Objective of Section 392:
To ensure that schemes approved under Section 230 are effectively implemented and to provide a remedy when such schemes fail or become unfeasible.
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