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2019 (11) TMI 187 - AT - Companies LawWinding up of Company - initiation of CIRP during the pendency of the petition - Section 241 read with Section 242 of the Companies Act, 2013 - HELD THAT:- From bare perusal of Section 241 if read with Section 242 of the Companies Act, 2013, it will be clear that on an application made under Section 241, if the Tribunal is of the opinion that company’s affairs have been or are being conducted in a manner prejudicial to the interest of the company and that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding-up order on the ground that it was just and equitable that the company should be wound-up, in such case, the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit. The purpose of Section 241 read with Section 242 of the Companies Act, 2013 is to save the company from winding up even if the company’s affairs have been or are being conducted in a manner prejudicial or oppressive to any member or members or prejudicial to public interest. The essence of Sections 241 & 242 will be defeated if during the pendency of the petition, the ‘Operational Creditors’ or ‘Financial Creditors’ are allowed to trigger ‘Corporate Insolvency Resolution Process’ itself. The Tribunal while dealing with the matter failed to notice the aforesaid fact. It is a fit case in which the Board of Directors should be allowed to take its own decision as to how it will meet its end for meeting the liabilities of the ‘Operational Creditors’ / ‘Financial Creditors’ and whether the liability is of one or other unit including ‘Sonepat Unit’ and we, accordingly, allow the Board of Directors to take such decision to save the company from initiation of the ‘Corporate Insolvency Resolution Process’ and not for other purpose. Impugned order set aside - appeal allowed.
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