TMI Blog2019 (12) TMI 1650X X X X Extracts X X X X X X X X Extracts X X X X ..... Law Tribunal) should follow the same principle and should allow the Liquidator to constitute a Committee of Creditors for its opinion to find out whether the arrangement of Scheme is viable, feasible and having appropriate financial matrix. It will be open for the Adjudicating Authority as a Tribunal to approve the arrangement or Scheme in spite of some irrelevant objections as may be raised by one or other creditor or member keeping in mind the object of the Insolvency and Bankruptcy Code, 2016. The Liquidator to first act in accordance with the decision in Y. Shivram Prasad by following the procedure of Sections 230-232 of the Companies Act, 2013. It is noticed that for the purpose of proceedings under Sections 230 to 232 of the Companies Act, 2013, it is open to the Adjudicating Authority to grant more than 90 days of period - for completion of the Liquidation Process , average two years time has been granted. The sale of assets can be done only if the Liquidator fails to revive the Company by pursuing the proceedings under Section 230 vis- -vis 232 of the Companies Act, 2013 as a going concern. Appeal disposed off. - Company Appeal (AT) (Insolvency) No. 138 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, Liquidator required to take steps to ensure that the company remains a going concern and instead of liquidation and for revival of the Corporate Debtor by taking certain measures. 12. The aforesaid issue fell for consideration before this Appellate Tribunal in S.C. Sekaran v. Amit Gupta Ors.─ Company Appeal (AT) (Insolvency) Nos. 495 496 of 2018 wherein this Appellate Tribunal having noticed the decision of the Hon ble Supreme Court in Swiss Ribbon Pvt. Ltd. Anr. v. Union of India Ors. (Supra) and Meghal Homes Pvt. Ltd . observed and held: 5. We have heard the learned counsel for the parties and perused the record. The Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. Anr. vs. Union of India Ors. Writ Petition (Civil) No. 99 of 2018 by its judgment dated 25th January, 2019, observed as follows: 11. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the attempt must be to ensure that rather than dissolving a company it is allowed to revive. Moreover, Section 391(1)(b) gives a right to the liquidator in the case of a company which is being wound up, to propose a compromise or arrangement with creditors and members indicating that the provision would apply even in a case where an order of winding up has been made and a liquidator had been appointed. Equally, it does not appear to be necessary to go elaborately into the question whether in the case of a company in liquidation, only the Official Liquidator could propose a compromise or arrangement with the creditors and members as contemplated by Section 391 of the Act or any of the contributories or creditors also can come forward with such an application . 7. Section 391 of the Companies Act, 1956 has since been replaced by Section 230 of the Companies Act, 2013, which is as follows: 230. Power to compromise or make arrangements with creditors and members (1) Where a compromise or arrangement is proposed (a) between a company and its creditors or any class of them; or (b) between a company and its members or any class of them, the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be accompanied by a statement disclosing the details of the compromise or arrangement, a copy of the valuation report, if any, and explaining their effect on creditors, key managerial personnel, promoters and non-promoter members, and the debenture-holders and the effect of the compromise or arrangement on any material interests of the directors of the company or the debenture trustees, and such other matters as may be prescribed: Provided that such notice and other documents shall also be placed on the website of the company, if any, and in case of a listed company, these documents shall be sent to the Securities and Exchange Board and stock exchange where the securities of the companies are listed, for placing on their website and shall also be published in newspapers in such manner as may be prescribed: Provided further that where the notice for the meeting is also issued by way of an advertisement, it shall indicate the time within which copies of the compromise or arrangement shall be made available to the concerned persons free of charge from the registered office of the company. (4) A notice under sub-section (3)shall provide that the persons to whom the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dividend payable; (b) the protection of any class of creditors; (c) if the compromise or arrangement results in the variation of the shareholders rights, it shall be given effect to under the provisions of section 48; (d) if the compromise or arrangement is agreed to by the creditors under sub-section (6), any proceedings pending before the Board for Industrial and Financial Reconstruction established under section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 shall abate; (e) such other matters including exit offer to dissenting shareholders, if any, as are in the opinion of the Tribunal necessary to effectively implement the terms of the compromise or arrangement: Provided that no compromise or arrangement shall be sanctioned by the Tribunal unless a certificate by the company's auditor has been filed with the Tribunal to the effect that the accounting treatment, if any, proposed in the scheme of compromise or arrangement is in conformity with the accounting standards prescribed under section 133. (8) The order of the Tribunal shall be filed with the Registrar by the company within a period of thirty days of the recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in part and in accordance with law. 13. Therefore, it is clear that during the liquidation process, step required to be taken for its revival and continuance of the Corporate Debtor by protecting the Corporate Debtor from its management and from a death by liquidation. Thus, the steps which are required to be taken are as follows: i. By compromise or arrangement with the creditors, or class of creditors or members or class of members in terms of Section 230 of the Companies Act, 2013. ii. On failure, the liquidator is required to take step to sell the business of the Corporate Debtor as going concern in its totality along with the employees. 14. The last stage will be death of the Corporate Debtor by liquidation, which should be avoided. 15. Learned counsel appearing on behalf of the Appellant (Promoter) submitted that the provisions under Section 230 may not be completed within 90 days, as observed in S.C. Sekaran v. Amit Gupta Ors. (Supra). 16. It is further submitted that there will be objections by some of the creditors or members who may not allow the Tribunal to pass appropriate order under Section 230 of the Companies Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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