What is Scheme of revival and rehabilitation? What is sanction of scheme? What is the meaning of scheme to be binding? Section 261, 262 and 263 of Indian Companies Act 2013

Scheme of revival and rehabilitation, Sanction of scheme and Scheme to be binding are defined under Section 261, 262 and 263 of Indian Companies Act 2013. Provisions under these Sections are:

Section 261 of Indian Companies Act 2013 "Scheme of revival and rehabilitation"

(1) The company administrator shall prepare or cause to be prepared a scheme of revival and rehabilitation of the sick company after considering the draft scheme filed along with the application under section 254.

(2) A scheme prepared in relation to any sick company under sub-section (1) may provide for any one or more of the following measures, namely: -

(a) the financial reconstruction of the sick company;

(b) the proper management of the sick company by any change in, or by taking over, the management of such company;

(c) the amalgamation of -

 

(i) the sick company with any other company; or
(ii) any other company with the sick company;
(d) takeover of the sick company by a solvent company;
(e) the sale or lease of a part or whole of any asset or business of the sick company;
(f) the rationalisation of managerial personnel, supervisory staff and workmen in accordance with law;
(g) such other preventive, ameliorative and remedial measures as may be appropriate;
(h) repayment or rescheduling or restructuring of the debts or obligations of the sick company to any of its creditors or class of creditors;
(i) such incidental, consequential or supplemental measures as may be necessary or expedient in connection with or for the purposes of the measures specified in clauses (a) to (h).

Section 262 of Indian Companies Act 2013 "Sanction of scheme"

(1) The scheme prepared by the company administrator under section 261 shall be placed before the creditors of the sick company in a meeting convened for their approval by the company administrator within the period of sixty days from his appointment, which may be extended by the Tribunal up to a period not exceeding one hundred twenty days.

(2) The company administrator shall convene separate meetings of secured and unsecured creditors of the sick company and if the scheme is approved by the unsecured creditors representing one-fourth in value of the amount owed by the company to such creditors and the secured creditors, representing three-fourths in value of the amount outstanding against financial assistance disbursed by such creditors to the sick company, the company administrator shall submit the scheme before the Tribunal for sanctioning the scheme:

Provided that where the scheme relates to amalgamation of the sick company with any other company, such scheme shall, in addition to the approval of the creditors of the sick company under this sub-section, be laid before the general meeting of both the companies for approval by their respective shareholders and no such scheme shall be proceeded with unless it has been approved, with or without modification, by a special resolution passed by the shareholders of that company.

(3) (i) The scheme prepared by the company administrator shall be examined by the Tribunal and a copy of the scheme with modification, if any, made by the Tribunal shall be sent, in draft, to the sick company and the company administrator and in the case of amalgamation, also to any other company concerned, and the Tribunal may publish or cause to be published the draft scheme in brief in such daily newspapers as the Tribunal may consider necessary, for suggestions and objections, if any, within such period as the Tribunal may specify.

(ii) The complete draft scheme shall be kept at the place where registered office of the company is situated or at such places as mentioned in the advertisement.

(iii) The Tribunal may make such modifications, if any, in the draft scheme as it may consider necessary in the light of the suggestions and objections received from the sick company and the company administrator and also from the transferee company and any other company concerned in the amalgamation and from any shareholder or any creditors or employees of such companies.

(4) On the receipt of the scheme under sub-section (3), the Tribunal shall within sixty days therefrom, after satisfying that the scheme had been validly approved in accordance with this section, pass an order sanctioning such scheme.

(5) Where a sanctioned scheme provides for the transfer of any property or liability of the sick company to any other company or person or where such scheme provides for the transfer of any property or liability of any other company or person in favour of the sick company, then, by virtue of, and to the extent provided in, the scheme, on and from the date of coming into operation of the sanctioned scheme or any provision thereof, the property shall be transferred to, and vest in, and the liability shall become the liability of, such other company or person or, as the case may be, the sick company.

(6) The Tribunal may review any sanctioned scheme and make such modifications, as it may deem fit, or may by order in writing direct company administrator, to prepare a fresh scheme providing for such measures as the company administrator may consider necessary.

(7) The sanction accorded by the Tribunal under sub-section (4) shall be conclusive evidence that all the requirements of the scheme relating to the reconstruction or amalgamation or any other measure specified therein have been complied with and a copy of the sanctioned scheme certified in writing by an officer of the Tribunal to be a true copy thereof shall in all legal proceedings be admitted as evidence.

(8) A copy of the sanctioned scheme referred to in sub-section (4) shall be filed with the Registrar by the sick company within a period of thirty days from the date of receipt of a copy thereof.

Section 263 of Indian Companies Act 2013 "Scheme to be binding"

On and from the date of the coming into operation of the sanctioned scheme or any provision thereof, the scheme or such provision shall be binding on the sick company and the transferee company or, as the case may be, the other company and also on the employees, shareholders, creditors and guarantors of the said companies.

What is Scheme of revival and rehabilitation? What is sanction of scheme? What is the meaning of scheme to be binding? Section 261, 262 and 263 of Indian Companies Act 2013

What is Implementation of scheme? What is winding up of company on report of company administrator? Section 264 and 265 of Indian Companies Act 2013

What is Power of Tribunal to assess damages against delinquent directors, etc? What are the Punishment for certain offences? Section 266 and 267 of Indian Companies Act 2013

What is Bar of jurisdiction? What is Rehabilitation and Insolvency Fund? What are the Modes of winding up? Section 268, 269 and 270 of Indian Companies Act 2013

What is Circumstances in which company may be wound up by Tribunal? What is petition for winding up? What are the powers of Tribunal? Section 271, 272 and 273 of Indian Companies Act 2013

What is Directions for filing statement of affairs? What is Company Liquidators and their appointments? Section 274 and 275 of Indian Companies Act 2013

What is Removal and replacement of liquidator? What are the rules to give Intimation to Company Liquidator, provisional liquidator and Registrar? Section 276 and 277 of Indian Companies Act 2013

What is Effect of winding up order? What is stay of suits, etc., on winding up order? What is the Jurisdiction of Tribunal? Section 278, 279 and 280 of Indian Companies Act 2013

 

 

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