NCLAT Lawyers | Advocates for National Company Law Appellate Tribunal (NCLAT) in Chennai

Defaulting Promoter: No back door pact – Supreme Court

There is no back door pact for the defaulting promoter: what the Supreme Court court means Clarification by the Supreme Court In connection with the promoter’s participation: In the bank’s liquidation process of bankruptcy will speed up the resolution process. The Supreme Court has decided that the company’s promoter went bankrupt. This was prohibited from offers for their own company under the part of 29A of Insolvency and bankruptcy code (IBC). They are not allowed to use any schemes or settings to get their company control even if it enters into liquidation. What did the Supreme Court say? In the case involving Gujarat NRE Liquidation, the National Law Appellate Tribunal (NCLAT) has been held that everyone who does not meet the requirements, below the part of the 29A IBC, to bid the company, also prohibited from proposing a compromise scheme and setting based on section 230 of the Companies Act. Section 230 of the companies act Section 230 of the companies act allows promoters or corporate creditors to propose a scheme of arrangement or compromise in which company debt can be restructured. In its assessment enforcing the NCLAT decision, The Apex Court said that while section 230 will apply to promoters and creditors in the normal course during the working of the company, it will not apply if the company faces liquidation under the IBC. Compromise based on Section 230 of the 2013 Law “The company must be safe from its management and corporate death. This will lead to real […]