C Ganesh Vs Ashok Seshadri (NCLAT Chennai)
NCLAT Chennai grants extended period of 60 days to make full and final payment for execution of Scheme of Arrangement. Accordingly, order is quashed and extension of 60 days is allowed.
Facts- In the instant Company Appeal, the Appellant challenges the impugned order dated 02.06.2025, which was rendered by NCLT, Chennai, in IA(IBC)/2232(CHE)/2024, which was preferred in CP/332/2019, being an application, which was filed by invoking the provisions contained under Section 60(5) of I & B Code, 2016, seeking for an extension of time for the purposes of making deposit of the balance amount, that was due to be paid for the execution of Scheme of Arrangement. By virtue of impugned order, the said application was rejected and as a consequence thereto, it had resulted into the cancellation of the Scheme of Arrangement that, was entered into between the parties as per provisions contained under Section 230-232 of the Companies Act, 2013.
Conclusion- Held that owing to the basic objective, which could be discernible from the provision contained under Section 231(1)(b) of Companies Act, we are of the opinion that, where the settlement is a process contemplated under law and where the scheme has been approved by the Learned Adjudicating Authority, in order to effectively resolve the controversy on vital issues between the parties, this will be a fit case to exercise our power which is reserved to be exercised by us under Section 231(1)(b), which has been extracted above, since it gives ambit of authority to the Tribunal, as well as the Appellate Tribunal to pass any orders or to make any such modifications, which may be necessary under/facts of a case to carry on the necessary steps for ensuring the implementation of the Scheme of Arrangement. Looking into the time constraints, delayed filing with ROC and the other contributing factors resulting to the delayed payment, this will be a fit case where we could exercise our discretion of extension of time. Owing to the above, the Company Appeal (AT) (Ins) No.361/2025 is allowed. The impugned order dated 02.06.2025 is hereby quashed, and IA(IBC)/2232(CHE)/2024, would stand allowed, and as a consequence thereto, further 60 days time is granted to the Appellant to make full and final payment, including the additional expenditures and the interest which would have accrued during this period along with the liquidation charges, within a period of 60 days from the date of uploading of the order.
