Prakash Oil Depot Vs G. Madhusudhan Rao (NCLAT Chennai)
NCLAT Chennai held that time limit prescribed under Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016 for completing and operationalising scheme of arrangement u/s. 230 of the Companies Act is only directory and not mandatory. Accordingly, extension of further 90 days granted.
Facts- The present appeals are preferred by the Appellants, being aggrieved as against the impugned order of 26.05.2025. By virtue of the impugned order, which was passed by the Tribunal, in the proceedings being carried u/s. 7 of the I & B Code, 2016, had ultimately determined that, the extension of time as prayed for, for the purposes of completing and operationalising the scheme of arrangement proposed and submitted on 25.01.2024 by M/s. Prakash Oil Depot under Section 230 of the Companies Act, 2013, to be read with Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016, cannot be granted extension owing to the failure on part of the Appellant/Liquidator, to comply with the time stipulations as it has been prescribed for completing the scheme proposed u/s. 230 of the Companies Act, 2013, to be read with Regulation 2(B) of the IBBI (Liquidation Process) Regulations, 2016.
Conclusion- Held that it could very well be established and concluded, that since the statute doesn’t create any specific bar under law from seeking an extension of time for enforcement of the scheme of arrangement, the decision to grant such extensions, if it facilitates the enforcement of the scheme, ought to be made permissible, because the provision under Regulation 2(B) of the Insolvency and Bankruptcy Board of India (IBBI) (Liquidation Process) Regulations, 2016, has been held to be directory in nature and not mandatory.
