Ketan C Bagadia Vs Radhakrishnan Dharmarajan (NCLAT Chennai)
NCLAT Chennai held that delayed filing of scheme of compromise u/s. 230 of the Companies Act cannot be condoned since there was no procedural flaw in conducting the auction till the stage it was finalized by the issuance of the sale certificate.
Facts- Vide the present appeal, the appellant Ketan C Bagadia, had prayed to declare the Auction notice dated 20.05.2023 issued by the Respondent and consequent proceedings/ sale under the aforesaid Auction Notice as null and void and condone the delay in submitting the scheme under Section 230 of the Companies Act, 2013 mandated under Regulation 2B of IBBI (Liquidation process) Regulations, 2016 and consequently, permit the Applicant to provide a scheme of Compromise under Section 230 of the Companies Act.
Conclusion- Held that owing to the specific stand taken by the Respondent that there was no procedural flaw, coupled with the fact that the question of considering the so-called proposal under Section 230 of the Companies Act, 2013, since having been filed belatedly could not have created at all any obstacle as such for the Respondent from discharging his statutory function of the completion of the liquidation process particularly when the Stakeholders Committee in the SCC meeting, has categorically rejected the said scheme. Owing to the fact that the valuation was already done by the Respondent in terms of the provisions of the code and the regulations, since there was no procedural flaw established by the Appellant to have chanced, in conducting the auction till the stage it was finalized by the issuance of the sale certificate on 17.07.2023, and since apparently, and admittedly too, the proposal of the scheme under Section 230 of the Companies Act, 2013, was preferred by the Appellant at a much belated stage, there was no error on part of the liquidator to proceed further to finalize the liquidation process by auctioning the property which had now attained finality after the distribution. Hence the Company Appeal (AT) (CH) (Ins)No.36/2025 lacks merit and the same is accordingly “dismissed”.
