NISHANT
The essence of section 241/242 would be defeated if during the pendency of the petition, the operational or financial creditors are allowed to initiate the corporate insolvency resolution process itself.
NISHANT MEHROTRA 24 Oct 2019

The essence of section 241/242 would be defeated if during the pendency of the petition, the operational or financial creditors are allowed to initiate the corporate insolvency resolution process itself.

NCLAT :: Companies Act, 2013 - Sections 241 and 242 - Tribunal/Appellate Tribunal - Jurisdiction to interfere with Board's decision - The essence of section 241/242 would be defeated if during the pendency of the petition, the operational or financial creditors are allowed to initiate the corporate insolvency resolution process itself.


Held :: If the board of directors, on perusal of the record, finds that there is no money payable or receivable to pay to the operational creditor/ financial creditors to save it from initiation of the corporate insolvency resolution process, the Tribunal or Appellate Tribunal cannot go into commercial wisdom and financial matrix of the company to decide whether a particular asset or one or other asset is required to be sold to satisfy the liabilities of the company. If the salvation for the company is improving liquidity through sale of non-performing assets of the company, including the non-core assets that were proposed to be sold and servicing the territory, it is not open for the Tribunal or the Appellate Tribunal to prohibit the company from taking such decision.


Case:

Atlas Cycles (Haryana) Ltd. and Others

             V.

Mr. Vikram Kapur and Others

Did you find this write up useful? YES 1 NO 0
Send
Featured Members view all

New Members view all

×

C2RMTo Know More

Something Awesome Is In The Work

0

DAYS

0

HOURS

0

MINUTES

0

SECONDS

Sign-up and we will notify you of our launch.
We’ll also give some discount for your effort :)

* We won’t use your email for spam, just to notify you of our launch.