The phrase “may” used in Section 233(5) of the Companies Act, 2013 will have to be construed as mandatory | It is mandatory for the Central Government to make an application before the Tribunal/NCLT and get adjudication if Merger or Amalgamation Scheme is not in public interest or in the interest of the Creditors – Asset Auto India Pvt. Ltd. and Ors. Vs. The Union of India and Ors. – Bombay High Court

Hon’ble Bombay High Court (Division Bench) interprets that on a conjoint reading of sub-sections (2), (3), (4) and (5), the phrase “may” used in sub-section (5) of Section 233 of the Companies Act, 2013 will have to be construed as mandatory. Because if the Government is of the view that the scheme is not in the public interest or in the interest of the creditors then same is to be decided by the Tribunal. If the phrase “may” in sub-section (5) is used as optional then company involved in the amalgamation scheme would be at the mercy of the Central Government if the scheme is rejected without any adjudication. It is, therefore, mandatory for the Central Government to make an application before the Tribunal and get adjudication on said issue.

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