Section 230 of the Companies Act, 2013 is a complete code in itself and the explanation to Section 230 of the Companies Act, 2013 expressly and categorically states that the provision of Section 66 shall not apply to the reduction of share capital effected in pursuance of the order of the Tribunal under Section 230 of the Companies Act, 2013 – Ratnagiri Gas and Power Pvt. Ltd. & Anr. Vs. Purshottam Mareshwar Vartak & Anr.- NCLAT New Delhi
February 28, 2018
The Tribunal held that modified Scheme cannot be sanctioned without complying with the Section 66 of the Companies Act, 2013, or at least without obtaining fresh consents from the shareholders and creditors of the Appellant Companies. Learned Senior Counsel for the Appellant has rightly pointed out that the Tribunal failed to consider that Section 230 of the Companies Act, 2013 is a complete code in itself and the explanation to Section 230 of the Companies Act, 2013 expressly and categorically states that the provision of Section 66 shall not apply to the reduction of share capital effected in pursuance of the order of the Tribunal under Section 230 of the Companies Act, 2013. In any event, in view of the express powers conferred under Section 231(1)(b) of the Companies Act, 2013, taking into consideration the stand taken by the Appellant Companies that the secured lenders had also supported the modified Scheme and such modification would not prejudice their interests, it was open to the Tribunal to sanction the Scheme if necessary by exercising its power to modify the Scheme.