Non-compliances and irregularities or any illegal act already committed by the Company cannot ratified under umbrella of Scheme of Arrangements

Last updated: 03 December 2022
Quick Summary
The National Company Law Appellate Tribunal (NCLAT) has ruled that existing non-compliances, irregularities, or illegal acts committed by a company cannot be retrospectively approved through a 'Scheme of Arrangements' under the Companies Act, 2013. The NCLAT set aside a previous NCLT order, stating that procedural aspects must be complied with before sanctioning such schemes and directed the company to reverse any actions taken under the flawed arrangement.

Court :
NCLAT

Brief :
The non-compliances and irregularities or any illegal act already committed by the company cannot be ratified under the umbrella of "Scheme of Arrangements" as envisaged under Section 230-232 of the Companies Act, 2013.

Citation :
Ashish O. Lalpuria (Appellant) vs. Kumaka IndustriesLtd. & Ors. (Respondents)- Dated: 20.10.2020[NCLAT]

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