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

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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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Judgement posted by

FCS Deepak Pratap Singh

Associate Vice President - Secretarial & Compliance (SBI General Insurance Co. Ltd.)

Dear Friends, MyselfFCSDeepak P. Singh ( B.Sc.. LLB, FCS. FIII, CIAFP, CRMP, ID) , A Fellow Member of ICSI, Law Graduate ,Fellow Member of Insurance Institute of India, Certified Independent Director ,Certified Insurance Anti Fraud Professional , Certified Risk Governance Professional ( ICSI-III) and cleared Limited I ... Read more

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