Case Note & Summary
The appeal was filed by Idulupati Srinivasa Rao, Director of ISR Infra Pvt Ltd, challenging an order from the Adjudicating Authority that rejected a scheme under Section 230 of the Companies Act due to non-compliance with the 90-day period stipulated in Regulation 2B(1) of the Liquidation Process Regulations. The Tribunal noted that in a previous case, M/s. Prakash Oil Depot Vs. G. Madhusudhan Rao, it had held that the 90-day period is directory rather than mandatory. The respondent, the sole financial creditor, indicated that the proposal might need to be routed through the SCC. The Tribunal decided to follow the precedent set in the Prakash Oil Depot case regarding the interpretation of the 90-day period. It allowed the appeal, set aside the previous order, and remanded the matter back to the SCC for further compliance with statutory requirements.
Headnote
A) Company Law - Liquidation Process - Directory vs Mandatory Provisions - Companies Act, 2013, Section 230 - The Tribunal determined that the 90-day period prescribed in Regulation 2B(1) is directory and not mandatory, referencing a prior decision in M/s. Prakash Oil Depot case. The appeal was allowed, the order was set aside, and the matter was remanded back to the appropriate authority for compliance with statutory requirements (Paras Not mentioned).
Issue of Consideration
Whether the period of 90 days as stipulated in Regulation 2B(1) of the Liquidation Process Regulations is directory or mandatory.
Final Decision
The Tribunal allowed the appeal, set aside the order of the Adjudicating Authority, and remanded the matter back to the SCC for compliance with statutory requirements.
Law Points
- Companies Act
- Liquidation Process Regulations
- directory vs mandatory provisions
