Case Note & Summary
The appeal was filed by the Liquidator of GEI Industrial Systems Ltd. against an order dated 27.04.2026 from the Adjudicating Authority concerning an application made by the Respondent. The application sought to stay the auction of the Corporate Debtor's assets scheduled for 27th April 2026 and to direct the Liquidator to consider the Applicant's scheme of compromise under Section 230 of the Companies Act, 2013. The Adjudicating Authority disposed of the application, directing that the scheme be considered after providing the Applicant a reasonable opportunity and that no further liquidation proceedings, including the auction, should occur until a decision was made. The Appellant's counsel argued that the SCC meeting had prematurely dismissed the scheme due to non-deposit of earnest money, while the Respondent's counsel indicated a willingness to deposit the required amount of Rs. 37,00,00,000/- within 30 days. The Tribunal allowed the Respondent 30 days to deposit the amount, stating that if the deposit was made, the SCC would consider the scheme; otherwise, the Liquidator could proceed with the liquidation process. The appeal was ultimately disposed of with these directions.
Headnote
A) Company Law - Liquidation Process - Consideration of Scheme of Compromise - Companies Act, 2013, Section 230 - The Adjudicating Authority directed the Respondent to consider the Applicant's scheme after providing a reasonable opportunity, and no further liquidation proceedings were to occur until a decision was made. Held that the Respondent was allowed 30 days to deposit the required amount for the scheme's consideration (Paras 3-8).
Issue of Consideration
Whether the Adjudicating Authority's order regarding the auction of assets and consideration of the scheme of compromise was justified.
Final Decision
The Tribunal allowed the Respondent 30 days to deposit Rs. 37,00,00,000/- with the Liquidator for consideration of the scheme, stating that if the amount was not deposited, the Liquidator could proceed with the liquidation process.
Law Points
- Liquidation process
- Scheme of Compromise and Arrangement
- Stakeholder Consultation Committee
- Companies Act
- 2013
- IBBI (Liquidation Process) Regulations
- 2016
