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Tutorial-3 Scheme of rehabilitation and Winding up.
Tutorial-3 Scheme of rehabilitation and Winding up.
In the previous article we talked, the tribunal shall appoint an interim administrator which will be responsible for drafting the rehabilitation scheme along with management. A scheme for revival and rehabilitation shall be prepared by the company administrator as per the provision of section 261. The scheme shall include the following measures.
Scheme shall include measures like financial reconstruction of the sick company, proper management of the sick company, amalgamation of the sick company with other company or other company with the sick company, takeover of the sick company by solvent company, sale or lease of a part of any assets, rationalization of managerial personnel, such other preventive measure as may be necessary.
The scheme shall be sanctioned as per section 262 of the Act and shall be binding on the party and shall be implemented by the tribunal by taking all necessary steps.
Winding up of Company on the report of company administrator
As per the provisions of the section 263of the Act, the company shall be wound up if the scheme is not approved by the creditors and the administrator shall submit the report within fifteen days and the tribunal shall order for the winding up of the company.
Rehabilitation and Insolvency Fund
A fund shall be formed under section 269 of the Act which shall be called as the Rehabilitation and Insolvency Fund for the purposes of revival, rehabilitation, and liquidation of the sick companies.
Conclusion
Thus, the Companies Act provides exhaustive measures for the revival and rehabilitation of the sick companies and the tribunal is vested with powers to take all necessary measures for the revival and rehabilitation of the sick companies.
