The Supreme Court on Tuesday (February 24) held that a defunct Scheme of Arrangement under the Companies Act cannot stall the Corporate Insolvency Resolution Process proceedings under the Insolvency & Bankruptcy Code, 2016.
A bench of Justices Sanjay Kumar and K Vinod Chandran set aside the NCLAT’s decision, which had kept in abeyance the CIRP initiated under Section 7 of IBC against the corporate debtor, merely because the Scheme of Arrangement was pending before the High Court.
“…we find no reason to stall the proceedings for initiation of the CIRP by resorting to the provisions of the IBC, as has been now attempted by the appellant herein, which would ensure rehabilitation of the Company.”, the court observed, while allowing…