The Liquidator’s Consent
Where the company is in liquidation, the scheme petition cannot proceed without the liquidator’s consent. The liquidator is the custodian of the company’s assets and the representative of the creditors, and the NCLT will not sanction a scheme that the liquidator opposes without a compelling reason. The liquidator’s consent should be obtained in writing and placed before the NCLT.
The Creditors’ Interests
The NCLT must be satisfied that the scheme protects the creditors’ interests. The scheme should provide for the payment of the creditors in full or for a treatment that is no less favourable than what they would receive in the liquidation. The liquidator should obtain the creditors’ views and place them before the NCLT.
The Scheme’s Purpose
A scheme in liquidation typically serves one of two purposes: to revive the company as a going concern, or to transfer its business to a new entity. The NCLT will examine whether the scheme is genuinely in the interest of the stakeholders or whether it is a device to benefit the promoters at the creditors’ expense.
The Liquidator’s Fees and Expenses
The scheme should provide for the liquidator’s fees and expenses, and for the discharge of the liquidator on the scheme’s effectiveness. A scheme that leaves the liquidator’s remuneration unresolved may be adjourned until the issue is settled.
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