Successful bidder cannot withdraw offer: NCLAT

Why is it in news?
  • The National Company Law Appellate Tribunal (NCLAT) has said that once a resolution plan for a debt-ridden company is approved by the lenders, the successful bidder cannot be permitted to withdraw its offer.
More from NCLAT:
  • The sanctity of the resolution process has to be maintained.
  • The withdrawal by a successful bidder ‘frustrates’ the entire exercise of Corporate Insolvency Resolution Process.
  • There is also no express provision in the Insolvency & Bankruptcy Code to allow any successful resolution applicant to ‘stage a U-turn’.
About NCLT and NCLAT:
  • The National Company Law Tribunal (NCLT) is a quasi-judicial body in India adjudicating issues concerning companies in the country.
  • It was formed in 2016, as per the provisions of the Companies Act 2013 (Section 408) by the Indian government.
  • National Company Law Appellate Tribunal (NCLAT) was constituted under Companies Act, 2013 for hearing appeals against the orders of (NCLT).
Posted by Jawwad Kazi on 3rd Oct 2020
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