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The liquidator should only take steps under section 230 if the corporate debtor or its business is viable and it is more suitable than selling the corporate debtor as a going concern.It should be done within a stipulated time frame failing which the corporate debtor should be liquidated.Such a process can be initiated at the behest of the CREDITORS where the company is insolvent (a compulsory winding-up) or by the company directors or SHAREHOLDERS, in which case it is known as a voluntary winding-up.The person appointed liquidator, either by the company directors/shareholders or the creditors, sells off the company's ASSETS for as much as they will realize.
In the matter of Y Shivram Prasad v S Dhanapal & Ors, the NCLAT laid down the steps for the revival and continuance of a corporate debtor by protecting it from its management and from a death by liquidation.
The BLRC report stated that, “The committee believes that there is only one correct forum for evaluating such possibilities, and making a decision: a creditors committee, where all financial creditors have votes in proportion to the magnitude of debt that they hold.
In the past, laws in India have brought arms of the government (legislature, executive and judiciary) into this question. The appropriate disposition of a defaulting firm is a business decision, and only the creditors should make it.”From this it can be observed that the NCLT and the NCLAT are not the appropriate authorities to decide the fate of a corporate debtor.
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, relying on the decisions of the Supreme Court in Swiss Ribbons Pvt Ltd & Anr v Union of India & Ors and Meghal Homes Pvt Ltd v Shree Niwas Girni KK Samiti & Ors, the National Company Law Appellate Tribunal (NCLAT) directed the liquidator to sell the assets of the corporate debtor under the terms of section 230 of the Companies Act, 2013, within 90 days.