An Exploratory Study on the Legal Interface between Section 230 (CA 2013) and Regulation 2B of the Liquidation Process Regulation

This research explores the complex legal intersection between Section 230 of the Companies Act, 2013, which governs schemes of arrangement and compromise, and Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016, which facilitates such schemes during the liquidation phase of a Corporate Debtor. While the Insolvency and Bankruptcy Code (IBC), 2016 prioritizes the "revival" of a corporate entity, the practical invocation of Section 230 during liquidation often creates a procedural and jurisdictional tug-of-war between the National Company Law Tribunal (NCLT) acting as the Adjudicating Authority under the IBC and its role under the Companies Act. The study investigates the evolution of this interface, beginning with the landmark Swiss Ribbons and Meghal Pipes judgments, which reinforced the sanctity of the "going concern" principle even at the liquidation stage. It further analyzes the legal friction regarding timelines, specifically how the 90-day window provided under Regulation 2B aligns with the overarching objective of time-bound resolution. Key areas of inquiry include: The judicial shift from viewing liquidation as a "corporate death" to a final opportunity for restructuring., The eligibility criteria under Section 29A of the IBC and whether they should strictly apply to proponents of a scheme under Section 230., and The primacy of the IBC’s "overriding effect" (Section 238) versus the procedural requirements of the Companies Act. Through a doctrinal analysis of recent NCLT and NCLAT precedents, this paper concludes that while Regulation 2B serves as a vital bridge for corporate survival, a lack of legislative harmony leads to "liquidation arbitrage." The study suggests a need for a unified regulatory framework to prevent the dilution of the IBC’s core objectives while ensuring that the window for compromise remains a bona fide tool for value maximization rather than a dilatory tactic.