Section 61 of LLP Act, 2008 : Section 61: Power Of Tribunal To Enforce Compromise Or Arrangement

Explanation using Example

Imagine a scenario where XYZ Design LLP, a limited liability partnership specialized in architectural services, is facing financial difficulties and proposes a compromise with its creditors to restructure its debt. Let's say the creditors agree to reduce the debt by 30% if XYZ Design LLP can ensure timely payments of the remaining amount over the next five years.

The proposed compromise is presented to the Tribunal, which under the Limited Liability Partnership Act, 2008, sanctions the arrangement. As per Section 61:

• The Tribunal now has the authority to oversee the implementation of this debt restructuring plan to ensure that XYZ Design LLP adheres to the agreed terms.
• If the Tribunal finds it necessary, it can issue directions or make modifications to the compromise to facilitate a smooth operation of the arrangement. For instance, if after a year it's evident that the repayment terms are too stringent and XYZ Design LLP is unable to meet them, the Tribunal might extend the repayment period.

If despite the Tribunal's supervision and potential modifications, XYZ Design LLP still fails to comply with the terms and the compromise is not working, the Tribunal has the power to order the winding up of the LLP. This would be considered as if the winding up order was made under Section 64 of the Act, leading to the dissolution of XYZ Design LLP.