# Power of Tribunal to Enforce Compromise or Arrangement [Section 61]

## Supervisory Power [S.61(1)]

Once the Tribunal sanctions a compromise / arrangement under Section 60, it has the power to:

(a) Supervise the carrying out of the compromise; and
(b) Give directions / make modifications — either at the time of the sanctioning order OR at any time later — as it considers necessary for the proper working of the compromise.

Translation: The Tribunal is not done after sanctioning — it can step in mid-implementation to fine-tune.

## When the Compromise Cannot Work [S.61(2)]

If the Tribunal is satisfied that the compromise cannot be worked satisfactorily (with or without modifications), it may:

On its own motion, OR
On application of any person interested in the LLP's affairs,

make an order for winding up the LLP.

### Status of such Winding-Up Order

Such an order is deemed to be an order under Section 64 (winding up by Tribunal).

## Key Takeaway

S.61 gives the Tribunal both fine-tuning power (supervise and modify) and a kill-switch (order winding up if the compromise fails).

Worked example

### Example 1

Example 1 (Supervision): Tribunal sanctioned a compromise where ABC LLP agreed to pay creditors over 3 years in instalments. After 1 year, the LLP defaults. Tribunal, exercising power under S.61(1)(b), may modify the schedule to allow a longer tenure or direct sale of specified assets to fund payments.

### Example 2

Example 2 (Winding up under S.61(2)): After 18 months, the Tribunal is satisfied that the scheme cannot work even with extensions. On a creditor's application, the Tribunal orders winding up of the LLP. This order is deemed to be under S.64 of the LLP Act.

⚠️ Common exam mistakes

Thinking the Tribunal becomes 'functus officio' after sanctioning the compromise — it does not; it retains supervisory power.
Forgetting that under S.61(2), the Tribunal can act on its OWN motion, without any application.
Missing the linkage — winding up under S.61(2) is deemed to be under S.64.

Bare-Act text Section 61 · Limited Liability Partnership Act, 2008 · click to expand

Section 61 — Power of Tribunal to enforce compromise or arrangement: (1) Tribunal sanctioning a compromise/arrangement under S.60 shall have power to supervise its carrying out and may give such directions or make modifications as it considers necessary. (2) If satisfied that the compromise cannot work satisfactorily, Tribunal may, on its own motion or on application, order winding up of the LLP; such order shall be deemed to be under S.64.

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Power of Tribunal to Enforce Compromise (Section 61)

Worked example

⚠️ Common exam mistakes