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2012 (8) TMI 1123 - BOMBAY HIGH COURTPower of Tribunal - Seeking to recall the order sanctioning of a compromise or an arrangement - prejudicial Of the interest - HELD THAT:- The power of the Court to enforce the compromise and arrangement which is sanctioned under Section 391 of the Companies Act is prescribed/set out u/s 392 of the Companies Act. It has clearly empowered the Court to give directions and allow modifications in the compromise or arrangement but has not given any powers to the Court to recall/rescind/cancel the order sanctioning the compromise or arrangement. If at all the Court is satisfied that the compromise or arrangement sanctioned u/s 391 cannot be worked satisfactorily with or without modifications, the Court can suo motu or on the Application of any person interested in the affairs of the Company make an order winding up the Petition. In fact, in view of the decision of the Hon'ble Supreme Court in Meghal Homes (P.) Ltd.[2007 (8) TMI 447 - SUPREME COURT], it is now well settled that if a Company desires to modify a sanctioned scheme despite the same not being necessary for the proper working thereof, the Company cannot do so under any other provisions except by following the required procedure prescribed u/s 391 of the Companies Act. As submitted on behalf of the Regional Director, even on facts no case is made out for recalling of the order sanctioning the scheme. The reason cited by the Company for seeking to recall the order sanctioning the scheme is essentially that the Scheme is not workable and is adversely affecting the interests of the Companies. Apart from the fact that this can hardly be a ground for seeking cancellation of the scheme at this stage, not a single piece of evidence is produced before this Court to show that the contracts already entered into by the Demerged Company with their clients have been cancelled by the said clients or that they have refused to allow the Resulting Company to execute and complete the said contracts. There is nothing produced on record to even show that any of the proposed clients have refused to deal with the Resulting Company because the name of the Resulting Company does not include anything about the Facility Management Services or because the proposed clients are revaluating the entire process of the Resulting Company in terms of net worth, technical know how, qualification, ability to perform such contracts etc. In any event, all these factors were surely considered by the applicants before proposing the scheme of arrangement and inter alia stating therein on oath that the said scheme is in the interest of the Company and its shareholders. Again, in any event if the scheme is not workable then the Company can certainly seek directions or modifications to the scheme in order to make it workable. It cannot cancel the scheme on this ground. However, if the Applicants are determined to have the scheme rescinded/cancelled, in view of the facts and law set out hereinabove, they will have to follow the procedure prescribed u/s 391 of the Companies Act and revert back to status quo ante. Thus, both the Applications are dismissed.
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