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2013 (9) TMI 452 - CALCUTTA HIGH COURTOrder for Convening Meeting - Whether notice to the Central Government shall be given on an application u/s 391 (1) moved by way of judges summons, ex parte before issuing an order convening a meeting of the creditors or class of creditors or members or class of members - Whether at the initial stage of moving the judges summons ex parte or after direction for convening the meeting of the creditors or class of creditors or the members or its classes – Held that:- The facts narrated in the application and the scheme proposed does not envisage the invocation of the provision of Section 394A before convening the meeting and this Court – the application was disposed by giving the directions as to how the meeting is to be conducted. The Company Court does not act as a Court of an appeal and was equally not expected to put it seal of an approval on the scheme, either the majority of the shareholders have voted in favour of the Scheme or the Company Law Board or the Registrar or the Official Liquidator has not put any adverse report - The provision cannot have the restricted applicability at the post meeting stage but can be applied before passing any order as contemplated under Section 391 or 394 of the said Act. It cannot be said that the provisions contained under Section 394A of the Companies Act can only be resorted after convening the meeting or before passing the final order either sanctioning or refusing to sanction the scheme - The said provision can be pressed at any stage on an application being moved under Section 391 or 394 of the Act depending upon the facts of the each case - Recourse to Section 394A of the Act should not be readily adopted the moment, the application was moved but certainly should be adopted before sanctioning the scheme. Section 391 of the Companies Act provides the sanctioning of the scheme by the Court, provided; the Court is satisfied that an application made under the said provisions contains all disclosure of material facts relating to the Company namely the latest financial position of the Company, latest auditor's report on accounts of the Company and pendency of any investigation proceeding in relation to the Company. At the time of promulgating the Companies Act, 1956, Section 394A was not incorporated but was subsequently inserted by Act 31 of 1965 with effect from 15th October, 1965. By virtue of Sub-section 1 and 2 of Section 643 of the Companies Act, 1956, the Companies (Court) Rules 1959 was framed by the Supreme Court of India and assumes the Act of parliament. The said rule came into force on and from 1st day of October, 1959. Rule 67 & 68 of the said rules provide for moving the application by way of judges summons ex parte, unless an application is taken out other than the Company. In such event, the copy of the summons and the affidavit in support of the said judges summons shall be served on the Company or where the Company is being wound up on its liquidator, not less than 14 days before the date fixed for hearing of the summons. Rule 69 of the said rules contains the provisions relating to the directions at the hearing of the judges summons which further provides that upon hearing on the day when it is moved ex parte or any adjourned date, the Court can dismiss the summons. One of the directions as enshrined under Rule 69 of the said rules contains the fixation of time and place of meeting or meetings of the creditors or class of the creditors and/or member or the class of the members relating to the proposed compromise or arrangement.
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