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2019 (4) TMI 141 - DELHI HIGH COURTRevival of company - Seeking to permit the applicant and its’ members to clear the dues in terms of the application - authority of person who has made an application seeking scheme of revival - pierce the veil and judiciously X-ray the same - HELD THAT:- This application is filed by an entity whose background is unknown. It is also not clear as to whether it has the support of large number of stated 1127 permanent workers who are working with the respondent company. It is a mandatory provision spelt out u/s 391 of the Companies Act that no order sanctioning any compromise or arrangement shall be made unless the Court is satisfied that the person who has made an application has disclosed to the court all material facts relating to the company such as the latest financial position of the company, the latest auditors report of the accounts of the company, the pendency of any investigations etc. No such relevant information or details or financial statements are forthcoming alongwith the present application. On the bonafide of the petitioner one cannot help noticing that the applicants essentially seek to take over the assets and management of the respondent Company. The scheme envisages reduction of the share capital of the existing shareholders from the value of each share being ₹ 10 to ₹ 1 per share. It seeks allotment of fresh share capital to the ex. employees and to the creditors to the company so that the said fresh allottees would be the majority shareholders. The Company Court has to satisfy itself that the Members or class of members or creditors or class of creditors, as the case may be, were acting bona fide and in good faith. There is nothing to show that the applicant represents the majority of the Ex. workers of the respondent company. He purports to act for and on behalf of a class of creditors, namely, the workers to take over the management of the company. The Scheme seeks to replace the present management by reducing their share capital and allotting shares to the workers/creditors. The scheme can neither be termed to be just, fair or reasonable. The scheme completely lacks bona fide.
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