TMI Blog1948 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt directed, to consider a scheme of arrangement prepared by the directors of the company. Being satisfied that there were good reasons for accepting the prayer of the bank I ordered that the meetings of the directors and the members of the bank be held at Delhi on 25th January, 1948, and the wishes of the depositors and the members of the bank be ascertained in respect of the scheme put forward by the management. The reports of the respective chairmen who presided over the meetings were that the scheme in question with slight modifications was adopted in the meeting of the depositors by over whelming majority and in that of the members unanimously. When the case came up before me on 25th February for consideration of the scheme, only two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e persons concerned, including the creditors and members, only if it is sanctioned by the Court. The words of the section leave no doubt that the sanction of the Court is not a formal matter. On the other hand, it appears to be the duty of the Court to go into the whole matter carefully and to find out (1) whether all the provisions of law and the directions of the Court itself in so far as they relate to the holding of the meeting, the conduct of the proceedings of the meeting and the record of majority votes, etc. have been fully complied with, and ( ii ) whether the scheme is in the interest of the company as well as in that of its creditors and should be given effect to. Reference in this connection may be made to the following observat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain percentage of the debts due to the depositors and other creditors should be written off and in lieu thereof the creditors be allotted shares in the bank. The second important provision is that the present management of the bank should be maintained. As regards the firse, since I am satisfied that both the mettings were properly held and all the directions given by me and all the relevant provisions of the law pertaining to the holding of the meetings etc. were complied with, I do not think I am justified in going into the reasons which led the creditors, who were present in the meeting, to agree to give up a part of their debts. I am strengthened in this view by the remarks made by Lindley, L.J., in the second of the two cases cite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to make genuine efforts in this direction. On careful consideration of the detailed statements which the secretary of the bank made before me and the balance-sheet and other papers that have been placed on record under my orders the impression that I have formed of the directors is that they were very scrupulous in managing the affairs of the bank at a very critical time. One thing, which struck me as very significant, is that though the directors were aware that the bank was facing a real crisis and there was the danger of the value of the assets of the bank going down considerably, the majority of them allowed the bulk of their deposits with the bank to remain intact. I examined the secretary regarding the expenses that the bank has inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( c )the expenses incurred by the bank over and above the usual expenses on the establishment; and ( d )the total amount disbursed amongst the creditors during the period under report. ( 4 )That a copy of the balance-sheet when ready and adopted by the members of the company be submitted to this Court. (5)That the auditors of the bank be appointed with the approval of the Court. (6)That the present directors will co-opt with the approval of this Court one of the creditors as a co-director with them and the said director will in addition to his ordinary duties supervise over the day to day working of the bank. The directors will submit their nomination to this Court within a month and the question relating to the remuneration of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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