9911796707
TMI Blog2001 (7) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... y Relief Undertakings (Special Provisions) Act, 1958 "the BRU Act" and AML under the legal umbrella of the BRU Act has tried to compel the applicants to accept the scheme. The bona fides of AML are also placed under a cloud of doubt by the applicants. It is submitted that the applicant-banks being members of a syndicate who have lent huge amounts in foreign currency to AML are entitled to be treated as members of a separate class of secured creditors are quoted at par with other secured creditors who have lent the amount in foreign currency. Certain mala fides are also alleged against AML. 2. The facts of pendency of a civil suit for recovery of the amount in the London Court and the criminal proceedings initiated against AML and the officers of the ICICI are also brought to the notice of the Court. It is pointed out that AML has tried to transfer huge funds to sister concerns (i.e., its subsidiaries) and has tempted the ICICI, a trustee, to be its partner in causing huge loss or damage to the members of the syndicate including the applicant-banks under the sale and lease back transactions which have taken place with the ICICI. The arguments advanced by the applicants can be divid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eign currency to AML and are to be repaid in the same currency. The syndicate who have lent in foreign currency constitute a separate class and AML has at all material times treated the syndicate as a separate class. AML conveniently in the proceedings initiated before this Court has put the members of the syndicate at par with all other secured creditors and also with unsecured creditors. The ICICI which is one of the accused in the criminal complaint filed for breach of trust and fraud played, is also put in the same group with the complainant (Applicants), while constituting a class qua the proceedings which vitally affect their interest. Applicant No. 2 was initially working as facility agent for the syndicate but because of the tactics adopted by AML and under the insulation available to AML under the BRU Notification some of the members of the syndicate of foreign off-shore lenders are not backing the applicants. According to Mr. Diwan, irrespective of this contingency, the applicants have an independent interest and locus to file and maintain the proceedings. 5. It is not the say of the applicants that along with other dissenting creditors of their class they formed a separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a transaction and thereby AML hypothecated by way of first charge over movable assets enlisted in the schedule including the plant, machinery, machinery parts, tools, assessories and other movables, both present and past in AML's pr-emises, godowns at Naroda Road, Ahmedabad, Village Khatraj and Village Santej ranking pari passu with other institutions. An independent mortgage deed dated 30-12-1997, of immovable properties, both present and future situated at Naroda Road, Ahmedabad, Village Khatraj and VillageSantej were also mortgaged in favour of the ICICI as an agent. According to Mr. Diwan, the documents referred to by the applicants including the deed of additional security dated 25-6-1998, executed between the AML and ICICI and the registration of first charge with the Registrar of Companies, Gujarat at Dadra and Nagar Haveli on 22-4-1997 and 22-1-1998, show that syndicate and its members were in a different group of lenders than the other secured creditors including the ICICI. It was the duty obligatory on the part of the ICICI to see that the applicants' dues under the aforesaid facility are made good in US dollars. The applicants were not exposed to any financial exchange ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prohibited from operating the proceeds of the sale. It is contended by the applicants that as per the notes of Exhibit B-I, this is also a case of diversion of funds in the last two years to the extent of Rs. 395 crores and this diversion of funds was taking place at the time when AML was defaulting in payment. 8. According to Mr. Diwan, AML has acted mala fide and suppression of some material facts should be viewed seriously. Lack of bona fides was apparent and the approach of the Court should not be casual. While giving examples as to suppression of material facts, Mr. Diwan has pointed out that the filing of criminal cases against AML and the officers of the ICICI was not brought to the notice of the Court when proceedings were initiated some days or hours prior to the filing of Company Application No. 160 of 2001. The process of criminal cases was served. It is contended that if this fact had been brought to the notice of the Court, the Court might not have passed the ex parte order without affording an opportunity of hearing to the complainant of the criminal cases. By referring to files of the paper-book prepared and supplied to the Court for ready reference, the learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lending the amount do consider various ratings and other political contingencies. Some of the Indian banks have also lent in foreign currency and there is nothing wrong if the members of the syndicate are treated as separate class. He has further submitted that with a view to defeat the say of the off-shore secured creditors, AML has tried to put the applicants in a thin minority by clubbing the members of the syndicate with other secured creditors. The contents of the application are also against the attitude of the AML in treating the secured creditors at par with unsecured creditors in the repayment structure proposed. 10. According to Mr. Diwan, when recalling the order is permissible and the Court has jurisdiction to recall the order passed earlier ex parte, then this is a fit case wherein the said order should be recalled. So far as the jurisdiction of this Court as to recall the order is concerned, the learned counsel Mr. Diwan has placed reliance on four different judgments and has submitted that in view of the facts and circumstances of the case, this Court should allow the application. I would like to refer to some of the judgments relied upon by Mr. Diwan firstly on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Comp. Cas. 705 (SC). 12. I have considered the ratio propounded in the aforesaid judgments, but I would try to deal with these judgments at the appropriate stage. It is also argued by the senior counsel, Mr. Diwan, that this Court exercises equitable jurisdiction and, therefore, if the Court is satisfied that the applicant (AML) of Company Application No. 160 of 2001 had suppressed material aspects or facts, then the equitable relief could be refused and the application can fail only on this count. 13. Pendency of winding up proceedings against AML should be consi-dered when the point of material suppression is to be appreciated. AML has not approached this Court with all fairness is also one of the grievances. It is alleged that AML intends to defeat the cause of the creditors under insulation of the BRU Notification. If the scheme of the BRU Act is looked into and clause (iv) of section 4 is considered, then it could be held that the right to file an application under section 391(1) of the Companies Act was under suspension because of the Notification and, therefore, AML was not entitled to move such an application. AML intends to initiate remedial measures and the same is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 88 of 2000 (Coram: D.A. Mehta, J.), dated 22-2-2001, wherein this Court has observed and held that : "In view of what is stated hereinabove, following the judgment and order dated 8-12-2000 of this Court in Special Civil Application No. 6324 of 2000, this petition is disposed of for the reasons stated in the said judgment and order and subject to the following conditions: In view of the above discussions, the following order is passed : (I)within two months from today, respondent No. 2-company shall make an application to respondent No. 1, i.e, the State Government for consideration by the Gujarat Board for Industrial and Financial Reconstruction (GBIFR). (i)with a proposed rehabilitation scheme that envisages repayment of loans and interest to the petitioners as well as other creditors of respondent No. 2-company and also repayment of dues, if any, of the State Government/Gujarat Electricity Board and all other authorities; (ii)accompanied by the audited accounts of respondent No. 2-company for the preceding two years with the necessary explanation for the auditor's remarks, if any, accompanying the accounts; (iii)accompanied by a demand draft/pay order for an amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or unsecured creditors or some or any of them or up to a particular amount or percentage of dues looking to the amount/s involved and/or for such reasons as the GBIFR may consider just and proper which shall be recorded in writing; ( viii) It will be open to the GBIFR, after giving the affected parties an opportunity of hearing, to come to a conclusion that respondent No. 2-company in question is not a viable sick unit. (III) (i ) The GBIFR shall submit report/s to the State Government at least once in every six months from the date of receiving the application of respondent No. 2-company, reporting about the progress of the rehabilitation scheme and recommending whether to extend or curtail the period of operation of the Notification/s under sections 3 and 4 of the BRU Act: Provided that the GBIFR shall not make any recommendation for granting or refusing such extension without giving an opportunity of hearing to respondent No. 2-company and to the secured creditors, a representative of the unsecured creditors and the representative of workers, employees and officers of respondent No. 2-company; ( ii) It is hereby directed that the State Government shall not here-after renew t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 391(1). During the course of oral arguments, Mr. Soparkar has taken me through the report of the GBIFR. The opening paragraph of the report, which is at Annexure E to Company Application No. 160 of 2001 says that the rehabilitation scheme of AML, Ahmedabad is the result of the order passed by the High Court vide judgment dated 22-2-2001, whereby certain directions were issued and AML in response thereto had approached the Board, i.e., GBIFR. Six, including applicant No. 1 had challenged the validity of the Notification dated 13-6-2000, issued by the Government of Gujarat conferring the status of 'relief undertaking' to AML under the provisions of the BRU Act. The operative part of the order of the High Court is the opening part of the report prepared by the GBIFR. I have considered the contents of the report and the endeavour made by the members of the Board and the persons who had appeared before the Board during the proceedings. The say of the opponent-AML is that AML being one of the largest textile mills in the country and the fact that it has taken over many sick textile industries in the past, the last efforts are made by the GBIFR to see that AML survives and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he members of the syndicate are supporting the scheme. The documents relating to various meetings of off-shore lenders with the other correspondence, according to Mr. Soparkar, do not reveal that the syndicate was treated as a separate class. Merely because the members of the syndicate have lent in foreign currency, their status is not altered and the same remains of secured creditors. The structuring of the meeting when is a matter of privilege of the applicant, the classification cannot be made on different perception. When the same terms are offered, then the creditors can be clubbed in the same group or class. If there is some difference of opinion, then that situation may give rise to a fruitful discussion. Inter se disputes of persons of the same class need not be recognised. Three meetings are classed because, according to the applicants, the terms of offer are in three different sets and common terms of offer by options offered to secured creditors. It is contended that if a group is treated differently, then such group can say that it forms a separate class. In short, it is submitted that when some terms are there, the persons who are offered those terms can be clubbed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y value has increased. The asset ratio of the units at Naroda Road, Khatrej and Santej is shown to have been increased from 2.25 to 2.90 between 31-7-1996, and 31-12-1999. On this aspect, there was a serious debate between the learned counsels for the parties on the issue as to how even after sale of some assets this ratio would increase. But I am doubtful whether it would be relevant or necessary to record a finding since the other side, i.e., AML has submitted that new assets, between this period, are acquired by AML. Though no positive documents as to purchase of such assets are produced, it is, however, also on record that the valuation report prepared by the expert was sent to the syndicate through applicant No. 2 being the representative of the syndicate and the genuineness or correctness of the report was never challenged by any of the members of the syndicate. The entire report is not before this Court, but the covering letter sent to applicant No. 2 is brought before this Court. It is likely that the report of the expert might be containing the details as to the assets newly purchased. Mr. Soparkar has made a statement at the Bar that this ratio has not increased on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and any class of three different classes can disapprove the entire scheme or any part thereof. This Court is not evaluating the genuineness or nitty-gritties of the scheme. The applicants of Company Application No. 160 of 2001 shall have to come before the Court for approval of the scheme and irrespective of the decision or resolution taken at the meeting, this Court is competent to disapprove the scheme or to modify it, considering the say of the objectors. It is the say of AML that considering the historical background as to the formulation of the scheme and the fact that a larger industrial undertaking, a going concern providing employment to around 10,000 persons directly or indirectly to many thousands, when makes such an endeavour, on account of the order passed by this Court while dealing with the writ petition and on the strength of a report prepared by an independent body like GBIFR, should not be turned down in embryo. 24. While developing the arguments on behalf of AML, Mr. Soparkar has placed reliance on some of the judgments on which the applicants have also placed reliance. Over and above, Mr. Soparkar has pointed out that the decision of Hawk Insurance Co. Ltd. [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintainability of Company Application No. 160 of 2001, I was taken through section 4(1)(a)(iv ) and section 3 of the BRU Act. In support of the logic developed by the learned counsel, he has placed reliance on some part of the judgment in D.S. Patel & Co.'s case (supra) 27. The learned counsel appearing for AML has also placed reliance on the same judgment but in reference to the subsequent portion of the paragraph of the judgment cited first, I would like to quote the provisions of the BRU Act referred to by the learned counsel for AML : "Sec. 4. Power to prescribe industrial relations and other facilities temporarily for relief undertakings.-(1) Notwithstanding any law, usage, custom, contract, instrument, decree, order, award, submission, settlement, standing order or other provision whatsoever, the State Government may by Notification in the Official Gazette, direct that- (a)in relation to any relief undertaking and in respect of the period for which the relief undertaking continues as such under sub-section (2) of section 3- ( i)to (iii)** ** ** (iv)any right, privilege, obligation or liability accrued or incurred before the undertaking was declared a relief undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the very object for achieving the statute as enacted." (p. 1130) 29. It is not the case of the applicants that AML is not entitled to double insulation. However, it is simultaneously argued that if the Courts hold that AML is entitled to pursue the remedy under section 391(1), then this application would not have been entertained as the company is pursuing a second parallel remedy. There cannot be and should not be double insulation or cover of protection. If we consider the provisions of section 391(1) and 391(6), the protection is the resultant effect of the entire scheme of the Act. It is not a relief or remedy granted to a company who comes forward with a particular scheme or agreement of compromise but it is the implied effect because of the endeavour made till that exercise is completed. The company which is facing any suit or other proceedings like winding up can proceed with the entire exercise smoothly and effectively. This enactment is also with a purpose to avoid multiplicity of proceedings and further complications including prejudices. Even for the sake of argument, if it is considered as a remedy granted to the applicant-company, then unless there is an express or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assumption that the Notification under section 4 was issued by the State Government at the request or on the prayer made by AML. Even for the sake of argument, if this proposition is accepted, it would not be legal to hold that the issuance of the Notification was a grant of relief by the State in a legal proceeding. So, the submission that AML is not entitled to prosecute two remedies simultaneously is not acceptable. 30. A scheme of arrangement under section 391 is a scheme which requires sanction of the Court. Obviously, therefore, the Court insists on certain formalities being followed so that it can check that the matter is dealt with in a manner which the Court approves. Issuance of summons is the first step where the Court asks to convene the necessary meeting. The Court does not itself consider at this first step the point as to what class of creditors or members should be made parties to the scheme. That is for the company to decide. If the meeting of the proper class has not been held, the Court may not sanction the scheme. 'Class point' mainly touches procedural affairs. This similarity and conflict of interest within the group of secured creditors is highlighted by r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The case of Gujarat Kamdar Sahakari Mandal (supra) is also brought to the notice of this Court. The cases of J.K. Synthetics Ltd. (supra) and S.P. Chengalvaraya Naidu (supra) are relied upon in support of the logic advanced during the course of arguments. But, according to me, the judgment in the case of Sakamari Steel & Alloys Ltd. (supra) rather helps AML than the applicant-banks, because the circumstances which are to be taken into account would vary from case to case. When the prayer to recall the order passed earlier is made, various factors shall have to be examined at the threshold. 33. The Bombay High Court has enumerated around seven such factors. But let me say that this List is descriptive and not exhaustive. In the case at hand, the order is prayed to be recalled on three major counts; firstly, for wrong classification made with ulterior and malice intention; secondly for fraud played by AML under the pretext of sale and lease back transactions, sale of garment business and diversion of funds to subsi-diaries and, thirdly, suppression of many material relevant facts like pendency of criminal complaint, etc. So unless the Court is satisfied to the cause with all sensit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to the Court. Mr. Soparkar while referring to this judgment during the course of his submissions has drawn the attention of this Court to the order passed by the Division Bench of this Court dealing with the OJ appeal filed in the case of Motorol (India) Ltd. (supra). It was dismissed by the Division Bench accepting the say of the objectors that the application for issuing directions to convene the meeting of the creditors has been made is bona fide. The Division Bench has observed that : "application for issuing direction to convene the meeting of the creditors has been made is not bona fide, particularly keeping in view the fact that the same has been made soon on the heels when order for appointment of provisional liquidator was made and a large number of unsecured creditors whose total debts outstanding against the company according to their claims is over Rs. 10 crores representing a substantial amount of unsecured creditors have filed winding up petition are opposing, the same is justified. It is not disputed that the court is not bound to direct convening of a meeting when such application is being made when the court is satisfied that the proposed arrangement is not bon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave affected AML adversely. 38. The decision of J.K. Synthetics Ltd.'s case (supra) would not help the applicants at this stage because in that case it was held that a fraud was played on the Court and the decree obtained by praying fraud is a nullity, is a finding of the Apex Court. So the finding was at the end of all deliberations and not at very early stage of proceedings. The decision in the case of J.K. Synthetics Ltd. (supra) propounds that any Court or the Tribunal has inherent power to do justice and where sufficient cause is established to the satisfaction, the order passed ex parte can be set aside. The Apex Court was dealing with the case of the appellant who had filed a refund claim before the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT). The ratio of this judgment would not help the appliant-banks at this stage. I have considered the ratio of the judgment in the case of G.T. Swamy v. Goodluck Agencies [1990] 69 Comp. Cas. 819 (Kar.) propounded, while appreciating the case of the applicants to appreciate the arguments as to recalling the order. But it would not help the applicants. In the cited case, the Karnataka High Court has propounded the ratio t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the scheme of the Act and the learned judge has referred to a decision of Mr. Justice Eve.... [1934] WN 142. At the relevant point of time, the relevant provision was section 153 of the Companies Act, 1929 [provision just similar to section 391(1) of the Companies Act] and it is held that determination of class, what creditors are summoned for any meeting constituting a class is the privilege of the applicant and, if the meetings are incorrectly convened or constituted or an objection is taken to the presence of any particular creditor as having interests competing with the others, the objection must be taken on the hearing of the petition for sanction of the scheme and the applicant must take the risk of having it dismissed. 41. Palmer while dealing with section 425 (section 391) of the Companies Act says : "A scheme of arrangement under section 425 is a scheme which requires the sanction of the court. For this reason the court insists on certain formalities being followed so that it can check that the matter is dealt with in a manner which the court approves..... The first step is a summons to the court asking the court to convene the necessary meetings....This would be an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consult together with a view to their common interest. It is for the company not the court, to decide on what constitutes a class (although if the company gets it wrong, the court may eventually not approve the scheme). The members of any class can assent individually, to the scheme ( to save the inconvenience of calling a meeting) but there must be at least one class meeting for the court to have jurisdiction under the section." 44. Gower's commentary on section 425(1) of the Companies Act. (Principles of Modern Company Law) says that : "But it will not, at this stage, give directions or make any decisions on what is a class for this purpose. That is the responsibility of the applicants to determine and it can be a difficult task, particularly so far as creditors are concerned. Apart from the obvious distinctions between secured debenture-holders, unsecured lenders and trade creditors, what precisely determines whether or not creditors are of the same 'class'? Nor is it necessarily simple even so far as members are concerned; for in this context 'class' seems to mean something different from what it means elsewhere. The consequences of failing to make a correct determination are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the court and the court will have to consider all objections relating to the scheme at the time of according sanction. The Court below rejected the petition of the official liquidator as if it were one for sanctioning the scheme proposed by him. The prayer in the petition is only for a direction to convene a meeting for considering the proposal. We find no reason why such permission should not be granted. We, therefore, set aside the order of the lower court and direct the appellant to convene a meeting of the members of the company as prayed for by him...." (p. 551) 47. In the case of Osiris Insurance Ltd. [1999] 1 BCLC, Chancery Division (Companies Court) Mr. Neuberger, J. has accepted the principle of Bowen, LJ. and has said that : "in my judgment the decision and observations in Sovereign Life [1892] 2 QB 573 (CA) have to be judged in relation to the facts of that case. The point can, I think, be best understood by reference to the judgment of Bowen, LJ. After referring to the class of persons whose policies had matured and the class of persons whose policies were still extant, he said (page 583): 'The word 'class' is vague, and to find out what is meant by it we must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out first requiring a considerable amount of personal information from individual shareholders a wholly unworkable, and highly undesirable, situation." 48. The ratio of the judgment in the case of Miheer H. Mafatlal (supra) is also relevant and important qua the facts of the case on hand. I would like to quote the following observations as under : "...However, it is vehemently, contended by learned counsel for the appellant that because of the family arrangement of 1979 on which he relies he was a special class of minority equity shareholder who had separate rights against the director of the company and whose special interest because of the pending litigation between him and the director, Shri Arvind Mafatlal was likely to be adversely affected by the scheme, therefore, a separate meeting had to be convened as he represented a class within the class of equity shareholders. It is difficult to agree with this contention. Even though the Companies Act or the articles of association do not provide for such a class within the class of equity shareholders, in a given contingency it may be contended by a group of shareholders that because of their separate and conflicting interests vis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has not been able to make out a case for holding a separate meeting of the dissenting minority equity shareholders represented by him. The fourth point for determination, therefore, is answered in the negative."... (p. 832) I would like to quote the following para from the case of Gujarat Kamdar Sahakari Mandal (supra) which according to me is relevant : "(vi)Keeping the aforesaid factors in mind the Court shall have to proceed to examine the scheme. However, the examination of the scheme at this stage is not like a harping critic, like hair-splitting expert or like a meticulous accountant. The Court has initially to see as to whether the scheme is fair or not. Unless the scheme is effectively shown to be unfair, the Court shall be slow to reject the scheme at the outset as its approach should be in favour of reviving industry rather than closing it down. The Court also shall have to keep in mind that by granting an application under section 391(1) initially it is opening a ground of negotiation, discussion and deliberation and exchange of views about the scheme, arrangement or compromise, thereby providing an opportunity to affected interests to ventilate and exchange their v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured creditors who have first pari passu charge on the movable and/or immovable properties of AML. It would not be proper to comment at this stage upon whether sale and lease back transactions which have taken place between the AML and the ICICI on interpretation of nature of charge after obtaining legal opinion was correct or not, otherwise it may seriously prejudice the interest of either of the parties. I would like to quote certain observations from the cases of Travancore National & Quilon Bank (supra) and Maneckchowk & Ahmedabad Mfg. Co. Ltd. (supra). In the first decision, the jurisdiction of the British Court was considered when the application for sanction of the scheme was moved and the maintainability of the scheme was challenged. Ultimately, the wish of the creditors is to be ascertained. Statutory requirement as to the ratio of the majority takes care of entire all other relevant aspects. While dealing with the facts of the case, the Madras High Court has observed that : "There are other minor objections raised such as the differentiation between creditors, that is, those whose demands have to be immediately met and those whose demands can be deferred. But they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure to circulate them. I am not prepared to say that of this scheme because the scheme is open to modification. But the court has always got a duty to see that before the scheme is approved such correct information as is available should be placed before the creditors before they come to a decision...." (p. 38) I would also like to quote the observations of this Court in the case of Maneckchowk & Ahmedabad Manufacturing Co. Ltd. ( supra) which reads as under : "It is always a moot question what constitutes a class. Buckley on the Companies Acts, 13th edition, page 406 has observed that it is a formidable difficulty to say what constitutes a 'class' of creditors. The creditors composing the different classes must have different interests. When one finds a different state of fact existing among different creditors which may differently affect their minds and their judgment, they must be divided into different classes. 'Class' must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest (vide Sovereign Life Assurance Co. v. Dodd [1892] 2 QB 573 (CA). Speaking very generally, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editors and the Court may proceed to examine the result of the voting as if two separate meetings are called. A view was taken by me in the case of Anant Mills Ltd. (unreported). If any creditor present at the said meeting would have said that the presence of the distinct class of creditors was either oppressive or not conducive to their deliberations, all such objections could have been examined on merits. No such objection is raised. The defect as far as the meeting of unsecured creditors is concerned, appears to be that the preferential and other unsecured creditors have been grouped together. The workers are preferential creditors in winding up but not otherwise who would form a separate class. Instead of remitting the scheme to separate meetings of unsecured and preferential creditors in my opinion, there is ample material in the report of the Chairman from which the votes in number and value representing the preferential creditors can be separated from the votes and value of the votes representing the other unsecured creditors. As this is quite possible and which would be worked out while considering the ground of attack that the scheme is not approved by a statutory majority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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