TMI Blog2019 (4) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... not 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. - CO.PET. 516/2012 - - - Dated:- 20-3-2019 - MR. JAYANT NATH J. Mr. Kunal Sharma, Adv. for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncelled and extinguished by orders of this court. For fresh capital, dues payable to the employees may be used for purchase of equity shares capital of the company. Based on the above, it is pleaded that the present share capital of ₹ 9,53,40,000/- would be reduced to ₹ 95,34,000/-. There will be fresh allotment of share to employees and creditors of the company of total shares worth ₹ 11,04,66,000/-. Hence, the share capital would be as follows:- SHARE CAPITAL a) PRESENT SAHRE CAPITAL RUPEES 9534000 shares of ₹ 10/- each 9,53,40,000 b) REVISED SHARE CAPITAL i) Present Value per share after reduction of capital by this ___________ Hon'ble Court to ₹ 1 per share ii) Fresh allotment to Employees creditors of the Company 95,34,000 Total Share Capital- 12000000 equity 11,04,66,000 shares of ₹ 1/- each. 12,00,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them; or (b) between a company and its members or any class of them; the Court may, on the application of the company or of any creditor or member of the company, or, in the case of a company, which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Court directs. (2) If a majority in number representing three- fourths in value of the creditors, or class of creditors, or members, or class of members as the case may be, present and voting either in person or, where proxies are allowed 1 under the rules made under section 643], by proxy, at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the Court, be binding on all the creditors, all the creditors of the class, all the members, or all the members of the class, as the case may be, and also on the company, or, in the case of a company which is being wound up, on the liquidator and contributories of the company: Provided that no order sanctioning any compromise or arrangement shall be made by the Court unles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections of creditors who opposed the scheme in each case are also well founded. It is, however, left to the parties interested to apply for winding-up orders which may be passed after hearing the parties interested specifically on this question in each of the two cases. 12. Similarly, it is also settled law that it is the duty of the court to examine the genuineness and the bona fide of the scheme for itself. The Supreme Court in the case of Chembra Orchard Produce Ltd. Ors. v. Regional Director of Company Affairs Anr., (2009) 2 SCC 547, held as follows: 13. In Sakamari Steel Alloys Ltd. In (1981) 51 Comp Cas 266 (Bom), the learned Single Judge of the Bombay High Court held that Section 391(1) is not a signpost but a checkpost whereat it is a duty of the Court to examine the genuineness and the bona fides of the scheme for itself. A reading of the above judgment would, therefore, show that at the stage of issuance of summons for directions to convene a meeting, though the Company Judge has to apply his mind, prima facie, on the genuineness of the scheme, basically the entire exercise is to verify whether the numerous conditions prescribed in Rule 69 are satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss taking a commercial decision beneficial to the class represented by them for whom the scheme is meant. 9. Once the aforesaid broad parameters about the requirements of a scheme for getting sanction of the Court are found to have been met, the Court will have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class of persons who with their open eyes have given their approval to the scheme even if in the view of the Court there would be a better scheme for the company and its members or creditors for whom the scheme is framed. The Court cannot refuse to sanction such a scheme on that ground as it would otherwise amount to the Court exercising appellate jurisdiction over the scheme rather than its supervisory jurisdiction. The aforesaid parameters of the scope and ambit of the jurisdiction of the Company Court which is called upon to sanction a Scheme of Compromise and Arrangement are not exhaustive but only broadly illustrative of the contours of the courts jurisdiction 14. I may note 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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