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Issues Involved:
1. Winding-up petitions against the respondent-company. 2. Scheme of arrangement/compromise proposed by directors and shareholders. 3. Opposition to the scheme by the State Bank of India and other creditors. 4. Legal provisions under Section 391(2) of the Companies Act, 1956. 5. Feasibility and viability of the proposed scheme. 6. Conduct of the propounders of the scheme. Issue-wise Detailed Analysis: 1. Winding-up Petitions Against the Respondent-Company Three winding-up petitions (C.P. No. 80 of 1986, C.P. No. 30 of 1987, and C.P. No. 142 of 1987) were filed seeking the winding up of M/s. Roxy Enterprises Pvt. Ltd. Notices were issued to the respondent to show cause why the petitions should not be admitted. C.P. No. 80 of 1986 was admitted on October 1, 1986, but the advertisement of the petition was deferred. 2. Scheme of Arrangement/Compromise Proposed by Directors and Shareholders Directors and shareholders, who are family members, filed C.A. Nos. 4096 and 4097 of 1989 in C.P. No. 30 of 1987, proposing a tentative scheme of arrangement/compromise under Section 391 of the Companies Act, 1956. They claimed the scheme was beneficial to creditors and sought to put it to vote among secured and unsecured creditors. The only secured creditor was the State Bank of India. They also sought a stay of various suits and winding-up petitions pending the scheme's approval. 3. Opposition to the Scheme by the State Bank of India and Other Creditors The State Bank of India opposed the scheme, contending it was propounded to delay proceedings, particularly Suit No. 2003 of 1985, for recovery of Rs. 1.53 crores. The petitioning creditors of C.P. Nos. 80 of 1986 and 149 of 1987, and Bharat Aluminium Co. (plaintiff in Suit No. 512 of 1988), also opposed the scheme. The bank argued that the scheme did not account for the actual amount due and lacked details on fund mobilization. The bank considered the scheme not beneficial and stated it would reject it if put to a vote. 4. Legal Provisions Under Section 391(2) of the Companies Act, 1956 Section 391(2) specifies that a scheme must be approved by a majority representing 3/4ths in value of the creditors. The secured creditors are a distinct class, and the State Bank of India, being the only secured creditor, opposed the scheme. The court has no jurisdiction to sanction a scheme not approved by the requisite majority. Given the bank's opposition, convening a meeting of secured creditors would be futile. 5. Feasibility and Viability of the Proposed Scheme The scheme appeared to be a tactic to delay winding-up proceedings and other suits. The company did not refute allegations made in C.A. No. 653 of 1990 and failed to provide a viable plan for fund mobilization. The propounders proposed to take a loan of Rs. 15 lakhs from eight persons but did not specify terms or provide their consent. The company's past turnover and the proposed future turnover under the scheme were dubious, and the scheme lacked concrete details on securing orders and achieving the claimed turnover. 6. Conduct of the Propounders of the Scheme The propounders' conduct suggested an intention to delay proceedings. The scheme was vague, and the propounders did not disclose the company's latest financial position. The scheme aimed to get approval from creditors who were family members or associates. The propounders' conduct and the scheme's vagueness did not warrant favorable discretion from the court. Conclusion C.A. Nos. 4096 and 4097 of 1989 were dismissed with costs, and C.A. No. 653 of 1990 was allowed. The ex parte order of stay dated August 3, 1989, was vacated. Costs were quantified at Rs. 6,000, to be shared equally by the petitioning creditors of C.P. Nos. 30 of 1987, 149 of 1987, C.P. No. 80 of 1986, and the plaintiffs of Suits Nos. 2003 of 1985, 512 of 1988, and 801 of 1985.
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