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Issues:
Appeal against the order dismissing Company Petition and Company Applications under Companies Act, 1956. Analysis: The appeals were directed against an order dismissing Company Petition No. 135 of 1999 and Company Application Nos. 241 and 242 of 1999 under sections 100, 101, and 102 of the Companies Act, 1956. The case involved Highway Cycle Industries Ltd. and Sunbeam Auto Ltd., where a scheme of arrangement was formulated for the transfer of assets. The scheme was approved by the shareholders and creditors, and the court sanctioned it on February 10, 1999. Subsequently, applications were filed for modification of the scheme, which were dismissed by the learned company judge. The appellants argued that the judge's reasons for declining the modifications were erroneous. They contended that the proposed amendments did not affect existing shareholders and creditors and were necessitated by the time lapse since the scheme's approval. The court noted that the judge had ignored crucial factors, including shareholder and creditor approval, and had based observations on conjectures regarding undue advantage under the Finance Bill, 1999. The court found that the order deserved to be set aside due to the judge's failure to consider important aspects of the case and reliance on conjectures. It was highlighted that the transferee-company was a subsidiary of the transferor-company, and all relevant parties had approved the scheme and its amendments. The judge's concerns about potential adverse effects on creditors were deemed unfounded. Ultimately, the court allowed the appeals, setting aside the order of the learned company judge and granting the Company Applications and Petition in terms of the prayers made therein.
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