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Issues:
1. Application under section 391 of the Companies Act, 1956 for dispensing with meetings of secured and unsecured creditors and shareholders. 2. Interpretation of provisions of section 391 of the Act regarding dispensation of meetings. 3. Consideration of consent letters as a substitute for resolutions passed at meetings. 4. Legal implications of dispensing with meetings of members and creditors. 5. Direction for holding meetings of shareholders and creditors. Analysis: 1. The application sought dispensation of meetings of secured creditors, claiming no secured creditors existed, and that unsecured creditors had been paid off with consent from others for the proposed scheme. The Court directed notices to shareholders and creditors for their views. 2. The Counsel argued for dispensation based on the consent of shareholders and creditors, citing a previous case where such dispensation was allowed. However, the Court noted that the Act requires meetings for discussion and voting, and dispensation contradicts the purpose of seeking permission for meetings. 3. The Court emphasized the importance of meetings for deliberations, discussions, and voting, stating that consent letters cannot replace the essential process of meetings as required by law. 4. While acknowledging the convenience of obtaining consent through private circulation, the Court highlighted that there is no substitute for physical meetings attended by members and creditors. 5. The Court rejected the application for dispensation, emphasizing that it conflicts with the provisions of the law, which mandate the Court to order the manner of holding meetings, including appointing a Chairman and specifying the place and time. 6. Consequently, the Court directed the holding of meetings of shareholders and creditors, appointing a Chairman and specifying the quorum and publication requirements. The Court also addressed mistakes in previous orders and modified the dates for the proposed meetings and paper publication accordingly.
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