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TMI Blog1961 (12) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of section 153 of the Indian Companies Act, 1913. The question arises in connection with such a meeting held of the creditors of the Gaya Sugar Mills Ltd. On November 14, 1951, an order was made by the company judge in the Patna High Court for the winding up of the Gaya Sugar Mills Ltd. On October 6, 1953, an order was made by the learned judge for action to be taken under section 153 of the Indian Companies Act. Mr. G.C. Banerjee, who was appointed chairman to hold the meeting of the creditors, held separate meetings of the debenture holders, secured creditors and of unsecured creditors. In his report he stated as regards the meeting of the unsecured creditors that "thirty unsecured creditors either in person or throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the resolution passed by the creditor companies authorising Arjun Prasad to attend the meeting of the unsecured creditors of the Gaya Sugar Mills Ltd., and vote on behalf of the companies, were sufficient in law to make his attendance at the meeting the attendance of the companies "in person" and his voting on behalf of the companies valid voting of the companies. Accordingly, he rejected this objection. On appeal a Division Bench of the Patna High Court has allowed the objection, being of opinion that the delay in raising the objection would not entitle the court to ignore the legal defect of the votes and that in law the votes cast by Arjun Prasad were not valid votes of these two creditor companies, viz., Bhandani Brothers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is the authority authorised to hear appeals from the decisions of the court ? The "court" here cannot but mean the court exercising original jurisdiction. When the company judge exercises the jurisdiction he does it under the provisions of section 3 of the Companies Act which says that the court having jurisdiction under this Act shall be the High Court having jurisdiction in the place at which the registered office of the company is situate. The authority authorised to hear appeals from appealable decisions of a single judge of the Patna High Court when exercising original jurisdiction lie to the High Court and not to this court (vide Clause 10 of the Letters Patent). It necessarily follows that the appeal from the order of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... might be, that would not be a sufficient reason for refusing to entertain the objection. This brings us to the main question in controversy, viz., whether the resolutions passed by the two creditor companies, viz., Bhandani Brothers and Hindustan Coal Company, authorising Arjun Prasad to attend the meeting on their behalf and to vote there on their behalf made Arjun Prasad's voting valid voting. Section 153(2) of the Indian Companies Act is in these words : "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 either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced, In re [1920] Weekly Notes, part I, p. 274 cited by the learned counsel. In that case, the court was dealing with a petition for reduction of capital. In deciding whether the special resolution to reduce the capital of the company had been duly passed, the court had to consider whether there was a quorum at the confirmatory meeting, at which one member of the company and one representative appointed under section 68 of the Companies (Consolidation) Act, 1908, to represent a shareholder of the company, the Eastern Development Corporation Limited, were present. The articles of association provided: "two members personally present shall be a quorum" It was held that a representative appointed under section 68 should be taken into accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 1936, an addition was made in section 246 which empowers the High Court to make rules, concerning the mode of proceedings inter alia "for the holding of meetings of creditors and members in connection with proceedings under section 153 of this Act." Accordingly, a number of rules were framed by the Patna High Court in exercise of this additional power. Rule 144 of the Rules states that a creditor or contributor may vote either in person or by proxy. Rules 145 to 153 deal with various questions as regards proxies. Of these rule 150 lays down how a proxy is to be given where a creditor is a corporation. Admittedly, no proxy in accordance with rule 150 was given by the two creditor companies, Bhandani Brothers and the Hindustan Coal Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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