9911796707
TMI Blog1978 (10) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... n). The official liquidator of the company in liquidation has opposed this application mainly on three grounds at this stage. In the first place, it has been urged by him that under section 391 of the Companies Act when a company is being wound up the only person who can frame an arrangement in respect of the company is the liquidator and not anybody else. In this connection, he has relied on the language of section 391, sub-section (1), which is as follows : "391. Power to compromise or make arrangements with creditors and members. (1) Where a compromise or arrangement is proposed ( a )between a company and its creditors or any class of them ; or ( b )between a company and its members or any class of them ; the court may, on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce may also be made in this connection to Rajendra Prosad Agarwalla v. Official Liquidator [1978] 48 Comp. Cas. 476 (Cal.) and Muhammed Abdulla Tharaganar v. Official Liquidator, Cape Comorin General Traffic Co. Ltd. [1953] 23 Comp. Cas. 161 ; AIR 1952 Trav-Coch. 243. In the latter case, the court came to the conclusion that under the old section 153(1) of the Indian Companies Act, 1913, which is in pari materia with the present section 391 of the Companies Act, the introduction of the words "in the case of a company being wound up, of the liquidator" is intended to provide an additional and not an exclusive person who could make the application. In Rajendra Prosad Agarwalla v. Official Liquidator [1978] 48 Comp. Cas. 476 (Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares. Such a power is recognised as valid if it is used merely to avoid the formalities of forfeiture but not otherwise. ( Vide Palmer's Company Law, 21st Edn, p. 328). A handing over of share certificates as mentioned in Form No. 141 can never constitute such a surrender ; under section 41(2) every other person who agrees in writing to become a member of a company and whose name is entered in its register of members, shall be a member of the company. Hence, every person who has agreed to be a member and whose name appears in the register of members is a member. Section 150(1)( a ) to ( d ) reads as follows : "150. Register of members. (1) Every company shall keep in one or more books a register of its members, and enter therein t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the court. This could never have happened if the contributory had ceased to be a member of the company in liquidation. There is, therefore, no substance in the second contention of the official liquidator either. It has further been argued by the official liquidator that the proposed scheme is not a scheme or an arrangement contemplated under section 391 of the Companies Act because the scheme does not propose any arrangement or re-arrangement regarding the rights of the creditors or shareholders of the company. It is, however, not necessary that an arrangement under section 391 should be an arrangement with the creditors of the company or should involve any changes in the rights of the shareholders of the company. In the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver an arrangement to take such a company out of the winding-up. The present application, therefore, is maintainable under section 391 of the Companies Act. I do not see any reason why the scheme set out in Ex. C should not be considered as a scheme under section 391 of the Companies Act. I also do not see any reason why the scheme as proposed should not be put before the members of the company to ascertain their wishes. It has been stated by the applicants that in the explanatory statement they will put forth for the consideration of members proposals regarding the business to be carried on by the company on its being re-started. If the proposals are approved it would be open to the court thereafter to examine whether in the light of all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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