1997 (2) TMI 410

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..... 1956, a notice of this application was required to be given to the Central Government at this stage also, notwithstanding the fact that such notice had been given at the stage of grant of sanction to the scheme of amalgamation. Having regard to the nature of the question raised, Mr. S.B. Mukherjee, learned senior counsel, was requested to act as amicus curiae in the matter. Mr. Mukherjee submitted that section 391 of the Companies Act, 1956, provides for the court to sanction a compromise or arrangement between a company and its creditors or members. The procedure in such cases is that first an application has to be made to the court for convening a meeting to consider the proposal of compromise or arrangement, and, thereafter, if such .....

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..... romise or arrangement or scheme of amalgamation, there was no further necessity of giving a fresh notice to the Central Government at such stage. Mr. Mukherjee submitted that section 394 only indicates the powers which the court may exercise when a proposed compromise, arrangement or scheme of amalgamation is placed before it for its approval and it does not contemplate the making of any application for the said purpose. Mr. Mukherjee lastly submitted that adequate safeguards had been provided for in the second proviso to sub-section (1) of section 394 of the Companies Act which stipulates that no order for dissolution of any transferor company without winding up is to be made by the court unless the official liquidator has, on a scrutiny .....

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..... ed without winding up is contained in the second proviso to sub-section (1) of section 394 which provides for such order to be made only upon a report being made by the official liquidator that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest. Accordingly, it appears that except for the single notice to be given to the Central Government at the time when the proposal for compromise or arrangement or a scheme of amalgamation is under consideration by the court, no other notice is required to be given at the subsequent stage which is only a fallout of the sanction granted to the proposed compromise or arrangement or scheme of amalgamation. In the present case, i .....

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