1999 (5) TMI 485

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... der section 391 of the Companies Act, 1956 ('the Act') for sanction of a scheme of arrangement and compromise between the company and its preferential shareholders. The company, according to the affidavit, is not functioning on profitable basis. It is impossible for the company to discharge its liabilities towards the preferential share-holders. Therefore, an arrangement has been thought of to rel .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... tral Government and other necessary parties. It is contended on behalf of the Central Government that prefer-ence shares can be redeemed only in terms of section 80(1) of the Act. Such redemption shall be out of the profits earned by the company or out of the fund collected by issuing further shares. In the proposal made by the company preferential shares are not sought to be redeemed out of the f .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... rs who are if at all adversely affected, have no objection in the arrangement proposed by the company. In such circumstances, it is not to the prejudicial interest of such shareholders but it is as consented by them. Therefore, there is no reason to withhold the sanction in terms of section 391 (2). Accordingly, I order to sanction the scheme as proposed by the company and I issue an order in term .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X