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TMI Blog2002 (10) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of manufacture and sale of surgical cotton, dressing bandage cloth and gauze cloth, etc. In view of winding up order, the official liquidator attached to this Court has become the liquidator of the company by virtue of the provisions of section 449 of the Act and has taken over the assets of the company in liquidation. 3. The State Bank of Mysore, the only secured creditor of the company in liquidation, after obtaining the permission of the Court to stand outside the winding up proceedings and after obtaining the leave of the Court to continue to prosecute the suit filed by it against the company in liquidation for recovery of loans advanced by it to the company in liquidation and after obtaining the Judgment and decree from the trial Court, has sold the movable assets of the company in liquidation and it appears, the sale proceeds are deposited in the Court. 4. Petitioners assert in this petition that the company in liquidation was only indebted to State Bank of Mysore, Davangere Branch, Davangere, which was the sole secured creditor in a sum of Rs. 9,53,381, approxi-mately an amount of Rs. 3,60,000 to sundry creditors, and a further sum of Rs. 75,000 to the ex-employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d unsecured creditors) has filed his reports. A perusal of the report shows that there seems to be no opposition or objections by the shareholders and the creditors (both secured and unsecured creditors) for the scheme of arrangement propounded by the second petitioner. 8. Notice of this company petition was ordered to be taken out to the Regional Director, Department of Company Affairs, Chennai, and also to the official liquidator and the petitioners were also directed to take out paper publication in one edition of Times of India newspaper fixing the date of hearing as 3-8-2001 inviting objections, if any, to the scheme of arrangement. 9. The Regional Director, Department of Company Affairs, Chennai, has filed an affidavit before this Court stating that he has no serious objection for the sanction of the scheme of arrangement, since the same has been approved unanimously by the members, the secured and unsecured creditors. 10. The official liquidator attached to this Court has filed his objections opposing the scheme of arrangement propounded by the petitioners. Apart from others, the primary objection of the official liquidator seems to be that though the first pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any class of them; the Court may, on the application of the company or of any creditor or member of the company, or, in the case of a company which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Court directs." 14. A plain reading of the section clearly indicates that the Legislature intended that if any compromise or arrangement is proposed, the company, or any creditor or any member of the company will be entitled to make the necessary application/petition and in case where the company is being wound up, as the Board of Directors has ceased to function and the company is represented by the liquidator, the liquidator will also be entitled to make the necessary application/petition. The right, which is conferred on the contributories or the creditors, is not intended to be taken away when the company has gone into liquidation and in such a case, an additional right is also conferred on the liquidator. 15. The provisions contained in the Companies (Court) Rules, 1959, in Rules 67 and 68, the forms prescribed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, it is necessary that a compromise or arrangement between a company and its creditors or any class of them, or between the company or its members or class of them should propose a compromise or arrangement. When such a scheme is proposed, and the sanction is requested, the Court will have to be satisfied as to the prima facie , that the scheme of arrangement is genuine, bona fide and would be in the interest of the company and its creditors and the application is filed by a person, who is authorised under the provisions of section 391 of the Act. The Apex Court in the case of S.K. Gupta v. K.P. Jain [1979] 49 Comp. Cas. 342, while considering the scope of section 391(1) of the Act and who can move the application under that section was pleased to observe: "Sec. 391 enables a member or a creditor of the company or a company which is being would up, its liquidator, to make an application to the court proposing a compromise or arrangement between the company and its creditors or any class of them or between the company and its members or any class of them and seeking directions of the Court to convene a meeting of each class of creditors and/or each class of members to w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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