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TMI Blog2003 (6) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... of amalgamation of the transferor-company into the transferee-company. Under the scheme, all properties and assets of the transferor-company along with its liabilities are proposed to be taken over by transferee-company. 2. By two separate orders dated 7th February, 2003 in Company Applica-tion No. 73 of 2003 and Company Application No. 74/03 filed by transferor and transferee-companies, this court directed holding of the separate meetings of the equity shareholders of transferor as well as transferee-company. The court however, dispensed with the holding of the meetings of the creditors of both the transferor and transferee-companies for the reasons stated in the said orders. Accordingly, separate meetings of the equity shareholders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eholders. The learned counsel for the Regional Director states that the Regional Director has no objection for sanctioning of the scheme. 4. At the hearing of the petition, no member of either of the companies has appeared to oppose the petition. However, M/s. Knitting Industries creditor of the transferor-company appeared and opposed the petition. The objecting creditor has filed an affidavit of its partner Shri Subhash Mehra, which is countered by the transferor-company. 5. According to the opposing creditor, it had supplied goods to the transferor-company under various purchase orders, copies of which are annexed as Annexures B1 to B16 to the affidavit of Shri Subhash Mehra. Copies of the delivery notes are also annexed to the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( c ) of sub-section (2) of section 101 empowers the Court to require the Company proposing to reduce its capital either to pay debt or to sufficiently secure the objecting creditor. 7. There is no such power in the Court under section 391/394. According to him, the Court has no power to require the transferor or transferee-company to pay or secure the objecting creditor. He further submitted that in any event, the present scheme was not a scheme of arrangement with the creditors of either the companies as neither of the Companies was seeking any adjustment or arrangement with the creditors. The companies were going to pay all the creditors as per the initial contracts or terms of credit without claiming any diminition of liability or d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tainly oppose the scheme for arrangement on all grounds available to him in law which would include an objection that the scheme is not just and fair to him or to the class of creditors to whom he belongs. The first argument of Tulzapurker that in view of the absence of provision like section 101(2)( c ) empowering the court to direct the company to pay or secure the creditor before sanctioning of the scheme of arrangement contemplated under sections 391 to 394 of the Companies Act, the Court has no power to direct the Company to secure the objecting creditor also cannot be accepted. If the said argument is accepted and the court comes to the conclusion that the scheme of arrangement is unfair and unjust to the objecting creditors or to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany or the Court prima facie comes to the conclusion that the debt is due. ( ii )that the creditor would be adversely affected by sanctioning of the scheme. ( iii )the scheme is unjust and unfair to the creditors on any class of creditors to whom the objecting creditor belongs. 9. In the present case, the debt except to the extent of Rs. 51,154 is not admitted. As against that debt, the transferor-company claims to have a claim for damages. No compromise or arrangement is proposed with the objecting creditor or any of the creditors as all the debt and liabilities of the transferor-company are being taken over by the transferee-company. It is not even the case of the objecting creditor that the transferee-company is not sound and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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