- (1.) S. H. Kapadia , Aftab Alam, J. : - 1. Leave granted.
(2.) The short question which arises for determination in these Civil Appeals is whether an application filed by the Company under Section 391 (1) of the Companies Act, 1956 (for short the '1956 Act') seeking directions to convene a meeting of creditors and members to consider a scheme of amalgamation is required to be heard and decided ex -parte as per Rule 67 of the Companies (Court) Rules, 1959? To answer the above question we need to quote hereinbelow the relevant Rules. "Rule 2(9) 'Judge's summons' means a summons returnable before the Judge in Chambers or in Court. ... 67. Summons for directions to convene a meeting. - An application under section 391(1) for an order convening a meeting of creditors and/ or members or any class of them shall be by a Judge's summons supported by an affidavit. A copy of the proposed compromise or arrangement shall be annexed to the affidavit as an exhibit thereto. Save as provided in rule 68 hereunder, the summons shall be moved ex parte. The summons shall be in Form No. 33, and the affidavit in support thereof in Form No. 34. 68. Service on company - Where the company is not the applicant, a copy of the summons and of the affidavit shall be served on the company, or, where the company is being wound -up, on its liquidator, not less than 14 days before the date fixed for the hearing of the summons. 69. Directions at hearing of summons. - Upon the hearing of the summons or any adjourned hearing thereof, the Judge shall, unless he thinks fit for any reason to dismiss the summons, give such directions as he may think necessary in respect of the following matters: - - (1) determining the class or classes of creditors and/or of members whose meeting or meetings have to be held for considering the proposed compromise or arrangement; (2) fixing the time and place of such meeting or meetings; (3) appointing a chairman or chairmen for the meeting or meetings to be held, as the case may be; (4) fixing the quorum and the procedure to be followed at the meeting or meetings, including voting by proxy; (5) determining the values of the creditors and/or the members, or the creditors or members of any class, as the case may be, whose meetings have to be held; (6) notice to be given of the meeting or meetings and the advertisement of such notice; (7) the time within which the Chairman of the meeting is to report to the Court the result of the meeting; and such other matters as the Court may deem necessary. The order made on the summons shall be in Form No. 35 with such variations as may be necessary." 73. Notice of meeting. - The notice of the meeting to be given to the creditors and/or members, or to the creditors or members of any class, as the case may be, shall be in Form No. 36, and shall be sent to them individually by the Chairman appointed for the meeting, or, if the Court so directs, by the company (or its Liquidator), or any other person as the Court may direct, by post under certificate of posting to their last known address not less than 21 clear days before the date fixed for the meeting. It shall be accompanied by a copy of the proposed compromise or arrangement and of the statement required to be furnished under section 393, and a form of proxy in Form No. 37. 74. Advertisement of the notice of meeting. - The notice of the meeting shall be advertised in such newspapers and in such manner as the Judge may direct, not less than 21 clear days before the date fixed for the meeting. The advertisement shall be in Form No. 38. 75. Copy of compromise or arrangement to be furnished by the company. - Every creditor or member entitled to attend the meeting shall be furnished by the company, free of charge and within 24 hours of a requisition being made for the same, with a copy of the proposed compromise or arrangement together with a copy of the statement required to be furnished under section 393, unless the same had been already furnished to such member or creditor. 76. Affidavit of service. - The Chairman appointed for the meeting or the Company or other person directed to issue the advertisement and the notices of the meeting shall file an affidavit not less than 7 days before the date fixed for the holding of the meeting or the holding of the first of the meetings, as the case may be, showing that the directions regarding the issue of notices and the advertisement have been duly complied with. In default thereof, the summons shall be posted before the Judge for such orders as he may think fit to make. 79. Petition for confirming compromise or arrangement. -Where the proposed compromise or arrangement is agreed to, with or without modification, as provided by sub -section (2) of section 391, the company, (or its Liquidator, as the case may be), shall, within 7 days of the filing of the report by the Chairman, present a petition to the Court for confirmation of the compromise or arrangement. The petition shall be in Form No. 40. Where a compromise or arrangement is proposed for the purposes of or in connection with a scheme for the reconstruction of any company or companies, or for the amalgamation of any two or more companies, the petition shall pray for appropriate orders and directions under section 394. Where the company fails to present the petition for confirmation of the compromise or arrangement as aforesaid, it shall be open to any creditor or contributory as the case may be, with the leave of the Court, to present the petition and the Company shall be liable for the costs thereof. Where no petition for confirmation of the compromise or arrangement is presented, or where the compromise or arrangement has not been approved by the requisite majority under section 391(2) and consequently no petition for confirmation could be presented, the report of the Chairman as to the result of the meeting made under the preceding rule shall be placed for consideration before the Judge for such orders as may be necessary. 80. Date and notice of hearing. - The Court shall fix a date for the hearing of the petition, and notice of the hearing shall be advertised in the same papers in which the notice of the meeting was advertised, or in such other papers as the Court may direct, not less than 10 days before the date fixed for the hearing." We also quote hereinbelow Form No.33 and Form No.34 : - JUDGEMENT_705_AIR(SCW)_20091.htm JUDGEMENT_705_AIR(SCW)_20092.htm
(3.) The appellant -Company moved Company Application Nos. 354 to 359 of 2003 before the Karnataka High Court on 17th April, 2003 under Sections 391 to 394 of the Companies Act, 1956 in the form of Judge's Summons for Directions supported by an affidavit to hold a meeting of shareholders and members to consider the proposed scheme of amalgamation.;