Amitava Lala, J. - (1.) Defendant No. 1 is a company having financial stringency. Defendant No. 3 company is a going concern. This is a joint application of both the companies. The plaintiff-company is the debenture holder of defendant No. 1 company. The convertible part of such debentures has already been converted into equity shares and the non-convertible part has been redeemed. Defendant No. 2 is the trustee bank of the debenture holders.
(2.) Upon observing recent recession in the steel industry defendant No. 1 and defendant No. 3 wanted to make arrangement amongst themselves. As a result whereof an application for consideration and confirmation of the scheme of arrangement was jointly made before this High Court having company jurisdiction. Shareholders of both the companies were directed to hold separate meetings. The shareholders of both the companies by an overwhelming majority accorded approval of the scheme of arrangement. Subsequently, a joint application was made under Section 391(2) of the Companies Act, 1956, before this High Court. Advertisements were published as per direction of the court. Notice was served upon the Central Government through the Regional Director, Eastern Region, Company Law Board. Besides the Central Government various secured creditors of the company like Industrial Development Bank of India (IDBI), Air Force Group Insurance Society, Unit Trust of India, Naval Group Insurance Fund, Industrial Finance Corporation of India Ltd. (IFCI) and Industrial Credit and Investment Corporation of India Ltd. (ICICI) gave their "no objection" letter through the Company Law Board in respect of the scheme of arrangement. On April 26, 2000, the said scheme of arrangement was duly confirmed by this High Court.
(3.) The Bank of Baroda, trustee of the debenture holders did not appear in the scheme at any stage. However, Bank of Baroda, during the pendency of the confirmation, expressed its desire to hold separate meetings of the debenture holders series (vii), (viii) and (ix) which were pending for redemption. By a notice dated January 28, 2000, of defendant No. 1, debenture holders meeting was held on February 22, 2000. Such notice was not only sent by post to the debenture holders but the same was published in the newspaper, i.e., The Financial Express all over India. According to the petitioners such newspaper published from Bangalore, where the office of the debenture holder company is situate. In any event on February 22, 2000, a meeting was held and ballots were counted on the basis of the debenture value. The meeting was further adjourned till March 7, 2000, where the proposals were finally resolved. This is to be noted hereunder that the Bank of Baroda being the trustee of such debenture holders not only took the initiative of calling the meetings of the debenture holders but also drew up the resolution.;