391. Power to compromise or make arrangements with creditors and members .-
(1)Where a compromise or arrangement is proposed-(a)between a company and its creditors or any class of them; or(b)between a company and its members or any class of them;the [Tribunal] 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 [Tribunal] [ Substituted by Act 11 of 2003, Section 39, for " Court" .](2)If a majority in number representing three-fourths in value of the creditors, or class of creditors, or members, or class of members, as the case may be, present and voting either in person or, where proxies are allowed [under the rules made under section 643] [ Inserted by Act 65 of 1960, Section 151 (w.e.f. 28.12.1960).], by proxy, at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the [Tribunal] [ Substituted by Act 11 of 2003, Section 39, for " Court" .][[Provided that no order sanctioning any compromise or arrangement shall be made by the [Tribunal][unless the [Tribunal] [Inserted by Act 31 of 1965, Section 48 (w.e.f. 15.10.1965). ][is satisfied that the company or any other person by whom an application has been made under sub-section (1) has disclosed to the [Tribunal] [Inserted by Act 31 of 1965, Section 48 (w.e.f. 15.10.1965). ],[by affidavit or otherwise, all material facts relating to the company, such as the latest financial position of the company, the latest auditor's report on the accounts of the company, the pendency of any investigation proceedings in relation to the company under sections 235 to 251, and the like.] [Inserted by Act 31 of 1965, Section 48 (w.e.f. 15.10.1965). ](3)An order made by the [Tribunal] [ Substituted by Act 11 of 2003, Section 39, for " Court" .](4)A copy of every such order shall be annexed to every copy of the memorandum of the company issued after the certified copy of the order has been filed as aforesaid, or in the case of a company not having a memorandum, to every copy so issued of the instrument constituting or defining the constitution of the company.(5)If default is made in complying with sub-section (4), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to [one hundred rupees] [ Substituted by Act 53 of 2000, Section 174, for " ten rupees" (w.e.f. 13.12.2000).] for each copy in respect of which default is made.(6)The [Tribunal] [ Substituted by Act 11 of 2003, Section 39, for " Court" .][Tribunal][* * *] [ Sub-Section (7) omitted by Act 11 of 2003, Section 39.][* * *] [ Certain words omitted by Act 11 of 2003, Section 40, for Section 392.]
