M Manoj Kumar vs Karnataka Leasing And Commercial ... on 19 June, 2009

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Karnataka High Court

M Manoj Kumar vs Karnataka Leasing And Commercial ... on 19 June, 2009

Bench: Anand Byrareddy

 

Aged ahuui 27 years,

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Kaiyan Eismsing Sociciy,
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i;ii.$:?*p;.;:*z:ti~::;3 Li:i1§§7.%;{:§'{I:'; Liq:::§&ai;7€;n}
.  =!2§:;';:*{35e:::t1:r;a;gi~-?3§; the ()f'r¥c%a¥ §4§qi.ﬁd3E{x:'
"  {E-s._:¢ur.i. 'af Eiamaiaiaa,

Kgérﬁaiaka biasing anti Cwmmt:r;:ia.§

 = AB:mga§§i2:'.&;~ 535099;.  RESP:fj2NDENTS

 ' {By  Qeepak and V, §a};a.ran1¢ Advecaécs Em' {}§§s:i:a§
' ' " -- __ ''L§quidat{:;"§

.   --*Th:: appiieani is: persuzs has iéksi ilim abesezs apgsiéazzsifam

%   zzndez' Sectissrn 39}, 392 and 394 ::2f the ﬁaazzpazziss. Ag; §§f§é reaé
.. "wig: R1552,-: 9 anti 230 mi" ifxc Cﬁmgaﬁiﬁﬁ {'C¢:rur£_} R3385, }.9§;'? am}
 0:63;" 1 Rule if}, S:;b~Sa<:£%9r3 {2} 2:23" the Caééz 3f Civié ?£'{}$€€Z§i3f€,

i9'i3S, 53: way £?fU%}§%€§§Gﬁ.

'g



I5

Efurzxaaam-I A:3;3iis_:aiiL:«n ?'u.2é5s";?;Q'}?

Betzasa;-<31}: '

1

N1

Shri. S. C-haI1€.3f'd.S.h€§'.,af Bhamiary

SEQ. 3318 Shri Viitappa Bhandary

Aged Aboui 272 Years,
Residing at '1\f<3.93fE,
13' Main. K.G'Naga1'.
Bangaiare _ 560 019»

Sri B Vcmkaiaisiubba Ram,

33:: Eats B Ve;1kat:£:1:;;a;¥*a3:'é§§§;a':4 

Aged Abtmi 83 'r'e:"3r::',j - r

Residing 3: N0. 1:223, ;aa:mas;;m%%[ %  

3 B Maita R6.:24,__::L £3-ith Ci:<:§3:':,_' 
Sem23h?§aIi;?.aga1*é,   "
'{'eEa§?¢a:1i':a_._  Tuxyig ''

Baiggai-are :":-vé*i)"f.}'=1';:§,'  _ " '

 'Shri B RV'Nz:gga'bhL 1shan
 S59; Late Sh;i1'+Za':13iaiah

_s§g:~.7(§-- :5sL§:><3ui -€33 Years

  Pg€~;sV§£i'iiig._3§'i..N0.?4,
 Ra'z1g2:.. Rae Read

'  Bazsgasxgm 559 994.

 H K Seshachaia

_  SS3 Shré H S Krishna Murihy
'  Ageﬁ Abcmi $2 Ycarg

Ajéi $131,, N{>,3f,?,8,
B2211 Tcmpit Read
Baggaiere 560 G04.

5



ii!

:5;

 M§fsé:'e ~ *3!»

$3

Shri S Raina Krishna
Aged About 276 Years
SEC Shri Shama Fiat.)
Residing at No.74,
Ragga Ram Read,
Shankaragumzn
Bangaihrt: 5538 004 .

Shri K S Nagaraj

SE0 Sim' I-I Srikamzaiah
Ag-'sci About 375 '1'cars
Residing at N<}J}'2:i,.
Range: Rae Road,
Shankarapuram,

Baxlgaiors 568  _ 

Srni;-Paxf4a:gi1ix5éé¢§+;arma.ri 
Vfitiﬂlﬁ Méﬁh}?   . .
Agmi .;~.m;;k  AA %   
'§?'s'f<3 Shri T '~e'£t£}:%f'E'vIzi3--#;h§I
Rc>:i(i3iLf1'g~._§ 3% 33$;-:.65.4fi*~;'

" _§BV B. Gardén Read, V
-  §\.1f;y-:<.as.:>1;v.%  A

  "V 'ﬁfajncsh Murfhgg

X % %%3:e Sifiri  Vittai Murmy
Aged égbuui 33 V6313;

?w§();§5ﬁ§5 1, B B ﬁafdﬁﬁ Read ,

I

 "Sri B 'if Vwnkaéanarayana

S,-3:3 B Venkatasubba Rae
zésgtz-d fabami ééié} 'z'earS
Resiéizzg at Nixiﬁé?
iiaihnaahrtta

3



3?

3 B Maxis: Rand, 4!}: Cress
Someshx faranagara,
Yrziahanka ﬂaw Tuwn

G K V K Past

Bangaiure: 5611} 865.

{By Sri S G Fandii, Adwcala} _

ANS :

E

Karnamiw L<:3:~,2i:2g 3ﬂﬁ  -,_ , 

Cztsmmerciai Cerpefatégan     _
}€c;:3resc:nit:dV by  V'£:fi{.:1V_;>ig£:V§«g-§.é.~}'f"Y ' 1' .. 
ﬁlth F1901? ané ff'.¥§:§g,:. .4   ' "
Kcnciziyzi. sa;§--a:;, .K<,>ré;ti.%1ng2§a  ' VV 

Bangf1§i§1'é§_'«§6€§ £534_    _ *

S31? M Mzéifmj E~':.unm3.* '

S50 iate Sri 'E§:;j§ii,VE'v£ai'i§,§:i"~,:=§>;z;'
A £?:§)s'r1i1;  '-3}'t:£zi9és---.___ . " '"
Fig}. i  _V E}wam_§<3' 

 ;isi:13yan Hz:s.;;Siﬁg Simetjg
~  _  3;=.yuuL'V1i3é§-ayanagar
v. 3 Ba;r:;ga§é:¢ ~-- ﬁéﬁi} ($30

  K Deshpandés

Sf{1.S£:;--'i'Krish.naji

 Ag¢a',m~,u: 49 

E'-53.3.88}, Raheﬁ, Empress

'T  'B922, Vite: Savarkar R936
' .5PE"3.§3;§2i 3&5

Mamﬁai

§'«iR EVE P Prabhtz
85% {JR P-i.V. raking

§»



Aged About "I2 Years
N<>.4£.}§, "Shashi ?rabha"
?,i)ih Baiaén Read? i Bimtk
Ragajinagar,

Bangaiorc 363 0153. 
MR. M vinud Rae   *
Sic Late Shri B E'»4adhava:[~S_he::<3->--«A '
Aged Abuui 64 Yams V 4'
Madhava Kruifm 
1'\3u.8835I Vani 'V3133 §.z}:~1;i.--------  

Mygsre W ::7::> e:m,&\%AAA,L%A%   %  % %%%';;%;4%RE3?:>§::>5m*s

i/I

{By Ski. Dccpai; 311d'-Ja§f3l'§iZ¥3; ',.!5i£§.§{€;}'!1}a§t2 for €}ﬁ3::.ia§
Liquidatar, . «A g  j   ' 
Shr¥.¥ idaya F-116133, ;'?f5§e_::i.«;n'. A:ivs':<:_3?6:. Vt1';:'"§¥'ht*é G. Kt"ishi2at2:urt¥1y;

ALE 'meats: E254' 'R-2;   -- _ A *  V

33316 €£.31:m;t:? :"ft;::"'-.__¥§'1'e*.< applicants @235 ﬂit:-Li {he abasvt:
a§§§icaté0:}"-1;:;dr;:r  S5 .t;§§.the Cmnpanies {Cami} Ruées, E95?

far 3 ;.¥i_r::::i£;:i§ {Q £315' rcgpzsﬁdeznis 2 {£3 5 {£3 gsiiic their chgim {sf ii}:
 appléganis and étizar degfzssﬁmrs zvhaz have appreveé ihe ache?-.2-me
. "--.2:;1d' fezébhziéizyn §a5$'§t:}.§ in ﬁat <.§c;:-pc»§§i:.3rs nleaiing Raid on

"2 _V '€3?§(:'8V.2f}{3V'§,§1€3._§§é€3_ interest Qfjtzstice.

gammy ;§pp:§;;g:;uz; Nan} 23352303

' ' Betwaal: 

      MG. I}aiEaE§n'eya

 S55, sf Late Shri. Gepal Shea)!
 Agni about 49 years
Residing at M9346, 5*" cum,



2nd Biock, Jayamigar,
Bangalore --~ 560 01 1.

fix}

Shri. M.G. Clxandramohan   
Sit). Late ML. Gopal Shcay '
Aged about 61 years,

Residing at n0.44-4,

Mancmidhi, 95' Cross,

1" Bieck, Ia
Banylore 550 11.  

3. Shzi_M.R.}aishank,,,~   A  

S/0. Shri. ML. .Ramac,h:=::s1:a. Shgﬂy' " v_ 2 " '
Agedaboutsiycam,    
Residing at. f3ha£iihinik¢fa11,_  
N:1-!5f3-¥,P:;!&ape    '

(By   '

And:  "

'  Camgisercial % Céxrpéyration Limited

  Oﬁiciai
Liqné;!ator~~     '

 A  -4th tum,  5.5.}: F Wiﬂg,
" " ~«  ' " . __ Kcyngiziyavvﬁaidan, Korazzaangala,
 f ;3agga;gm~ 560 034.

'    Dmpak and V. Iayaram, Advucatcs for Ofﬁciai
T 

3



The Counsel for the applicants filed the above application
under Rule 9 of the Commnies (Court) Rules, 1959, sacking a
dimciitm to the Official Liquidator to exercise his puwﬂr$ undcr
Section 457(1) (0) of the Companies Act, 1956 and sz3i!''thi::.V:si'asets
01' the wmpany by public aucliun.  %  $ 5  

Cumpanv Apnlicaliun No.777!2006    . & 
Between: A ' A

1. SA. Srimandhar Kumar   " ~.
No.363, 42nd Cross, 3"' Bloclg. jj 
Jayanagar,    
Bangalorew 560 082.  '  " f    , -
(Applicant-in-pcrsun)      

And:

1- Shri.   uihtzrs
(By their Advagate
  

  '  ijdaya H0113)

 L{;;;s;ng mi Cummcrcial

Cgrporatiﬁgz 'Limited {In Liquidation)
Re'§3tfe':=*.§nted by the Gﬁicial Liquidator
High Qatari of Kamalaka,

   Bagggalore.  RESPONDENTS

- and V. }ayaran:x, Adwzecaiczs fur Qfﬁcial ' :1' Liquidator) 2% This Company Application ﬁicd under SCCii£}i'i~' 'lh{3 Cempanies Act, 1956, read with R1213 9 of the Co:i1'pani¢s?.{_C:,ﬁ1rt}'. ' Ruitzs, 1959 and Order I Rule 10, Sub-Stzclion Coded? Civil Precedurc, 1908 seeking directimz' ta. theﬁ prg1_nba.trdersi'af the ' j A' scheme of ammgamcnl in Company ,A;3p§ie[a!ir;~ n;*~. 93?2QOt5T iu ' honour their comminnem; to pay the"inte.r¢st legitin1atsIj;-- 6~ué"to the director./creditor at the coniraglod r-'#11:: bi' 142%' _anI:um iil I » ﬁnal payment by amending the of otfar Vmacie ii: thé scheme bcfurc the meeting of the crcdi{ors"':_i;:e- be":::.:1_d on 7.8.2006 in theintcrest ofjustice and"cquity.;*'"'\ * :4 V . Compgny gmscge;s.»;; Nu.92J5.%:;ogg.«%%[% .A % BETWEEN? »' % ~

1. szmk Sic Late .Ivf.L§C}cpaia »S'i}§;it3.r, ' - Agcdiibuui Residin?gLat%No.'i46,A.5"'.Cz=oss, 211%.! .Bl0ck," J:;;yanagaf';.

%1.=sa'i-are - 5ﬁ~'9Q1%%I , V 'Shxé M;G;€3Handmmuhan, . 'S5Q'Ai&¥ﬁ'«h5.Lf.G'0F3l3 Sheﬁy ' {:1 ymrs, R;ssic!-ing at No.44'-1, Manoxiidhxg 9"' ermga, 1' Black, Jayanagar, x Bangaluw .-- 550 on ' M.R.}ayashankar Sio R.Ramachandra Shetty, " Agud aboui 51 years, Residing at Shanﬁnikemrg % Nu. 1 523-1, Paiace Read, Bangakxe ----~ 550 052. .. A%PF»L::c;:m:73 'A (By M55 Indus Law, Advocates) AND :

I Kamaiaka Leasing and Commercial Corpefaiion Liiiiim {Iii-._ Liquidation), _ Represented by Oﬁiciai. Li:§uidatnr._ " V _ 41$}: Finm', 'Daand F:Vv'ii:g.;' ' Kcnd:'iya:Saida " Is';9ra$I1ai1g§i!a" = Bangal_Q.re..S6§ Q34v. :

2 Sri.-3'u£..?sg§sr::'£ij;'i3i;::x1a1'j'.V> t Sm late S'rE'.S.K.'Ma;:iyappa. j Aged é:Abol;!,_ 29.}!-',ai's 3 _ No. I 8., 'lllwarakti ' Kaiyam "I:Inz',1:"sing S<:_cieE,fy V . Iayoui,-A Vijayanagar « A ' =3;/OVSl:.:f:1.Krishnaji *--..4Ag§-£3 ~A Euu£ 49 Ytrms N:).8{}1,4Rahe}'a Empress " A' T 392, Veer Savarkar Road V '§?rabha Evi Mumbai j Mr. MPPrabha:

Sfo Dr, R.V.Prabh.u Residing at M0405, 'Shashi Pmbha' 3 29.18.1996. An appeal was ﬂied against the or<it:1j..:.:f' in 0.33 Nu.35f19%. The third and ;~mh};.&a::;u;]g,s %he;¥;e;;g alung with one SK. Mari§,»'appd, V had ﬁlm} Company Appiicaiigm CA. f=§_g¥§2O9;'I9§3'3V;

umicr Scciiun 391 of the Act    rcyixaal uf

KLCCL.

The divigsicﬂ v3:_I!i.«I\LIari}'appa ts} dcposii R350 R56 cmrc in shoals his dsposiied ugly £35.55 lakh.

During agzpiicaiéen, SK. Mariyappa had died. The ﬁrs; ;§§:iiié§§ne§*- hem had then ﬁiad an appiicaﬁion, in "'81: épgécéi; séaﬂging ptzrsnissiun t-:2 pursue the s.-umpan}; applicaiiun, stead Q!' his faihcr, in the year EQQ5. A Dix?£;t~:«i_<31: ﬁzftizizs Cuuri, while: rajcciizxg 'the apgncai En GSA. gramed iibcrty is; EEK: icgai rcpressntaiivss :,3f the; Mariyappa, in ﬁle an appropﬁais applicaiion before: a Vj Caﬁzpeient Court, by an mrdcr dated I3.04,2{)(}5. The first § peﬁiiuncr aiong with petitioners 3 and 4, win} hofdenz of KLCCL had ﬁled am applicaiimy seeking icmsc ef ihe: Cum! to isstft: dirﬁtﬂitizzs £1.2 'c<ji:$Ic¢;}£éi1V[_£hs meetings uf sharchuidcrs, :~:acu9"éc£-..g:rcdi£Grs, ¢:mp§;>}#'sé7§:3«.¢}.e;%usi£u'£s;' and unsecured cr¢dile.2r:s;uf 13,5 gonsiécr a Scheme: uf Armngcmeni pawﬁiiunmx- This was ailewtsd by thin; pcliliuncm were dircchzd to flouri, in dtsrnunsirzttm their E-ona on 12.07.2006. The orécr of this C£:~_1;fE .?_.§aVic:?3 : ih-as not been c-halicngtzd. ﬁjliv ir:.ms that She: meszaiinrs wen: cmwencsgi an » ..... 9 €:"Z.533'7:52{}QC§',.'£}.f} E§E§ sharcimiders, s¢:s:-unzd and unsszcured azrediiurs ancitiizté scpazaicfy fur each 9!? the aiomw: ciasses. The '.;~;a:i1c:rx££:..x§;a;g_st Said to have: hem; apprzwed by a majhriiy 4.}? {huge aszd vuténg at each uf the mceEings. The: Chairmazx <2}: ihcs

-.._ A"m«3::£ings hays ﬁisii his rvpuri with a-xii mimeani I'§&:I;}I'£§S as an % i9.{}8.2€)Cs6 iz: Cumpany Appiicaiiun Nu.93.?2-T366. The said rcpuri has been accsplcd by {his Ccmri.

I1 is pursuant tn {ha above, ihai the prsscni K V' This Ccmﬂ had urdtzrud adxreﬁiscéfétziii (if (hrs. _ §'§'LE},'.'i';«3.ﬁ --¢A,:-I1 . _ _9¢ _ 0} .1{},20G6.

The ﬁoilotving ha9e~._.f{3'cd éht: above pciiiiusz, 2:} MCﬁ§aﬁ"}»~.'@T:ma:",ﬁiééiirning Ea: be 3 share Emlder of KLCCL., £c> cunkcrndiizzgi '§'3g:;-"izaii entered inim an 21 '2"w.'.":IIlt':§}i dais:-d . Vvv " ". g €35-07}??? \§Ii£h 1I:e:.5'th§i*aiV}g3~;:iiiiunur, whereby flu: said pc{i£iencr agréaécf liyzgcil sharts mi' ihc cesmpany, subjeztzi 1;: Lin:

1 Eransftsz' 1;!' shares wuuid ht: vaiid Lzniy if the win£i%s3g~viIfi uaiier was ufiimaitsiy Sﬁinéiﬁgiith Ii is ihczrz-sfertz ciaizzzcd K Véaid objrcstzior izuniimzes it) be that: bansﬁciai uwnar of .' Shares uf KLCCL and Eha: ihc: ihird psiiééener vemuici "Ewe no §<.za.:=u:s~:~:ia:1di to prupmmd and approve: éhcr scheme' C-uuscqumiiy, it is €.§{.}3}§6§}£§(§£§ iiugi if iht: ubjtsulur had caxsrciseez' his 2 win as the: holder of ihc above shares, 3: Liza rnceiigggé-iL¥'¢:{2nSidcr ihc Sc-hams, he srmuid :30! have vulcrti £22 faurur of ii}-._ V L"

It is furiixssr conicndad that £%zc;":£}rs§. a2id {sc:e.?L2r.2?.fi have no imzuswsizzncii la: prLape}»u:;}§~»..§hc ~.-é{;h§:ma:VV as "Hi? rmk Lmisidcrzs. Timy are mxilhgzr crcdiiuﬁf ;:<§f":sf§'1:~.1rcH(3It}v.:r*.s" fof KLC-CL. Parser:-:2 other than Q1036 Scelivxl 39! uf £11: Act cannot be p£!¥;{}é.{:{£d SQ pzfa'3¢f:i:u':z§}"9;i3:;»: of Arrangement. Ii f!I'f§§i£3f>:'1.;:(.fL}!31t:iE£.{:£§LAI " Ofﬁaziai Liquidaiur has iniliaicxii.v'mi:si'<sa$2£é2n§t:. against pctiiiuncras 3 and 4 far zxua-reaciiﬁéétéipriLzfihrz ':~:._iai+.=.;;_I':"'1rz',-11: L2fAiTair3 and as regards variezsa A acEsV_~'e'.if ;::§§s£}:asaIi£:bv.§:2.t,t§'uding nan-repaymcni uf mans stscurcd '(few of which ii wouid bx: wimiiy um:ihit:a§ and rmé tsfzcivisabiey as a mater of pmiienaze and want of !;(33}i"§(.i£?¥i€:¢} [:2 permit ihc petitioners {<2 prsjpmsxxi any scheme. b' it is cznpizasizczd ¥.hai the ptsiiiiuzmrs are guiiiy Q? 'V,z~:upprc§:s£un ef ihs féiifii of pc:3s.i@22{:3.r' ef iize misiﬁsasanw % 39 pnmsedings, which they W't:}'t3 bound {:3 éisciostsf:unvd.c§:""L-Sc~2{i_u:i'» 543(1) of the Act, ¥Z}Cf{)I'B this Couri. V"?-'fI::'pr;>p{;¢se:g?i. 'ié; dfxiy 9 T dtitsigned is cave:-up their misdeccis éu_1<§'--is. hcrz:.:;u £¢};»~?>fe V1'::jé:z;§§:&3;. summarily.

It is aim pointed mnpiuytscs agaimsi whom n3§si?:a3ang§;.pr;,;ccg3ii§g£{ 'majoriiy wind at the meeting scheme: would ne£ have bean. e:c;;-:1.!s:t;d¢:L!, ii further furiéﬁcss the eimumsiétrgce bum: ﬁtiﬂs. 1% is uonittndttd {had it is a mailérgji'.r¢{§ufd;._iée'§3¢;:i:h 31¢: ptsiiléuncrs haw: drsliberaiely §h__ai i}£é"i"ii--£}--::.:ir of fin: ﬁrsi wiiiimncr SK. Maxéyappa :4 simiiar Schema uf Axmngcnzcni bcfurc: Lhisé Cﬁéﬁri. Division Batch cf {his Cour: had calfcci upugz him to aseriain dapusiis, to essiabiish his bong ﬁzivs, his had £'i:;§. 5}-:3 Si). Tu wmpemnai ﬁzz}: dciauii ihc said Mariyappa had ' ... £zgai:2 agpraached L1-Iiss emu"! $.13 have an mder, vaazaﬁizzg 513}: cf gkrdcrs waged in grcnciing tzriminai cases and bcfearc {he cuzzsumzzr @ 3% forum, restored. When again a cheque for 125.95 lakh, a_:_s dcpo:sii and as 2: uundiiitm pmcesdcnt for considcrdiivn of his ":_1"p;vi'i*L;.:i=£i4c;n, was dishtmurcd, this Court has taken a very stiicl €v'iTz::\5v'£:f matter- And it is therefore, cIcar:'E}ié:£""ihg.: "Eh:-, AV pciitiuncrs is suspect from inception.

It is contended [hag {he .du::§ Smcifyiiihc bcnzzfiis that will accrue in the «cf KLCCL, if the schcxnc were iu_ If-ﬁg .ﬁ_1I'¥}!t=IV'V Véhat then: xvesw inegulariiics at the mcaling hcliingi {37L{)8A.'2(}(}I§. It is stated that a repmseniation as ..g:fbjmé{:3f""l$eing an agrecmtzni hnldcr its purchase L-.1 pcliiiuncr No.4 and lhemzfert: being entitled £0 Av.-*"ue_ir.*. 9:33.-; by the Chairman of the meeting and lhcrtzfure % has dcpzivcd of his right as a shamhuldcr. Tim pmxics were Iudgud at {he milks of tin: counsel for 1111;: pctiiionesr, as ewidenucd by ihc paper publicaiiun of £318 nuiicc of 3 3?

32:: matting. This was inbgular and conlmry £:>_«~E§§1c4i"3i§§'n.p£i:?§e:.~; (Cami) Ruics, Th: pmxica: uugiﬁ £9; }1£'i}.{'¢ L. Ofﬁciai Liquidaimt The pmxiws WQSR: to be gxn V»:".:':"V' Huwcsmr, proxies wen: It is a grave irmgularﬁy for ihtﬁv_f§3a:%u§3.v«i}*,;i{:'§3i.€§;--V 365 wind by ﬁling wen: not aflmsvcd to 21913 i2.:a va::Bc6n.ma1§:xia!i§% affttcz-ied.

was significanliy abscm at the meeéizzg; Thcré wars' ihcrtwibrc IREIIQ: Eu answcr any quczrics abvzﬁ " ' . V£?1c.;:{§1?Ipé;i;:;, " « .,_ ._ have {failed Lu fumish ﬂu: ialcsl ﬁnamziai V . slaiugarf cﬁmpany or the iaittsi Audit rapuri. VA " jhc scftemc is siicni an ihs agpeci £21' the (Eats; ﬁum which A j wmzid be paid.

Gbjccliuas are aka (Had by ens ' Vasanih, whu chzéms as the Frgéiﬁéﬁi éjzf Assmzialion. Ii is claimed lhaﬁhf: Azgsiugialéun is registered under the Ami and cunaisis :3? 277 ;»v-'%'iih KLCCL.

The objecﬁnns are    by this 9316!

objcetur.

§'£§:§ti«.V.:'t_§y Srimandar Kumar to £316 pcIiliun"b}f way é>E_.éi1AﬁIa;§:p§§.§:§éiii£3n in CA 1372/2806. 1%}; EM': 'pz:..£.i£im2cr:;, ihe first ism; are insétzsiorzs Whtxéﬁ V iz§i@£12i§ciz1:_§s; guxlawfuily lake-over (ht: vaiizesblc asscis of KLCCL. shartzhuidcsrs or creditors, £0 be cligibiz: Eu ﬂit: any V'..,app§iu:&éig§§1 £3!' petiiiun-; undar Seciiun 39} av? the Act. Furihzzr, tht:

V."V'.g.2E§'2£:If{--peii£i:}ncrz~: art: aim nui wmpcicni £23 53:: {ha peiiiéen, as éhczy .,.;a:'c facing maiilxasam:-e pnycscdixxgs beibre Lbis Court in rcswsi 9.? {he yen? cum an . Unisss ihtt : are ahrsarfxraiti of ihcz irre fuiarilitzs, , Y 3* $3 ihey camzui Em pczmiiisd EL: pwpougzd any scheme. @ 3% IE is ceniztnéed ihai {Elem is as infunnaﬁun forihcuming :3? if}: business pmﬁic of {Em pcﬁiﬁencrs. The first pelitiungifwiag iaéé 2: skim in 25.55 iagh depmsiied by his late {'a1§1c_1i;"i'1"1'"2§:1v'-'ééfguffetj schczmc and the second pciiiiuntsz" has depusilt:£i"a' {:?_'_uI"ﬁ . without any further indication uf ihfsir x=ja:'}1c22i*ex$éii,'i1§2i ':;r' mks: t}\!t:1' {ha affairs 0f the eomfigity. Th}: i1:"21<.t.-z1_iiT'<'3V11A A'¥:'Ai¢"§".€;i'£:L§2;l:iI"(3 1322:}? assets :2? the company ﬁ2:f__.e: mert:V.R$j.t3_¢iv_re ﬁzz: psirchasc and iramfcr cf ihe: cumgranfs $i:a._v'cs a£ zmdcr the artists of the Court is 2_a$}i: 3 §§;f..;_;j:2i:§a__ }L_ is cL='%;;r:1i§::-:i¢:~'V<'.§ Ofﬁeiai Liqzsidaiur has Edﬂtid [<3 '=bring.Ciei.jih::"--giit:n[i€:éti"'{>i4 the Ctmri of the pending mﬁsiitassamsc éhe pctiiiontzrs. He: has rmi adj udicaicé [Em <:iﬁira_s ii*::: s§:r£:¢iiiurs and submitivd the 1-zsztitiemeni lists as per 1116 (C-utzri) R1119:-ts: 1959. in $111.: absence vi' ufﬁeial 'S£:viﬁ{:::ﬁeni lisis, {ha vain: of 329133 puiltzd on the basis 01' V' 'prmrisiuna§ §i:s{:; dc nut have the stamp offmalily. E 3%-

Thc peiiliuacrs have failed to Furnish the of the company. The Iaiest Balance Sheet 0:

unavailable. The abnormal appzvacialién aigzséis u_\?ex':1_Ad'c:s;a£3t: " and halfis not taken into ac4.:.ou::{._ 4_ The pmpuundcrs hays I'u;§gfed.:.g_1nd Iimil the inlcrssi liability to the ham:

A cumpény have news: been listed at cannot be vaiund a! mom than ﬁicc tht: same at R33-9, the petitioners ~giéi§;iqvut§ni dcbior dirociurs have conferred uf R320 per share: on tfxemselxics.

that the shares ska}! cumpuismily siand the scheme and have uﬁbrcd a lumpiing price ' while prujgééting (hr: company as being insulvcm, 10 deny principai ffﬂgtmsé {L} the ciespusitors. This is an abuse: of prowss of this 3 =33 pmlraulcd on account of the ubjcctions ﬂied, the app§§§:§LﬁiS.j' that them: be 3 dimciiun to the prupoundcrs of _Eu §v4.¥:'i§.§;:¢ their claims.

In Company App1iua£i{>n*v--.L: 'I.f3av,.i Ié?»/'2QG8.,. applic-unis win: claim " Vvibgéihcr in the Company in liquidation company petition ﬁled in the year on 29.10.1996 and since: have afaprcciaicd in mine. at. Bangalure is worth men:

than RsS €»._ ai Mysore: an: word: aboui Rs.§j{f-tom . d§::::.~: he the: Camp:-guy which is neariy 1132.6 ewe 2 Crew in the Company. it is thus xulhc propériics of ﬁre; Company are brzzughi 1:) dues of the company which (31,; net mtcﬁcd Fig.2? be sciﬂcd. Thcmfbre, it is suughi, iha£ the Qﬁiciai Liquidator be directed is bring {ﬁe gmperiics £9 safe: by pubiic 3 =3?

auction and Eu» rcaiése the asstzizs uf the CUIIl}J3I1}f....V;';§3iV§:.f§:--.' f;N€3¥;§{3 beneﬁt 2113.

Company Appiicaiiua nu.I37fZii2G:€.)5" been {Had by the petiiiuncrs aA.(§}x;:cE§g>jzIv_:S'ecuré£§ Crcdiiur as mgards §:§ri;§n AfQf"'acia;e:piance L31' certain other amminis as '§_«_§ of the Recovery Ccriiﬁcaée i:~::~;:§;.e-.w:§ .;VlV.fjj\..r ﬁribunai, Bangaiurc, which was iﬂiiizdmxvn in View of tilt:

Mame siaiing ihai it has as ubjccliun 'it; {E23 schcnzé' eexiain Ltcmdiiicms. ~'-fF§;é'Counsé:§"agggzﬁaring fur the: respmziixre pariiczs, and Shxi S:7ii':§az;z;,§;s_: 'I\':V':2:::iz9:.=", whm appeared in persun, vvcrc: ail heard ed A 'A from the: abuvc ubjcciions, 21$ the zsiagc: of

- .'.--<;:_§n:--:i<i'¥.:raii§.):1 0.? the prcsenl pciiiisgn an iix mariis, szevsrai " 3' Iicanis fzavaz mama fmrwaré. Tim a iitsalzlrns art: undar Scc£§c;n . PF' 9?

391 cf ﬁre Au? and me}! are as fbiiowxr 3 33 In CA. S99E08 {here are ihrtztz appiicanis whu eziaim R: be juint huidtsrs of 300 shares of Rs,i{}i'- of KLCCL have submiticd their shares to that CHE-i3} Liquidahifr i14,§:*:h«ev transfer of shares in iheir names. 2§.11t.i~2s::r:i< }t.'».':'['.-'Cvv'4£!;1*'.'tI;"Vﬁ:EI'S§V -'.:.':_§«':«.1x£v.1u « ' pres-::n£ 3 Scheme ufArr«..:ngsm¢:n£ {by ﬁ;vi'%.aai of ihtr,.e0tng32£;gy...v'I"§2.;

appiiuanis rcfcr in ﬂu: of Arrangcmtml pmpuscci ihzirygin !e»;siii§§r:I':Vé:}'§~.-2:3xi;-agnienziiiig {Ba}. Ebert: are ob§cc.1i(.ms in the Scheme' wag}: Qhaé {hertz art:

énxtguiaiﬁics"§}:{5i§1:: iha! {he amuunis £9 5: paid art:

inadequai?e, "

._""a{:L3z;§siaiV;:r'£ng'I31:-------va}uz: 1.:-E ihe asscis of the company and {he pezmicncy of {hrs above pciiiiuri sacking saizaiian u_fi§z§..~g Szchamc, the prcscni appiicaéiun is ﬁirzd prgxpusiag Sche:i;¢.: é2{' Arrangement fur !'¢;3\f§'.-='::!.§ sf KLCCL. This is 911 {he V' i'3";:.;»:¥..i_11g--' {hat the appiiuanizs have :1: &£¥;v:r Scheme: cf Arrangezzzcni the em: ptmdirzg cunsidtxraiiuxx. ii is smicé éhai ﬁre Ei?{?%§C3EIi.':£ " are in ﬁle §}EiS§}'i6SS uf mgazmy §::n{.§§:2g anei jcwcifzry mad kiwi £313}! 3 xr §§ have the necessary ﬁnanuiai whesrcwéihal 1;.) prcssni ihc: sa:'i7{¢r:1t: {(3 ensure that ihe ﬁnancia} requirements of ihe s<:%)_.t:1r.t_1;'::.:arz:'*;V;~ ﬁiiiy saiisfimd. A uupry of the Scheme of Armngcz:;:.:n_i4'~-is':ii1'::;::x;t§iLi~a,:~:b Anncxur<:--C 1:.) the Appiicaliuxz. Acégxdiug jiti--§h}.%,_3p;§ii.(:z«:;i(:sT.$36.: ' reasons, which haw: neucssiiaizcd jusiiﬁxzd' fihi; p1f§tJpé3;~::<:'{i; Scheme of Arrangcmcni are as fz__'~.I_§{)-:§.{s;--.._» (3) The scheme of $;x:i.I_i _ :.}*.nurz.: to the bcncfgé '_'§ht; Vcnlirt: ciaszs Léf iiégufiii cntiiicmcni in terms @119 hdepusiiurzs being in iargc ' nﬂ:_1_j:¥3«:vrsVVV' " ciderly pcugie vviﬁ stand ' ' fut: present scheme. The schcrnc iargcr bunxzﬁi ihan any earlier :1If:§§:i§%5§1x§;"_jprupoundcd 'of; my person.

.' ' cf the sacurcd err.-.éiiur wiii be paid ix; in {anus of the xchesmc and the seuumd urediiur what: is new awaiting paymcnl wiil also rt:a:.cit.~: the sums as indicaicd in the schcnze in tiisschargc uf iis iiabiiiiy.

(2) The shaxehuidcrs of iht: Cmzxpanfz wéli rcccivrz: ﬁzz:

entire vaiuaz Qf iimir shamhuieiing and in adaiiiiun 3 wiﬂ :1:<;civc as prctmium aaf Rs.20f- per sham. This in tune w§£h ihc pr::s:::n§ schssmc pmpuundcd Manoj Kumar and uiimem bzzfurc this The cniilicszzcnt of that :s§2arz:hu§L§¢:rS, :"'»s§ri§§:' be 1 maintained.

(d) The xraﬁuus zsunéry cre<iiiur'is«Veui--s,{ zihc 1ia.b1Ii.£icsn the corporation ui" {:3-iiy Ahtyf 2 Mysurc, Pmvident #1:}-t13p§I:cv.}},r::A§;f-A-2 and wurkzncn a-{so _ (en) The Cumpany xylfﬂ :;§ _1;:.a11 run and manag::«§{.g'*busi;r1cs§: if: !.¥«1v:§"f;§§f:::$cn:Lf'i7£:rIzz or in any oiii:§1'i§3_:;'i§'§§§<: Appﬁcanis cunsidcr csscsniiai, "¢;g.>i§.*:;i<iériVIV1g..'" pusiiiuxx fur nun banking §1i2».sz;{:ia,3 ¢§mp:gﬁieg§}' gxj ".%"'.h:: iniemgl gray wouid Siaﬂd beneﬁted 5;; ﬁn:

'"j;:{r<:s¢&2_i_ schcmtﬁ' Ine;v§c§c:1 3i'a1§y, the appiieganis submﬁ ihal Lhc mceiings mf «. h : :i;}1art;:hc,3I(i=c:§":-: be dispensed with, as 131:: :59-ht:m¢ prupounzicd by $312: 'p'+:*iiii9he:rs herein above havéng, mcc:iw;:L§ iht? cunseni cf the u siiarchuicicrs and as»: the: gmszsztzzi scheme pmposeci by ihc: applicmzis is more bcncikiaf in {he sizarchmidcrs, iixe mezziing mag}; Em 9 4-1 dispensed with. Farther, the-re besing only 911:: sec-urttd creditor, the interest of ihe, said crtsdilur is fuﬂ); pmiecicdt as ﬁn: present scheme ensures payment of the gums as indicated £hc:r::i:1;~.44Ii2:;_ui}1r as ihc dsposiiurrs and unsecurcd creditor:-*2 am cu_xi§:;t:ri:?::;{'?~--.. present scheme ensures a :signiﬁc_ani.__b<3n£_:ﬁi ' a aijH impmwzmcni met the schema ihai i£:.pwér_1£§i'i1g_g£::;:i3i;it:;a'§i§;;g;;V4};c: meeting 9f the dcpusiiurs and L-.;i:"s~:+x.:;::r;*:{i Vg:r&:_--i§l£'3r3VV"~:ii§}r' $131.2 bk: dixpensed with in ihﬂ_é1i:{ﬁE11;g§§'X{5,'§} iSvV_cQ{2§t3n£it:(i then if {his :.:m:z"£ its ref iht: View ﬁnal aha mcciiIi§.;:::'::br?:;««._£g§'§f§€ braid, appmpriafat: aiirﬁcliuﬁs may be $3;-§§L1é:s3A..

there am litres: appiiuanis, ﬁzz: ﬁrsi "2'.'u;$3:Ii';.i_§Vs5aVIViV'k';.':':€.!'I§E€:¥€.l"L'=3.§-5 ihai his falher mu: GK. Seshasai Shawna imicis 2¢3'§;§' L31' {sf the; rtztspténdcni mmpany, As he is mid and infirm, V. Eiséappiécani is auihmizged in prgguse the zschtsrrnc on {he strength Aizéif 'iii: sharsaheiéing Qf his faihmz 1% is aziaizmzd 'that iim sszcgznai appiiuaxzi is a rzzgisizswd mesmbcz' uf ih-z: maps-neiami cmnpany ami Q .5;-3.

Ehe: third appiicarzt is an unsecured crcdéiur of Eliza: rg~3pzi:j;:i_§:'1ivi,__T3'3c prupucscd Schema: of Arrangcmcni vi" the app!£_a*::nf¥$':'iga b 8 to the appiicaﬁun.

1;; c..a.2e¢.31;2ae9, the .§ia§:;§s~§$'.= §.§ §%k:§dkngrem§ ef shares fmm diﬁércni émgiglﬁfedvvgnembers of the rcspondsnl cqmpanyl' shares. 'ﬁat:

appiicani claimgi §";3s ;j"Li.'r;:}§..':;is;::%.v§:'V}'l'1t;----:;;§§:<:r<::s ix: the year 2092 113: the cumpany. Huwtrwr, the nan%t:s __m3:<i£im:<: £0 be in the register of l"I1€IIlI£)CIS!'£.}§'§hf: Ii:xp§5z§dc'::i'i..}.{::L§mpany, inspiie mi" the appiic:-mix s<:skit3_{ga irazxsfef ":=:.{:V sshaﬁ-:63 9.-*i£.h {he (}ﬂE::i;»1i L§qu.i(iaiur. This :5-;,_9:p'i.i;;a:z£v iﬁatriﬁérv submiis lhai he has} suughi the assixiancts of his 801?' i'<:V'rt:\:E£+§:3}j::z:§:;i resstruuiurr: the rczspemirsni cumpany in view :3? é f.'a"ii-§12v1g«:_}1:§a§!§x, and acknuwicdges that ha: wuuid supgauri the:

'=$'L:ht:rﬁ't; 3.12;' rtvix/a} pfaﬁﬂﬁifﬁd by his son in C.A.N<.3.3fs4f2ﬂ33 smé

-.. "hmié;:z: has Eieci the 3. iicaﬁun smskinf -rmissiun if} anicr ﬁzz: __ E3 is 9"

imaamc uf {Em applicarti in iﬁc simaai uf iha éransﬂzmrs and £0 Liércssé '% 4%-

pu§::¥.e:d cm: that the said ubjtzciur had wkzci in ;::er2c_>z2:,.";*:§£:z}1:fii;;d in {he Chairrnan's recpurt and indi:.::«.:£e:-(E at page 'Fhgb very objcscior had ezariitzr raised ubxicsjgliunsjas i'3;e' S(:e;.:9c§i:»tr;f ﬁne ' suucaﬁcd Vv'clfa:'c Associ:.»1tiun.[' azf Ehtg;§i§pL}S§i':.Jf$,A,_: ubjtztzﬁexss arc: in his i13(ﬁ'.'i£.iU.v2:%\:I"".x'{%';§1f}%§Ui§.%f._.' _ﬁIV%'§§t:vA:vvii(§0ub[ zsgxd suspicions cxprcsssd ggussfy cxaggcrdied. I1 is he whu hat; :é§i".i}1c Sharciztnidssﬁs mucking sc::*,-l¢L,_53:";g_§;'*,.~» lg: 'ﬁésizcmc as a sharzshoidcr {.331 [ha fgL;§.i11_gi'£$aifV':§"v.f§<.1ha.§§> an agrexzmeni in pumhasc shares Q26' am} ihcrezibm was ihc righiftzi mama: of :~;har::s ~s;§a§~::;ied by iiuc fourth pttﬁiiuncr and '"'«..&;a:cc:if§§i:2g--§§* v.shuuIcVfV'be"'pcnnii1cd Es: vote. This Chainzzan had '_i§zt: gmxy cf Mahala Kzzznar. This Ems btzcn With L31: Chairmazfs repauri 0? the meeléng sf {haz- in CA. E\¥e.:~.93:'°2006. IE is apparczxi ihai {ha said _ is aciixsesiy miinding wiih {he said Masha}: Kama}; aiong " wiilrz the Pm-sidtrni <3f£hc Weiikru Asscmiaiion am} uiizcrs in mixing U umenabie ubjz:;:£ion:a % $5 Enauﬁar as the inieresl §?d}--'£:ib§£: is concerned, wh§'t. ?h*iS;"--g¥2s of the srzriuus ubjc:c£ium~:, put fzrrward by Srimandar mi' ihs Companitss (Cum!) Ruics p'z'*'«:».A:-"s§'i':i¢.:A::¢_ for .;pa§?2§3§:ni'*{2f £§~.% 7. inicrcsi. per annum- Whereas iI1:c ptA:§ii..£Ai;;$r1;:r3 inicrcsi upio the dais cf 2'1£"1$'i'?<'%V; %9""/;:7z;VVii1r.'*v,z*2:-:».:§'i¢.:V1'V, upiu {he daic: mi' gf {§}(:13Vv]'I.3§i};}%I1t7§}i airs:-ady maﬁa. The zwtemgcnis proceedings in C-.A=64{}f?.Gi3i ?_:}:1"r.~: e;::-<,_32'?1:.:;iLi4_c'ém,ii'5r.:f1;'There is no urder passed famlsnikag _an}Aé" §iab1'i££§e"e_;.:51=__hulding the pciiiiuncrz-: guilty of misiltasamtc. v 4; '"i"§*2c di1:ec»i;3§rS KLCCL have been azozziinuouzsiy amtnlpiiag §.€.3._It?'<.'i*.»«'Ar.3 ﬁ'1i§'--..§.EQIIl[32:1II}2' frum 1993 unwards. The misfcasanct: been inii.iaic:L§ in tile year 2001. The same is nui as gI.:{;3i!.i'lé.Vi.'VI".:¥L§$'$.V¢:.'3(.§ by any uf {hm majuriiy wfm haw vuécci in fzzivceur Lrfﬁuis scheme. Hausa, the aihtgaiim: 2:3? Stip}3I"c3m~:i£.3§} of £°a:.:£:.~; am} ﬁgaiaﬁiies are made ayniy 113 prejuziics E1223: mésxti <2? ﬂair: é.'-€.}¥.l1"§,. insofar as ihtz pmxies bcingnlada: ava%ia.bi<: ihruugh ihu s.2ff§z.:c: of 4% the cuunxsi fur the pﬁiiiiuzzcrs is uunccmed, ii was wiih §_.Ii'c. priur appmvai of ibis cuuri. This frxaving, been acc¢f,ii'ed-«'.V'_m: 'é3:y;.i%¢§ inctynvcsnicszxccs la the aiepusiiors and oihcrg a13_:i"i'n--..:{§;c i::bs¢:nu:;'('Jf any prcgzzdiagc caused, the Qbjccﬁiun tines-g"'z1;.§'i um; v€:oxi's§dv.:ré.-ii-T;&L;n anti is not an inﬁmnity, which ya-Quid deftéai jﬁhtt 35!} {fits faa:r.: uf Eire uvtzrwheiining rnajpriiy §vl:';_].1Lif§Ai§:'..':,";'iZ':!}'?l"€_}5.".t'§#.L*f' J11;-A: tsgﬁlxcxnat when the statute requires the Ciécisi~on,_§:§;f:33E$1§mvv:M\i;aV:value of ciass <::f the credihzrs or mgmiber;-; 91335.: as: "E§i¢.._c2~1s&«r%2ay be, prcuent ané binding ";)n" 391(2) of the Act. It is puinécd out {hat Shré Sriz11Va1:dVgr _ whiie cunkznding that proxies were and ac;;£:pi:::a§"as on the date uf {be meeting and were 1'62: eunlrary to 131:: staicmcnt math; in para 15 in wherein it is conceded that lhc proxies were ' iinm.

A .?5Insc2i3ir as the utziecliuns by Shri. HS. Muhazl Kumar are ~»vc<:mcemed, it is cuntcndcd that as airtzady stated he is hand in 9 é<$ glove with a minurily of others and the objeelig.2.rte" are identical. His contention that he is an purchase shares and should be alluv£§e<AAI»V those shares, was a repaesenmﬁiugg Knmar at the shareholders was my! made in person and {he Chairman at the meeting. He has shareholéer nor a creditor of Que 65.07.1997, entered into by price to the agreement in favour of the first peiiiiuner, HS.

Mehan net]. laken any aeiien lo enforc-e the V' .agrL?efhe;2£ i:~z«1;.mi epoeiﬁun to set up the same. In any event, the V"ee_:31rary to Section 536(2) of the Act as the reependeni was ordered to be wuuml-up en 29.10.1996. the agreement dated 05.07.1997 apposed he the e._'a?§fove"&pmvisiun. I1 is bought 1:: the alteniiun of the Couré thai Vj ' ''i»4ehan Kumar originally had sought to pmpozmd 2: scheme and at A. his request an aﬂidavil svasﬁvm by the third peiiiioner, which 1333 has been rcﬁsrrcd lo, dated 13.08.1999. Huwewr, since the had failed £1; take: any action to revive the cumpauy, the B1irci'p§§i«i.£i'u;aer had joined Late SK. Mariyappa in propounding 531116 not having xnattsrializacd, the pmscrri--sch¢mc_Vg;>tu1§u1n3dé4}. ' A scheme pmpoundcd by Mohan was mjcclcd by this cuurl. Th: is Hi '[13 1hc reply ﬁled by the petition:-Lir' 11; pf Kumar. Further, the misfcasanﬁc ir.-lot having been adjudica-;:lcd,_ sigma is irrcitzvani the pciitiuntzrs have adcifesﬁeti 'ail of the: wmpany and the pc[i{§L§--;:itirs.haviri'gA. fgfivfxra-{E-.1cic satisﬁcd this court on the proposed sch:::nV1c,_pcnn4iVssion was granted in wnvcnr: {ha meetings. Mohan Iiuﬁiaa' been pcrmittcd as hi': had no legal right is ' iﬁrvzé the meetings, 116 has no righi. it} challenge the A ' a;§;;2fiév_ai by the majuriiy. The further ubjtzctiamzs as in the majuriiy nﬁﬁ being in favour uf this scheme as the majuriiy had not aikmdtzd 9 $9 the: meetings, is a misinlczxprctatiun of the V§a4{§.;.£s ﬂu the: majority being present and voting.

The objections :.}I'Rc-at ihc ones raised by Muhan Apafi' {rum seeking la rcprtza-;c';n--{...f}1t: has alsu held brief for Muhan which cicariy indicates the Thurs is no substance in of the members of the mwrd that out of 273 '§);'%ﬁi;}ip'd{6d ad. the mtxling and 62 had vutcdi in _.fav¢.$u'r .Arz:s?L:lu1iun and 6 had voice! against the is hence nu signiﬁcance in the cunienéion that {I163 Vi'n1¢:résiVi}f__1§i;§"£::cmbcrs :3? the assucialiun is aifmxied. n j as obj-striiuns ﬂied by Smi. Vedizavaﬂri and Smt- ,..'i':.§!;Ks}!;gﬂ"ar6 conceznctl, namely lhai the price: uffzzrcd per share 3! '' R3:30zi~ undm" the pmpuscd scheme is vary iow and that peiiiiuncr U nos. 3 and 4 have: nevi disuiescd the details of (In: misfcasancc cﬁ 56 psmcceding and that peiiiiuncr nus. 1 and 2 are not ciigiblc to prupuuad the sc-heme: are net tenable as the said objectgrﬁ not participated in the msciing either to appear: scheme. And Iizrihcr, thcy are ole;-z::.. ,r:;laii_vé;$" objectors indicating, an active cullusicﬁn i:i:'.i";£§;s:irr,sL1§'!.}_::'i::.«t; Insuﬁxr as the objtsciiunsp others are cunccmcd, the majuriiy " vcltzd in favour of resolution and having agtpmmﬁd v{i2;:"»%,3ch emé".vihcir objmzlionzs are not lcndblc." ir1.Ii{fuida£iun since Lhts year 1992. These ubjtegturs 0r..gih':§:r sf;-egfehiyidcrs have not come ferward with aa}; s.r;.~h-acme: hi z'a=3riw:' the company. The la}!-claims made: new are ha»; stage cf the pruccudings.

C.A 1*-Eu.399,r'08 is concesmed, and the ubjcciiuns '=~v.__"-»ssuugh{"it,;__ %i3t: raised by £hc appiiuaais whcrem ii is sought In be VA uni. {hat aii {he {have appiicanis are Lula! stmngem and have xzcélhing in 411: with the company in Iiquidaliun, ii is ptyinied Qtii V that ihzsy haw: juinﬁy purchased EGG shares of U145: uumpany {rum § $1 Shri. Sumangalaxnma, Smi. Sharada and Shri. paid full cunsidcmiion at Rs.3{)f-- per shares. the share irdnsﬁzr furrn. The: {S9} 1 This is at a stagc: when the abqvcp' peii:li:=.3_n"is uginsidégreué {'e§r,

2.-zanciiun. Furihcsr, {he ciigciose that Shrimandar Kumar, \vho;:}.1;;§*s scheme on his own behaif as wall as.»9n fr!' as a proxy is a witness in ubviuus muiive of ilwsez a[;;pIicaAj§i:§_::'is;»V'1:%.g: In any czwcni Lhc albsgcd Lransfekgyf of secticm 536(2) of the Act.

Such a uafisabtivaxn' validaied by seeking leave of the:

pest-£:~.§¢£u~----approval or validaiiun is not conicmpiaied. L _»ﬁs;:;;_§§_¢i1'zTii:rz,g :a¥'"&§c' appiicanls, this is a wmpiettsd iransac-Eitm and The applicaiion ihcrczﬁart: will have to be Thc applicant seeking dispcmsaiicn of heiding _ 'njeciéxigs also cannoi be considered. By graniing such VT -dééspctnsaiiun the applicams camwst be subaiiiuitcd in ihc place of the peiiliuncrs and the pmpu:-scad schcmt: of the applicants cannot ?7 steai 3, march owsr that cf tin: pstitéoncrx wiihoui ihe_4v3gfa_¢T'3Dcing appruvcd by the mtzmbers and others if Ehc resp{_m::3ci§i"

Mart: significantly, the applicants have »T{Z)4I":'»1-$t't'1'I1€'Iv¢;.'i"'4t§1t3 é0Ii§.t:Ii'i_V 01' L. ' the secured creditur. The: secured ¢§i'1;di!.£3f ha\?i'n,g»fi ied"

bcfurtz this wuri cm 27,1 1.2003 _'{_z11VVAV':;;3,:14'§:'VVéi};$.'f2Iie::»,:z1'Es in dtzmunstmic Ehai l11£:~..;»;c:;.:ur£:3 "c.f§;diiur '*.\'L}t.'l}('i éiisu make a cummiimcni as regards the: by the appiicanis. The memo abuvé rtéatxiiéz 21.3' J}..ii'i€J'v.&.42~2.:.§ " ;.__ , is aisu to put an and in «ihi;_~;' and for all and imprswc: the ; E3aiaI1c$ *3§2§_:f;l <.3f ii*1t: bani: for any reamn if this Hé';fx1'§§Ar;_ nut approve {he captioned ﬁfgzr rcvivai uf the uumpany under The bank isal Iibcrty to recover the fuli " giﬁzpuni due under the recovery ccréiﬁcaits issued by n : V my in cm. 73451995 dated 29.02.1995"

1; is highlighted am a rxeguiiatcd setticmeni wiih the VT ""$£%;:urcd creditor to rtwcivc Rs.8.65 Croft: in fail and ﬁnal 3 53 scltlcmcsnl {sf its dues in variance with the recovery cerﬁﬁqale held by ii is a Lzummiinlcni madtt to the peliiiuncr and scheme tasks {in this cunuezssiun, which is neither 4_ wnicrnplatcd to be offered {(32 they-' iéiheir «Sf ithisi T scheme including the appiicanis. In siit7_\Ai"4.)_f the pertaining to the properties of and if {he values 0f the pr{}pGI§j:£i§S'~§i1'£: izgtaiviiapcounigiiuiéizapared with [he liabilities or am umpaggz, -it ;a me ﬁieiiiiiiﬁﬁﬁf alum: whu is in .-4 position"l6i'u1iiiipi}iii.%;ii}1iiiiié'-tichﬁiéiie' and settle: me liahiiiiies of 21!} deptisiuirs, 'sec-iumii ulhcrs. Thr: applicamis are net in a pa):-iiiitxn isih:3§1ur.i§':cii.cﬁiiimilnlczni, as the sec-urtad crsdiiurs has " '''v..,1¢,;\*\ .9!I1ii§f~'ﬁ(3£)IIII1'i1iiiili!iit3Ill in their favemr. On the ether hand, if are': auctioned as was suggested by one of the sh2£f'chu§.(3eir3'i'ét substantial parties uf the prtn::.:t:<'i:-; weak} haw: {L3 JE'§3:§}:4';ii(.'eii[§.Ii lht: assured craditurs and the balance remaining w-mile} iisgxiii xufﬁcicni to pay [ha primzipai azazzmmt. in the dcpusitms, M shamhuldcrs maid be M: with nothing and therttfurc i£ is contcizdtzd that the company appiicaiiun bi: rcjccicd. % 55 The zsppiiazantzs 2115:.) prupusa ihat they wiii pz§§=:~~a .b R;~;.2Gf--~ fer Rs.10:'-- equity shartes -=:§3d"'£}2tt;x:L¥}',I x§r£3i;§(3 ' . share capital is; be paid-up. The baiA:ar21a::'e_Vé.1rn{3£iiz!, ie2.V 13.3.30 Crests, appmximattzly. in mobilised by increasing au_il§uﬁ:~;£:§i_ Qapital 0f"i'héVVcumpaz3}I_ It is contended thatﬁxis is applicants caxinoi be adlowcd gzﬁbiic by way of pubiiu issut: to__1f§:x:i'vr; 'i§:%:;,j.:mn_pa;§§,£ i~n Eiqui}:ialien. It is 313:; puﬁxtcd out {hat ﬁn; ap'p.%iz:§£i:i;-:..._i{> -'zunangts funds through baraks. It wt.:s::§:i uiéarly ihai the applic-ants haw ms fmanciai = ,. ba.¢§:.¥r{:u13d uf £}i'cixf___g2}.1s..vz;. Thurs is no iszdiualiem of the manner in :i%.a>:;:'Vii:c1biiit.ic:s of the: cumpany in iiquiziaiion would be aé_;iVrcs$¢d;" assurance: as regards the tzmpigyees liaﬁiiiiy ix Ainn§¢'x%;:;iii as must 1}? ﬁxes empiuyceas am either stsiﬁed ::3s::wh::r¢:: at " --.. i3zw.«.i ailaincd Eh: age uf supcranmzatiun. Cm :;cve:ra} discmpanuics having beer: bmughi. la the aileznliun of Cami an addiliunai afﬁdavii has been ﬁiczi £0 state 8 5'5 that a rcviscd value: L31' Rs.40f-- wuuid be paid per The several alltzmaiiw: pmposais, which wuuid have in _ai iengih, cannot be contcmpialcd by dispcnsin.g_,'ﬂ$iiLh A_:jtt.>iis;:§S'D meetings and that tzxcrciscz is m.:j..._ waitzfe£n_i c:d,'*V. 2:' comprchvznsive: scheme has b<:£:::.__subz'ﬁ§iléd an:iV"2:.§prg3zvc_g3 By majoriiy of 3}! classes.

This cuunse} xvuu1(§V_f'L21fi12.v£;f in affording its appruvai and :;§£1nC}ji,.é£in Adig:'$;c§1émve;.'ihi--1~:--*um.1r§. may make such mu<Iiﬁ(;.:;;£iun bﬁhfezxcﬁuiai lu all uonuemcd and ihtzrscfurc the cxurcisg No.1' Vcuﬁsid-::1r§'ng the uihcr szrhcnw prupusezd by apg3i§£;an_is who u£i:'e..___i_nciigiblc or incomptslsni, far {he rcasens prcscni peiiiiun be aihswcd and 'tilt: appiie:-aiiuns

5..., W6.

" : Re§ £§nuc is placcd an {be foiiuwing azzihuriiies by the Cuunssl Gig: petitioners.

:2) Aclrnirrixfrczéor L??? V5. Garwzsre Puiyxier Lfnziied --~ AER 2885 SC 2520 .' 3

5) 'Whcrcin it is hcld that {maze it is prima facit: xhuwnlizai the schema is fair and wasunaﬁia and aim l}l::ﬂ::""1h¢ .fﬁiilliﬁiiﬂ majoﬁty have recorded their decision in Cm.-.2, in the absence uf any '»s;n1't;;«r:.*§--?:t::k.. V A:,tIV':jus:':ifv::f;~:L~:Vr.;;T U1' ' unrcazsunablcncss therein, L¥ug-hi nut in reject' In re. Hzmﬁzslzm Ltd W AIR 1959 Cal. 6}'? «~ xwhgyésixg 1%'iiLi1 that any sch:-zmc which in good faith will 19::

«:;uu1Tq'3"'-.1ft::I._st:nabl§; be suppuricé by stzns-ibis cf each ciass uf the mtzrnbcrs U1"

,, ._g;rv.:u1iMors uom;-awed'.

V . uAf§(i».faré}:gr;_:..il its aisu expressed ihai the: "majority in sxumbcr"

A '--...__rcpr<:~s§§iii§ixg lhmc-fuurihs in vaiue: ef the crcziiiurzz: «.3: class 221' AA our members or ciass ufmcmbcrs cemsmpiaied under VV ' * Sccliun 391 1,3? the As! ix uf mush credilnrs £1!" members prtzscni. and vacating at [hrs meeting and not mi' the iutai number of umdiiurs ex" xnczzxbtsrs. uf {he cazmpazzy. Z 3%'

e) Shree .rViwa.s' Gimi Xamgar Kruti Samiii and Qfﬁzen' vs. Raghumtk Baszsdev Somzmi, (2005) 6 ' "In cunsidciéng the scape of Sections 391 [L3 laid dawn that the basic J pmvisiuns is nuns: oihtsr than the E':-r_1:e€.i¢i asxcigrssniérai inherent in any cumpruzni?s::_ mf sc:tEi:.*;j:A2Teiéi égntcrcd inio bctwetzn parties, iﬁshuuid not be unfair, conlrary to pubiiu pnE--ia3.y;'Vuncgnstiénagbis "or against the iaw.

While éxt:é'g:i3iI:}.;g{ iii~:'«.. pvwer in sane-liuniﬁg 2:. scheme uf agrt:£::§n£:nL 'i§.1_é 'i::§.;$: in examine as {L} wimlhcr ﬁrm ;::1'£;:'.:isiezis»-9;? ﬂit siaiutts have been uempléad with. Cine»: ihc:

glidﬁ Lhaé the pammcicrs act 9121 ix: Seciiun 394 of the:

met, than the Court wuuid have: nu further 19 sii in appeal enter the cuxnmtsrciai xavisdum cf AA 'L'~£.«1'2c:VVV§:.l-£23.23 of pcmuns who wiih £hc:£r eyes span, givt: ihcir ' gﬁypmval, men in ihc vitzw 1.31' the Court, a better schame mule} have been aciopkzd.

8

d) Guiicuncia Engineenizg Enterprises Limiied vs. Gimi I/ivzzppar Ltd, (1997) 1 C'c:mp£J-404 {C4.P):

The: vicar of ihe Bombay High Gokulcbs Spinning and Wkaving Corny L] 598 Bum, is quulcd "

Scciiun 391 is nut 9111;» a e:5mylclcVCrg('§c, is in the: nﬁturc of 3 'Single §i'i2égw Cic2tr§1ncc5 tsystcnl to ensure lhal parties vVhul'~p:.:i i;r_> ééﬁcidablc, unneccssaly and efznaking repeated applications to the Cuufl and changes, which must to the sanctioned scheme, whose overall V feasibility has been judged by the Court under .' A "V this Act.

Lever Enzplogwes Union vs. Himéxsicm Lever " __ L:m':ed--.4IR 1995 SC 470:

Wherein the ibiluwing ubsmvatiun in Fertilizer Cczrpoméiorz '4 Karlhgar Urzizm 13. Unit»: oflndia, AIR 1981 SC 344 is cited "... ii is mat a part 6f the judicial process to examine enhcprcneuxiai 6 $3 activities to ferret nut ﬂaws. The: Court is least cquipp¢;i»».[F_ér_V_suuh uvcrsights. Nor, indccd, is it the function of Constitutional Scheme." ._ D A/ﬁheer H. Aiafatlal vs. .Mzg]¢':£t1¢:iIA 4; 595, wherein it is held £l1:'i.i._Vt'i:.¢;V comm c:....;.tia.._;.t.,e;..sa.mt is pcriphcral and sup¢rxrisory*----:«ii3;3 ﬁat a;§e}Eatc..v'QIhiIc acting under Section 391 Iikt: an umpiru in a game ufjcritgtcﬁi xvtiii the teams play their 'i!i{§vn2§--s$ and do nut uvcfstep the limits. But ﬁzirbjcctv {<3 the game is to be played is teﬁ to .. pEay::rS'ian:jvii_9tA.to the umpiru. The jurisdiction is therefore: it " --.3up(:i*vis:.)fy nature.

gr) Bofiers Lia'. vs. Siaie Ecmk uflmiia and IDBI (296.9) .2 Comp LJ 210,-

ii 'White citing with appruv-at the foltmving ubservation of the Gujarat High Cuurt in Inre. S£a§3zp11r,Mili.s Co. Lid, .413 1962 Gay' 395. "... ...It' is not for the Coizri £04 .s'cmtim".s:e: lire 3 $1 scizeme in the manner of a carping critic, at 3;:-iifting axperl, a nzeticuious accozmiwn' or a fa5'tiz1im%iS é£;r:£rEas'g§£'~'. {he eﬂoﬂ is no! to emphasize the l¢ne;c2I1ole.34,'V!é£:}%;¥zfir,{if E L and the amoztnting errvrs. The J the urclirzargy sharehqiciér =.§ﬁi:«:<1-'c.'i.s'i.rV"2,5~,< __ it:'--.s in ":1? reasonable arid bzavirzgmzs Iﬁté cxpmsscd that members who (in tin} called Eu consider the schema: reizcipl 1'iu{i't§ésV be permiitcd £0 ;*¢t1};'s;£iV"é;:i>jA§§:;jti'oIVi.*:.§§:'}V3I: hair splitting, technical or £2:1zzl'i--£'i--n-diVng ~ . .»~ 1;) rg Agazmzmmi cm; M2125 ma. MAER mo 63512399 :

A 'A'z1a'a:}Ai::g' with the scope :3? Section 153 9f the Indian 'V 1915 which corresponds in Sttctiun 391 of tilt:

1956 the Court has hcld that it is oniy {creditors A "ii names appzzar in £112: books cf {he Cumpany, who shmsld be ckznsidcrcd as craditom and creditors wheat: names do not apgear in iht? books of that cumpany shuuid not be considered as izztdiiurs 6%..

unless they can prizna facit: shuw in the saiisfaclien of the Court that {he}; an: creditors.

5)

3)

03.4 211931 11111111 13. 04.1931 --- 1. S}zi::ar1zrf1_:

Imreslments (fr: {he High Cour: 2'---.:I4n '4 mvpuunded by sham: huldt':Is.__.and :~. whu also joined the pciition W55 penniiled ta do so.

Palmers Cossrpmzy 1142: "if any class' €é>1;_is{s,_ have: my possible intercst in the wmpanyﬁ c:'.g..,_ 11»h1;1~e'11s'h11rc-huiders of a company have no 1-':1§%:ii.i!;:nzr;;x1 Vali the assets are exiluusiibic by creditors, vEhe.v ('3;:_~§.:*:¥;'r1_x::':_j~;,' samstiun 3 suhcmc even if such a ciass 1::bjccls." 'V k) 1'«1'..R;--V 1§Jo}1££pa£ra vs. State of Qr'z's.:-:12, AIR 1994 Or'z's.s'u 301 : A AA who fails [9 have his name esniercd in the register of ' éiamnbers wuzzid have no i0cus--z~;Lancii Eu ﬁle a petiiiam under Stsciiun 39}.

1) H2) ' aaixsg ---_ éﬂé Semi Chmnicals Limiiea' vs. Sent Chenzfmls Pvt Llcl., {1 999) 2 Bc;ml.R 399 : Scciiun 14 read aiong with Scc{ig).13_ Act provides that a member in ntiaiiun lo a.g§JjAmpaﬁy (}Ut.7ii'E§Q§ include 21 bcarcr 0? a share warrant V pursuance to Section 114, ii h'ccome$&*..ridcn{' register of members is 21 cc3z§}ii§i vi§;1r1u p:re~:'o.:'e*c§._é§n'i': iﬂﬁljnﬂtﬂbﬂfship even if there: be a a;§i¢;§u'ing% shares and the letter ufailutxneni istsucgif -- :1"

-33;. .B.;«.:ilar;v Spi1r:mz';*zg.4nd Weaving Co. Lid Aawgg, ;93a.~ "3.Vh;§rx 3 zsazltﬁ' $=::c:;;:_;7¢:d mudiiur opposes a scheme, ii cannui bc Corpurafien of India Ltd vs. Harywza Slate A Iric!;_b%i7'iaZ I}e'vé:Iopmer1£ Cvrpuraiicm Lid A» 74 Currgparzy V' " €3aa'zg' 800: A bare: reading of sub~St:4.:ii<,m (2) 0f Sé-:<;iia.3n 536 «sf {ha Ant shmxfs that in iim case: :3? winding-up uf 31::

Cumpany, any Lrarssfer {if shams in {he company or aiieraliun 2 5%?

in the stains of its members made aﬂcr the uummcncemeni of the winding up, shail ht: void.

GI: [he other hand, Sixri Srimandar Kumar, par£;§»4ii§é}§§§r;§un, sacks in subslaniiaic {he objections, rtzjuindcﬁ; arguments ﬁled by him 2:1 va.rit.m:-3 pg>i:iis'uf iii11c,_..\féi§+:ﬁ§:n.iL§.§: Vésnd' j vucifcroushr cunicnds as fofluws:

Ii is contended ihai as a dgtijogiiuy, L1*é£ii£¢§_if,'"hi$f%rig,hl lo ﬁfe {3bj€cLi$§:}:§V'i3,_ﬁhf:= p4§i;;.;ii!)!i'&:§;iI'!.IIt}§A%"§:%§ﬁt2(§ in quesiiun. Oi: ijléés oliitsr thai pciiiiumtr nus. E and 2 am a:redilt§t':.=V_V_ nV<§r iésztzmbcrs and are inciigibic in file the .pe§.i£ic.:;. v.Fe:§$iiuncr nos. 3 and 4 are facing criminal am} IniSft:asanii¢:._p1:i¢ecding3 in reiaiion in the affairs uf ﬁn: cumpany in i§q:.,:iJiiA:,1lih{1"11 and are hence <::~:{:.3;3p<:d from ﬁiing {hp petiliun, A -Léésfiﬁeialiy as the above cimumsiancs of pending proceedings Having been suppmsscd by limniz in ihcir aiﬁéaxtiix, The ﬁrsi peiiiiuntsr has not prspobzsd to infuse any ﬁnanc-$3 iilidiﬂ" that Sﬁhﬁmﬁ axes [in r iavin * V '21; in R:.=..SS Iakh dc: siictd be:§urv.: £his P 3:: , 3:: P"

$5 Cmzrl by his father ai an earlier point of time in an abetted scheme- The scwnd pcliiiuner has deposited uniy a sumpf Rs.6 more to {aim (war {he asscis vi' a cumpany wiih a nlizziziczini-:ii;1--.£\ii§*<JrlIx of I-13.25 crow.

Ii is urged that the Oﬁieial tiifftiéiiirefiyi T. participated in {he prucecdings._T}1c iﬁi:1iir2$iirccei';;¢d' »b5.-i .,ﬁ2i\!g not bcen adjudicated. He: has aiiS'q:i1'ai}cd ii} iuiiivajhﬁiiailcniioxi ml' the Cour: of the penziiiig against the V dclinq{ir;I;E'--di1'ai:iisf§$-gitl-:3' employees. ; ' ingpiici mi' iiabjcc-lions the gatlilioncrs had failed la 'Lia jiijsiazicmanl dciaiiing the Cumpanjfs iaicsi Enamziai mailers. Ii is urged {hai the (13:31: 4.3? :1 pwmimn uf {uiiicauh shaft: of Rs.ICIf-- --- under {he schczme: when 98% bf are mazmzd by the pciiiiuncrs is a cast: in paint £0 ii7.§1diii:a{c Ehe; emergence: mi' the Ccmpany as a mixécni one. The iﬁnanciai rcpurl made axraiiabie: its 131' Elm year 1%} and is anliqualad. This is with gt: motive uf denying inttarttsi at the $% misreprtsscnitsd (ht: tram pusiliun of the: Czgmpany _..

acccplancc of iht: Scheme wvuld 1ea;<3Mtz;_31§ﬂ:n the: conduci uf the delinquent dircc:ié:.;rs,1'_'_ii'xc; is give its sanction [0 [ha " 2 . Aj V ' (cl) Pioneer 1&5': D'r.-Slzzirzkar Vishrm .a4'..mz;m , 1967 Cam xvaz; hcid that the decision uf sharchtaldtzrs to a Scheme uf 163:} in the inference Lhai ii vva:-: rcpresmnted in the siaiuiuggx.¥%;¢:t:§ing; j€§3f,§:"{.%;ﬁ§s;iiit:r'4£i4;Jns {hi-ii are to be taken inio ace-usA,:;1--.§ by .-g =.C-¢§Jui'i Eér:fun: as Schcmc is sanctioned are me.) "<:.2;}ia::ssE§{?§s cnnuznsraicd.

, 'J'. Parekh mi. E..,s'.s*.s:*n Cunzpvzzterx Lfmitgzl I29 % A L Cmégﬁmgs 'f;§'1(Gu;} 'gfizen there is an :::[£cmpl Eu icnninzzie pending misﬁsasancc E pmmcedings against iht: pmmulcrs ur dirmzium «-- by rccuurse:

1:3 prupuunding at Seshcmc ~ {hrs same: :.)ug}2£ rmi to be sancii-;>neLi.

8 (if éI1quiry'._i:ziu "

"W W 55/{P Aiagiri Rafa and Compzmy vs. N. Cam Cases 738' wherein it was found ihat l}x:§A,pcr:~:u:zs w§t_o'~!§1£s ;§r<$puE}:;éders -- sought la appuinl as Dircclurﬁﬂrwgm n<.é'i- :~;he,:.r(.:--}z.g.3I£§r.f:r':::'z--2s:i::i ii véazs also nai disclosed as inﬂow ih<+:...ﬁ:r2a.z:'i:e;;-; 1v¢:f¢§'{::*.r'c:is¢:d » the Scheme: uf A1mngcmcm£4coL:id m_Ji;* ﬁfe: :s_a1i<;i'£igii:2d. (jg) A .714' wzzgfucﬁuring Compczrzy .7 81' 9 This tiszgiisi-;:n_» g;'iia:§3"'£L3'<:n3phasizc ﬁx:-xi 3 Scheme is liable « in be rczjtzciasgi whtzfk the a'b;3 igc circumstances as in the: prcsuni case _ on héjgzd am pzt:se12w1..... ..... .. s V. Izﬁxararzce Corgmmlitm zzf India vs. Es:;'0r£_s' Linziieci

4.1I'z'1"€. ;3:§~?:5'.$6 $':.f;¢"7?';_,_,!V;';'7{? To~~3ﬁ;::pur[ {he cunicnﬁun that can {he imnsfcar vf shares the bccumcs ﬁn: owner of the beneﬁcial interest though the K §e:;_g3i iiiics azuniinucs wiih ihe £rans.§.:ror. The rclaiiunship of Imsles VV and "ccsiui qua irusé' is csiablishcd amd {he imnsf§::rur £3 bound in 8 '$1 asurnply wiih gxﬁ reasunable directions (ha: {ha "gisLrs_. A Eransferce whu has lhc right to _g::.£.pn LE3 fgﬁgiécicr; vwﬁxsie; pcrrnissiun is mquircsd from any sE;if.A;1li:!A:'fy' .ihLc Cumpzmy £0 register ﬂu: Csqfnpﬁigxy rclﬂﬁe except fur a bum: Ede tcagon. « ' (17) B..4..ti~feﬂ£3<*PI{:*z: 1:96 €:'om;2.C'r,:.s'e.s' 526 5' « -- 1. . ....

::v[.'..'.?}iE::ilt:I'i'2i§ §ac£s", in {arms of Scciiorigi 'Exp-Ianaiory Siaicmczni annexed iv {he IlUli£€«._4(§i:{'v.Hll.;§t3§.iIi}._§Q uughi nui £9 suppress ur withhold » , A inIi):'1i'3aii§5n :__-- tv§1iégi1~w:;iiId hzzxzt; 2:. bearing on the ouicumc: of {he (ie:a:iSia:;1"uf'£}1f3' geiacral body. Fﬁfésfake Tyre and Rubber C0. vs. Sjmifzelics am!' slémiéeci 41 C'on1p.Ca.s:es 37:7' lays down ﬂied £326 _ ~'_z'té:4£:Ert§ii:sni azmicr Section 373(2) of ihr; Aazi is mandaiory and 119% ~ 'di1*e:;iu2"y - nun-cumpiiancc zsmuid render axzjx consequent action 2 aszliiiy.

3 ':-:4.

, appﬁuani is {he owner of the beneﬁcial interest even than 1 his name is not mﬂcclccfiii R2: vis£t§r"c§f 7 V of the Company.

The Scniur Counsgl '$9.; pl.z§ce--.r;:li;*.i2§3cc: on the judgments of the Suprcmﬁ-. 'C;;uf{ Iﬁsirrwwe Cmporaiiun of India vs. Emgr:;- %%,4;r2e% kVi%935% SC 1370 wed in R¢.NKMahc:p43rz;i<i:s;'?V'Si;e1gif--:fOpf§;;;séé:;A 51995); Camp.LI .266. He would a share is also emiiticd Eu £311: a st:He;n'r:«.c:x}c:1 not been registered as a member, bui hg:-1vuuI§'i"".<_=[§vli'b£: inicrestcd and may appIy under "..'3;3t:g:i'i£:§.1 39*}. [he 'and places rciiancc am the decisions in ;?§.,W§¢r§+¢;z%Qg;c3e Congpwzy vs. A.K.M'ishra, (I994)! Cump.lJ % 219 w-.321 avA:z:"".A§'.IxC€}u;2£Iu2 vs. K.P..}'::zz'n, .413 19:79 SC 2'34. This 'A at the uulscl in View of {he boas-siandi of ﬂu:

-- aispiicénls being qmzstiuncd by the: petitioners. Ht: would submit [1131 from a uompamiiw sialcmcni [hat has been furnished £0 highiighi the: superior beneﬁt that the members fa

-ya rcspundnnls and applicants herein. The schcmc:_'=:5V.I:

cannui be passed only on the claim QIf.zsc;:iurii§?.''' " " .

It is furihrsr puinlezd ugxi already held cannot be 1 the Securcd Cwditur, 14% interest with cﬂizct from a so-cailcad settlement V a case in paint. The case is simiIa}*_w "iii§.; :1;is::§:12fct$.._c;;:';ii£L:rs. He \»Vlv:}£!L§'1'{.:v,.['tV!i5£"§._1'1;t51T_VfsSt3l.:;iVI1i[ that [here is gums suppmssion of _ l}xs:iv:;,'5sug;'}i as Qhe ihisfszvzssancc prucecdings against pesiikiuners no.3 that they have def}-guiled in payment of leans company in iiquidatiun in the yum' 1996. Thu _ Jgamc subject matter of Cumpany Applicaiion 349.640.5200}, :1 {Mai ouisianding of R~.-35,431 Iakh is shown. Apari the ieansg the pvtiiiuntsr Shri Prabhu, win; was the Managing ~ }3ircci0r of a Company uaﬂcd Mfs Canara Leasing Limiiﬁd has 8 1:.) ensure: Ihai the bcmsﬁl prccuiatcs to the dcpusiiurs and others and the rcvi:-gad scheme is annexed to the additiunai 21¥33d:;1_.$.fii dated 19.12.2003. The: Counsel would suck in Licmonst?-;=§te:: i§~3::éLiA'{l1c prupusais pub-furiii by the petitioners and the 2it§¥3'£If':}Ii$.;g:t;§VS"

have the requisite basis and ii xwuigi' ;.!::;n',s_;t:n;1z§"£§_2_ accéépi {he i schezne: without a c-iuscr examination {if list; xragu;;"_Vp1?{3z:iises :nacVi«'.:.L And the Counsc} would submit .~.~:::Ir:V'c'*:z<tV_1:';:"'e,.~rv§-s ihéaiapﬂpliuant in CA 89932008 be consideifﬁéii. wkéiie x».riih AiI?1VA:;:; meetings to axmid a§1é!_ay face {sf {he circumstance that a less bcne{iciais£;ir;crri:;AVhé1:3 E-r: £§1: apprawcd by a majority of the members of the-.qQm'panvy.

V " S§;ri£i'}i;ar, Cuunstsi azgypearing for an Qbjecior wuuid s£1'bg%ii£ vaiuabit: immuvcaiéies property btziunging to the

-»Cump$ny«:'al Chunzh :slrccl, Bangaierc and at Mysurn are a-*a3ut:{i, " k§€£i€.!T_.';iing {L} tbs: guédeiine waive cf the Slate Guvcrnmezzi, at not % ...lL;s3 R:::.25 cram. "fht: list uf debts cf the Cvmpany ix 3:333 Eizan haif uf {he wine :3? the properties. The: 1\z§ysurt: pmpcrii-:::: ham not 3 §9'>&,,_ 3"? .

even been vaiucd. Ht: wuuld furihcr submii than Eigzins and adxaanc.-t.~,-s due: to the cumpany am not irruc-uverab}_<'j".""' ~ mine are taken iniu account, the asscziss cf Cum--pa31§:j*!4A%0'i§ld- Aﬁajither increase. The pmposcd vaiuaiion uf L_;h2:{es« 133} . of the zzczhcmcs ai Rs.30:'- or is :i(:i i1I:iic££.£ivé:_'ufihi: auiuai' assets of the company. the 2,73,!-1auc,;.:"e2i"' ::ts':~:i:'£s.;_;fVAi..i§1e Company are IE1: above the dues of its no jusliﬁcalitm to direct the sharchéﬁdtrs '_scVheﬁ;e'vnutwi{hs£anding that ihsz schcmc: has by a majority.

The; giaxiézg :;'ir§-VﬁmS£ance of misfcasancc pmemczdizzgs agaiﬁﬁi ii}: uf the scheme which has been approved '\§ii::1id .. giiscniiilc ihé grnmpuundcrs in take: Ehc so-heme fiur';ie'é2Id-« 'gigliiﬁcanﬂy, the scheme does nut indicaii: as in how that uf the Company couid be carried am. And therefore, ih§ {3uunsei would submit that prudence wouid require: the __;::§ropt:riies of {he Cumpany basing brought 19 Saks and {he shamhuidtsrs and uihc-I members of the company be givcm (hi:

bcneﬁi of the surplus fgds, afie-zr discharging all (.§1.!£.'2$. <21' the 35 company, instead of offering the vaiuabit: asseis of {he company an a piatitzr in the pmpuund-srs of {he dubious schema and lhcrcﬁxrc, wuuid submii that the pciiiiun as wcli as f.'h_¢>: other appiicatiuns be dismissztsd.

In 3.11:: abuve background ~» 1116 xrariuus 1:: herein above are cunsidurcd along 'i$.?ii§'1' {hp 'ma-in ilaxéing i regard iv iht: fact ihai ihc pciiiipn being by "»;.yv1*§i'-;.-:2:

would require ihat Cut: same be ebzﬁziéered 5n.1ﬁt::§-is wail. CA 399,/<32 &cAkk§§§;2:x:3%k%%%% J _; tam a;:u1;:fiuz;:;i1V§inv:CA 39912003 are before this Couri on the that iixcy have jointly purchased 1% shares of shareholders and have: paid [vii cunsidcraiiun V a §.I'dI::$fGf deed dated 17.i0.'2008. I1 is their {hat they have submitted ihtzir shares iu the O$t:ial A:IV§:i£;»;'::éc§,a1c:r 14.2 t:ﬁ\t?{.§-i [ha lmnsilzr 131' shares in their rzmncs. And ihus seek icave of ihis Cmzti to pres;-;::nl 2:: Scheme uf Arrangemeni. @-

pg.

Ké Having regard tar the: above uircumsianctz {hat the applicanis claim to have gmrchazxcd shams of the Company of winding-up was passed on 29.10.1996 in rcsp<;s;i.'§:§5:'f: The transaction is void in terms of S:m::liI.}.!..14[:. applicants ihcrcfure are no}. csmzgg-c:ic:nV{ ";3r::st;n1 sufssmc L§f arrangement for ihc revival of ihcf'{Io23;pa1}y¥§1owsueizcr aiixmzizivt: {he gamma is nzadc uni {hr i,i*1¢:'4{:ai:1s;ii1:71*aiiun of {his Court- cspeciaiiy ai £hi§;'sL;_1gc :3? " peiiiiun. Hmwc: wilhotff . <;31h§v§'r"..i.c';v_13r:_i¢:'..:r1V1V§§.3v»n:~; urged - the applicants are barred zit application in CA 89952808 is rejcggicd .

%gppricaa;u§« in CA gooxznos is ﬁled by um three 899/32008, supparied by an aﬂidavil «J the first fgsiale that thc three appiicants are the joint huidcrs uf .. 4; having purehasad lhc same from one Sumangalarmna, Sharada and Mahcsh. While the afﬁdvait cimss not dizscivsé the dam: of such acquisition. In application 899f20{}3, it is indicated 2 V3?' that these shares were: purchased in that year 2008. Since in the icttcr dated 5.11.2008, addressed to the Otﬁcial Liquidator it is again vaguciy indie-aicd that the shmvs have been '.'it2¢.;t:ntIy" purchased and the share transfer form is dated the tmnsac-tiun rciating to the trmsfcr vi' 536 (2) of the Act and same is rt:nd€;1jcLt:t'£)i.(3t few;

of this Court. Accordingly, th¢c't£1p_plicaVtih:ItV'izs CA 36:4/was Gf in CA 864./2903 the first applicant is have? 230 share-s uf the Company from the an aﬂidavit is produced before this Court to dtattﬁddiilatd sold shares beta} by her and wctzivcd the entire gait: uéntédcraﬁon on 16092008 and that the sate is registered A the Sub-Registrar. This is a void trdmactiun and renders the ﬁrst and smmnd applicant incumptztent to present the appticatiun. Insofar as the: third applicant is tzurlazcrned-:-zhtc is an unsexzurcd crtaditur with a dcposit of Rs.3-4,080!--- who has mtsmly Z-» $9 expressed hm' willingness to support {has considered to be a sponsorcr is i;i"'an.gg5. ii'it."-'1}'i_iti.tvii'i-V_Ili!i\§i'_ dcrnonsiraicd that she would be iii'-a 2 application individually. Th¢ia:ssii§'s~.,1;:ugimgzgsigiij-V_ﬁ}%i'é"';x_+si we sanction of the sale of sbsits, uthcrwisc.

Them: is no warrant fuii    the case: of the
applicants neg   uf the schcm-:2

proputmdedi

Rglisxicc spplicants on the fuiluwing is not lcnabic:

ii1x;Acas:i§"uii--------£;IC v.E.sc:orts Ltd, AIR 1986 SC I370, the:

lhc E6098 and silica: {if provisions of the Fcrtgign Regulsiion Act prescribing, prior permission of Bank uf India to Lrausfcr U1' crcair: any interest in a . ii in favour ufa pcrsun rcssidcnt an-{side Imiia and held thus: "On an uxststaﬁ View sf [ha several statutory provisions and judicial} pmc-cdcnis to which we 3 §9 have rcfcncd we ﬁnd that a sharchuider hag unduubicd interest in a Company, an which is rczprcsenlcd by his sharc~hulding_.: ii is movable properly, with E!-iiviiliiiiii6ii2iiiiu'Lt'.iiiJ"1_ilt$IS properly. Tbs rights of a elect Damon; and ;b.asiiii%1u g.:;;c;pgu: management lhmugh iilu._:g{Qlg;i? on rusoluiiuns at i (iii) it:

enjoy the profits shape of diVid¢{!d$'i;i (§\') aiiiiiy fur relief in apply to the Court

7.__fozf rniiiefiin» uiimismanagcrncnt; (vi) in 2-ippliy ii}: fer winding up of ihc . A, CuIIif::aiiy;V(ivvii)"£0i§iha1*¢ in the surphrs an winding siiartrisi irzinsfcmbit: but whiic a transfer

-V eﬂisclixrc between iransfcrur and from the dalt: of tmnsfer, ﬁn: iransftar is v--.ii"iii}fii template and the iwnsfuren: becumes a i -ﬁialehuidcr in this true and {id} sense of {he lama, with all the righis of a sharctholder, only when the iransfczr is wgialcred in that company's register. A iransfcr cffcciive bclwstzn £113 lrzmsferor and [hit lransfartzc is not £':ffl.'51:Ei\'t: as againsi the cumpany and persons without notice of the iransfcr uniii the % Q8 transfer is rcgisicrcd in the cumpany's_.r%;giStei';---- .

Indeed uniii [ha lmnsfcr is registered uf the Cumpany the i_ in 111:: register aionc is cniiiI_¢:ic§.V_1u rc(;:§iAiie ihcg i dividtmds, m3lwi1l1sLaiid_iiig_ Ehai" he ziiiiiééidyiii paricd with his in1crcs£V_iiiii: .HQiyt.ivcr, on (he: 'irdnsfsr becomes {he owner of iht; i'i1~iii:ri§Sj§..i--ihough the icgai ;;:ii¢.iki¢gn:;nu¢siiiwiiiitiaiisremr. The V;g3id"'i..:'ct,::$iui qua trust' is is bound to comply with 1 miisuiiablc dircciions that the ir;2;1Sfcre:ivmay'gii_i?a, Hi: also becomes a trustee of . ulhc: iciﬁtriiiends eis cf the righi to \>'{.)k3. The of 'hwaisfmec 'to get an the nzgisier' mus! ..b;epextifci§cd wiih due diligence and the principics which makes the irdnsfcmr a £T__iil!Ii1.':'.1?i'i!\1!.'-i.i'§.i'I:: lruslczc dutczs nui cxitmd in a case:

i iyficm a imnsferce Lakcs no active: iniercsi 'to gei i on L516 register'. 'When: the transfer is reguiaicd by $3 siaiaze, as in ihc casenf a iransfcr it; a nun- residcnl which is raguiaied by the Ftmiign Exchange Rcguiaiiun Aci, the permisesion, if any, prescribed by the zsﬁaiutsimusi be ubiaincd. In the 2 $1 absence of the pcmtission, the transfer wili na;':._1"'» mum the transfers: with the right 'is; ge:i_.¢..m "{§i: j;"

rtsgisier' unicss and until the rcqtzisiit: is obtained. A transferee wh_.<.:..ha:; 61:2' '.13: gtsi cm [he rcgisicr, When: In: pe:r'mi3:;i0x1--3is :1.-:quit't::i' if when: gmnnissiun has oifiaixitssi, mag? 3 company it.) rtzgisier lht:'£1*:~1Tfisfcr an£3~ih 6 who is so asked' 39 rcgisier _i}}_:t: ir;;nsI'::r 'L)'i' may nut refuse 'zfﬁgisier xgxctzpl for a bong .{'1(ic:'--n:aso:;;" for any uoiiaiefai §:a{rx::.;st:. consideration »j:§§7_T:ii;c cﬁzmpany and the genera! iiiégzfcsl L33 011 {he other hand, . , whcﬁj, .fu1*in'siai1cc; the rcquisiic: pcnnissiun under obiaincd, it is open lo the and, indeed, it is bound to refuse Lu transfer of sharcs of an Indian Ctémgiany in favour of a mm-resident. Bu: once; " vgzoinnissiun is obtained, whether bcfurz: 431' after {he purchase: of the shares? the company cannot, thercaﬂcr, rttfusc: ID regisicr {he iransﬁer of shares"

Nut is it open to the Company or any ether aulhoriiy or indiviciuai lo inks: upon iiscif or himself ihtzrcaﬁer, ihc task of deciding whether % 93 the pcrmissiun was rightly granted by the Rcscrw:

' Bank uf India. The pmvisiun:-: of the Fumigfi"--.T Exchange Rcguialiun Act are an sirucinrVtgi_"' woven as to make it cicar that it is far Bank cf India alone to cgm.si(_if:r f;i\ilié:"ls':;¥.-éiu'. Eht:

rcquircmcnts of the proviéziiuns'--A6}? Exchange Rcguiaiion A;;_i an£i* variggvikg directions and urdfsrs have bccn I'ulfilvI«2d._ and&.saii1-;:.!::i_:1efj,~r;.rrnia.?A's£ii3i2A sizijxuld be granted or 11'{>it;a T -- :31' mm-

complianw: V with that ;2:ruvi.~;'iQ_x1$'«: Q_fv Act and ﬂy; 1'-,_rul_»::a;, L§tii::r:s§V'axgtiﬁfixwzcijtjns issued under the Act 3:'; 4incn'iiuIie£.j"in"'Sf3c§.48, 50, 56 and 63 0f the .. ., , , be read to mc~c:£ the: bar underr Scaziion 536(2) ui' " (;:u:iip:i;;ies,;5;¢t inxufar as iht: applicants an: eurzctsmcd. %-mm ggpzicanen CA1069/2008 ﬂied wii}: 3 prayar ihat the x V' » Viiquidatur be dirtacled to register ihc 2nd appiie;-ant (who ﬁ$; tbs; first appficant in CA 864:'2008) as mcmhcr in place ofthc 1" applicant what is the second applicant in CA 36452008) pursuant lu iha above: said transfer of shzmm --~» 5:} {hat he: may become 3 cligiblc to ﬂit: a pctiiiun for leave uf the Court fur cunﬁnnativn of {he Suhcmc. This appiication cannot be granted as the transfer suughi to be eiifec-[tad was void for want. uf thine Cuurl and cannot be cured by this ihg:

application is rcsjccicd-

CA 3113009 The applicant claims in shares which are punzhastsd "~2r7¢5;gii$i¢.:_red riitsiiibczrs, in the year éiwiihj the Company. IE is prayed that an-. iC?ﬁ'icia.i_§_.i£;;~:';icia:i£rr be aimed Em acknowledge the i ii . krawéfcxj'-itgiishares iii"i1isiﬁ«.1\ruur and reﬂeui the same in lht: Rcgisitsr cnabic him in suppuri, the scheme: fer rcvivai piussnisd suit, win: is Fnc first appliczmi in CA 86»4;'O8. 'E7'--}ic irantazaciimz under which {hm agtpliuani claims to haw: i".;iiirc5hasud ihc shares; (if line: Camp:-my are mid in véciv cxf Scciiun i ii 536{2} and htsncc the: prayer caitzmt be granted and the appﬁcaiiun is rejecicd, Z:

{V}

(vi) 4?'?

inicmst at 18% p.:::. from (in: data: of i"v:._>_Tf;"Aii the date of payment.

in dttclans Ehai {he Rcspundcn£;'?$§oj:'I' atféi "

ll juinliy and sctrer*411y pe§%~'.iQ Oﬁiciai sum if R:-;.55l.39 lakhs '{'!'Vl'.'I'..~2{"(3:-§(1III}IIIiﬁﬁd in acucpiing dcpusii in tsxccss 9f the India.

£0 NQI tu pay to the Glﬁcial detﬁusil accepted as a gas}; at Ivi}4;;i)r§:V.i£:"-.x{'iis32iiiux1 of Income Tax Aci together ; 'wiih iﬁicfgst' Ext } 3'.s.3.;8% pa. fmm the dais of winding up (w: , ._£_.iﬂ the dais oflpaymcni.

Rtsspundcni No.1 {:3 pay to 111:: Qﬂiciai Liégﬁiiiﬁior 2! sum of Rs.53,I8,l68f- as an amount advanctxf " Bangaiere Cunslrucﬁon and inarcslmcni Company

-- Limited iugeihcr wiih inlcrsz.-zl at 13% pa. fmm iht: dais of winding up urdtzr lifi the daic: vi' payment. % W6?

Rs.5,97,884.50 in rcspcsci (if loan granted Insulators Private Limited logeilicar _ from I14/96 {ill the date of A' % V (xvi) lo declare that the Liquidator 3 sum "m~.s1"ii:ci of Ivan rwcivcxi by him at 18% pa ﬁom 1/4196 til! u (xvii) to pay to the Oﬂiciai ii:R.§i%si;i:'i,635.20 in respect or loan with initzresl at 18% 13.3 ﬁum V " ; 'ix?!/Qéiiiiiii paymunl.

lhgiiiiiiiﬂxc Rcspundtml No.1 and 4 joiniiy and lo the Oiiiciai Liquidator a sum of Rgi43;253410.35 in respaui of loan granted to «°--.'._Si-ii.P.S.G.Krishna logcihcr with interest at 21% p.a ﬁvm i ii 1/4X96 till the dais ofpaymcni.

i{:-cix) to dcsclarc: that Lin: Rcspondtmi No.1 and 4 juinliy and severally pay to the Ciﬂiciai Liquidator :2: sum of 3 €353 inlentsl at 18% p.21. Bum the data uf winding up order {R4 the dale of payment.

(xxxrii) to declare that the Responds!!! No.1 and or severally pay to Olfxcial Liquidgiéyf' ' Rs.i0,20,Il4/- being the maﬁa: .s._..; % as current aszmis £ugclhc:*wi__l.h at dale uf winding upurdm dag; gr (x.xviii)lu declare that } _4 are jointly and .01' 113.228 lakhs with interest at _ .lV8% f3::t,_:V Ruin of winding up till the date uf j uf bmach of trust in respﬁcl of liability AA ; " application is ﬁled by [he Oﬂiciai Liquidator am the inf a report of a Chartered Accountant who was directed by T " Court by an order dated 1.3 2800 to examine the conduct of % the Ex-Dircciurs and uﬂiccrs of the Company. ﬁre; rcpori uf the Chartered Accountant». ._\.youiai.V"i 1i1i3:i{;a:1 £é" . ﬁndings are in the naiurt: of prima 13¢-iVc by the Official Liquidator has the report as acts uf misuftggtsanue whik:

even mfsrring to the the wares uf its infunnalion. is n:z 3 i:Iiat...1}::ié'appliuaiion is on the basis of ﬁf mind by the Official 1 TlAi£:V.._$:£agc'(:-Ag' in the said appiicaliun is that aii 1"s¢spoI1dezr;V_£ SV'arcV:y::i to be served even after nine years. Nuw u;i¢,<.=.f ihe: Dircactors who is a rcspondtmi therein and a proceedings, is dead, this is not even takcn Emit:

mag 111:3 %Q:1i§sa: Liquidator .

pruwodings under this appiicafion is uiicxi by ail the ﬁf§)jt:cior:s and other appiicanis as disenliiiing the peiiiiuncrs it} pmpound the scheme.

% H95 Having regard iv the abject under Scciiun 543 uf Act, which is to assess damages against delinquent tazid 'E1; ensure that on account of misappiicatiun, reiainer;"znis€fc:a$:ani::z:.Tor' breach of trust [hem was a loss to i.

such dciinquuni director to repay. pr méipfe the meﬁﬁamy {if ;':}}r(ipz°.r't'y by way uf compensation by virlué ihg: And from as plain reading of the A VLﬂhii%;1.V'.fQm3'$..ih¢ basis of the prescni application, it nzannoi :Em"~/§i¥§'iV'-Sigai " ought to be dismssd in 1i}ii;_-vVf;;;;:{.-. Qf. g1.h»éVV_app§it:alion. The: Oﬁicial Liquidator has nut. éixsggan an this want. It is 01133; ihird pa:Lif.§S who hisarggfzsiséd the contention {Ital in v§c:w af these .A ﬁ*1e:_pc£iiio::ers canrml be pcnnitied lo suck it} nevivc " fg; BvIis-feasancc pruccodings are brutsght for the cumpany with the object of swelling iis assets and A f_" much in ﬁnd a liability or breach uf {rust of its Directurs or éjgthczr mnpluyccs etc. The irrcgalariiics disw-vested at an audii are: 9111}! preliminary ﬁndings and would nui be final ﬁndings as is 2 '!'C:Z9 apparent from the very team' cf the report Accountant in the present case.

In the abuw: backgivund, passud on the pctitiun, the p1t:scn.t_t:£i1:;f:iia:z;Eio11..dﬁxﬁtzqiitsurvive. This :I:}!'0t:V.'SE::££;:"f}'It:1It of objcctiuns(by as dcpusitur Ed jﬁctiiiun in Co.P.i02/2006, stands thcpctition.

CA 77_:,'_;2006"~' . A ' £iVf:{3_§icaiit3t:w'i&as directed to be pusttsd ﬁongwith the order, dated 6.9.2006. It is seam ﬁvm the prdywr applicaiitm that it is fifed by a dcposiior who has " " 'T 51 wrty in person, seeking cnhancmncnt of the interest fiaﬁkabié an the deposits at 14% pa. In the light of tin: pestitiunexrs Vt " hdfttﬁiﬁ having vuhmtarify uffmcd enhanced initsrrsst on the amount A' cf deposit as indie-atzsttl in tht: uperativt: portion of this order, the % E3?"

applicaiiem duees nu! survive for considcraiiem and accordingly stands disposed of.

CA 925/2006 This appiicaiimn is ﬁled seeking an:~;;gwbg%g¢c;i¢nx&%A;aT;he % Company Pciition in CO.P.l6i?_.{2QC)6. having been heard, the applica1i9.;{'3--ta1;ds di$}50:xé4i..c;f alungwilh the main pciﬂiun.

r*nisc;;;:;: appggiama' Acctmntant who had submitiééi "a. by this Cuurt. The Official Liquﬁdalur amuunls ii} the dtaposilers, 21 .' V. - M?'$"C'-orpumraﬁun Bank, the cmpluyceas and the raiion uni ufamuunts in d sit as Inﬂows:

' '{$0v'?-*6 of the mincipal amount in depositors

b) 60% 9f the amount due is Corguratitm Barﬂc (Rs.1,56,i7,59'2 cu-1¢.)fR:s.2,62,39,665w'-)

c) 36% to Empluyecs 'E

d) 20% to Bangalore City Corporziion.

The appiicaliun of the: pe£iiio§"xei*.s'~undé 1* j Act, for rccnnstruciion of Urge Company Petition 43.31992 Lht: appiicants had . of the Sharcheidcrs, and Unsecured Crcdiiors, Chairman appointed by this ﬁxacﬁngs held in respect of each ci§%ss.__V indicaies the fuiiuwing:

A majorﬁ'iAy~ Approved the sc-hams:

'«f§1"1.§1I't5Vl.'Vl(V}--i.:!!i:§'5v:f.":"s" IT!&:!b\ft: by a majuriiy vote consisiing of 'A A * -. shares (9i.27%} appmvcd the scheme without v fﬁtgiiﬁcaﬁon' " 'ﬁxéafuyccs have unanimuusly appruvcd the scheme wiihuui modificaiicm.

C) Tht; Lmiy Secured Cmdiior, Curporaiiun Bank, has appruved the: schcime cuncﬁtionaily as per letter dated 07.03.2006 and a memo dated 27.11.1986 the course of these pmcccdings.

d) The Unsvzcured 'Bakes; a znajority, nmncly, claim or Rs.3,1%9,25,:Qé £;%{L91439%)'zmgamippruvcd me scheme: with ﬁnal payment shall itiifercsl Vv'%'f'v'?r3V§.'V'}§1#¢:rn [hrs dais of the payment shall be a {mew becn incoqxsraltxi in an «A1.mcxurc:- H in the pciitiun.

_ .Huwté§t'.1:,v Ctadilurs having, 21 claim uf

4. (8.8&.'V7.v""*'g'»9':"$")Aﬁaw.*c: oppused the: schtztmc. V iV.'*%V.T'§:1.:i'icp<:sil made by the peiiiiomtrs in a sum of R313 T % cxm anainaddm a sum of 113.55 ma: deposited earlier by {he .. _':ﬁ:i,§2§I' ufpeiiliuncr no.1. The tenants in Ucuupaliun of the premises

-' Company have been dcpo-siting rents. It is siaicd {int {he .'VBﬁlancc amount required wmzid be deposited by the second petitioner is: discharge ali iiabililics uf the Company. It is 8 MU pmpcascd that {kc entire sharchulding of the be iransfccrreti as per the amezndcd st:-heme invcsirnent made by the petitioner nu..i~»&2«. H ' V The (bird petitioner having ' and son have, by aﬂidavils "Vigal théy» would tmnsfer the l,3fi,3Q0 by {bird petitioner in favour of 61% the rate of Rs.30f-- per share, in ft3ii}ié}€;:f£1n«:c;3<3I' made by the iatc third ;{1f"L;%s£Cuur1. Huwcvur, twsn the "tn have died as on 07.12.2008 leaving .1....,% :-3313' _é,3i7 "!,»hé'*'ﬂ1ird gcliiionﬁr as the sole legal V. - 2fcpé-'<;:§ci1'Eai1"v:; of peiiiioner. :9e;;%;;¢a;¢y %Nu.2 has, by an afﬁdavi-£ am: 95.03.2009, dam'; an bc}m3rurh;ms¢1rand the othtzr petitioners, [he sahexna further as fuiiows:

' ii) That the Smzurcd Creditor has in ticpoaii :2 tom} sum of R:s.3.65 crew and that there is nu objection if the :.-xmmmi is appmpriated @ [he said Seemed Crcdiiur, H27 Curpuratiun Bank, in full and ﬁnal St:£l1€ffi_é:I¥E'.. :'!V5:kaI§(,1 to saith: any further claim on negoiiaiiozi:.:"xvi&1iiﬂ 'Iﬁéjajgés fmm the date ofsanclion uf i}ic:':-s::};e~:¥;r<1¢:.;v'«" n

b) Insufar as the amount as on date of before windiné§_¥'i§9 J the amouni rt:iumc'xi__as in 3 sum of 'V The princi-pa! " i§§ 9,8'84»}"¥;'vIz:1cr1::si at I49/<3 per annum is from 01.07.1991 :9 29.10.1996 011

-- , the inlerssl paid bcfurc winding-

at 9% per annum from 29.10.1996 iu Al 9% per annum from 22.06.2001 to v--..':{}4;{f§§§_2006 on Rs.3,6S,I9,88-df-. And at 9% pa {mm . "(35.G9.2006 {iii paymmﬁ.

Insulhr as employees' ducts am wnczsrmzd, inicrcxi is agreed in» be paid at 9% pa. on Rs.S6,9'7,72G!- frum 29.10.1996 to 21.06.2001 and iaking iniu accmmi % §'§I?.» Rs.17,09,3l6/- paid on 21.06.2001 - at 9% on Rs.39,88,404/- from 22.05.2001 :0 at 9% pa. rmm 05-09.2006 :.:;3u%.e3.;zQo9. am * agreed to be sutiltxi wiihin 3c¢%agyg.

The Bangalpfe 'aszd. hiiysum City Corpuralien woui-d be seitlcd wikhip z*_iays.[ V ' V a:Rs.3ew sham shall be paid (:1:

5,_ 90 days from sanction of {he scheme. V' « 7:, :'I32?z;0t:sid::rifig"i&'}ic£her Ehtﬂ Scheme :11' Arrangcaneni in its :~:zmc-lioned M the ubjeciions raised by the semral fequims to be addmsscd.

" ; ''~ .Insufar as the ubjeciionx raised by (lac severai depusiturs are Vt ﬁanuerneti ~»~ it is to be kept in View that the majmrity of the dcjwsiiozs bath in number and value nameiy, 91-8% having Ea appmwd the scheme, it may nut be open for a dcposiiQf'«._lf3~».§:ow question the majurity decision. In any event, 3.5:, regards the interest payable being, inadequate ' ; anisfea-sauce proccmiings pending whu are petitioners being a disquggﬁﬁcaﬁoxa as pciiliuncrs have new assﬁrtgci 34% uptu the date of windingmp order a19??'e Insufszf' are uunucrned, the same issiiAist{t:;lA.._b}.vM ih;:°'€}_l3'3uial Liquidator on the: basis of a rt:p-Uri uf (:'i13r§éi¥§d:.4'}f&%§§t.;ﬂ:nianls in CA 640/2001 mud in Pclii:it3zV1V:§V3V'_3f and aiiuwed by this Court by ordur .A The teams of reference for the audit warm': as sﬁiuwsg "

.. LII: prcpanc an inventory and ytaar-wists list of the:

' records 9f the Company

2. Prepare: a baiamzc sht.-4:1 as on the: dais: of wind-ing--up ordar Q '1~i"é These bread observations and prima facic: ﬁndings hsﬁe been bodily incorporated in I116 application by lhc: (}II'1<;iaJ Liquidator without any further excmisc of um conclusions. And it is this applicatiun that _ continues to languish with little of summons ml the ml' having diud during flu: quurw of 'I'}'1Vt_:A£3l;}§t:c1iuns that lhzzrt: are scstiutis allegjitiiéins-s"' '~53:-dinstttors of the that (hay had willfully 0l}le1j*.;..z;1 t;1t.st:liAiig:VsH.hc¥d to amid.-.1 the Scheme of . «. are disqualiﬁed from pmpuumﬁng, the A in the light uf the nature :3? cumplainis an;;%%;he¢m.~a1m which the same slunds established while kwgaing _. .. iii'\'--i§W ﬁ#t: object and scope of Section 543 uf the: Act.

Section 543 of the: Act does an! uremic new righis or impose new liabilities. It is only a more cumrcnienl means of enfeming é H?' rights and remedies which would be enforceable by z~:v.:£'2i¢§z§,"««.:i_i"~VifvI'1t:r<*:

had been no winding-up.

The: pmcocding under this Sc§;;1iun..<d§~3c§--TT "

and tsvcry kind of claim whiéh._'_a delinquent directors at uﬂiccrs. relating to misfeasanm: or breach in duties in mlaiiun to the company' in whkzh they have bucumc E9 magligcncc or neglect of duly; _b_j,* of ii, will not create any liabiliiyu V .gppli;:»ilit;ri;" lhtsrclbre, should wntain a dciaiied _ :12s11j&iiGr:. acts of commission and umissiun am the part absence: of spuciﬁc pleading:-2 is fatal to Lht: '-».appliuziiig§i: (sec: Oﬂicial Liquidator V. Rczyntwa Desikachar; 45 camp. canes 136€>'C) $525 It is new wcli scaled that if a. scheme is, s:m«n to be fair, rcasunabie, nut contrary to i:-iiiiarii illegal and that the requisite majuri£}}%,A_hav:§iif€;i:iusrdi:d i' in its favuur, the Court uuglai -391 If paramctres set out in Suction {ht} Aéhli E1131 -~ the Cuurt iuuks nu furthe.-ir"' ; appeal over the: commercial wisdgJx:1_. of have given their apwoval. was:i§:sfV view»: at bclicr scheme mad hgvei_bé§hia;2a§a::d';a;§ge.i(:uur1's jurisdiction is pexipheral and supervistiry "ac.-tiiig 391 to 394.

A iimiiihaiq' by i1i£:"(3ujaml High Court in Re.Sic§mur M5113 AIR 1962 Gm 395 I: zzmaz ﬁrr {he Cater! to scrufinisz»: [he scheme in the rmmrzer as ea ' r critic, a ._ ''P"';& W " spiiflﬁrg eagezeri, a nugtimlous accuuntcmi er a faslidiuus _' ¢2f}zi!z$*éf'.

3 f" 2.'! Hence, m: an overall cunsidcratiun uf {he facis and circumstances, I deem it proper to aﬂhrd an opporlux;iiy""3g the petitioners to revive the company subject to cundiliuns imposed hereunder .

pctiliuncrs shall siand amended to {the 1£_§xi&ni :.a1' . imposod by [h§s order:

The pttliliun is V " ' The Subaru: of the pcliiiuncrs is accordvad sanaxiitéfx folkawing conditions: (1j~.*=';iiu 1hg;n:,g;mg;j.;;g;;a;on of the: schtsmes 19 its last magi, {ht} LbH:;':sompany shall nol alienate the assets of ' aha Secuwd C-rediiur, Czarpomlien Bank, shail V appmpriaic the amuuné of R.~s.8.6S Crow from {he date of this artist and the pciiiiunzsrs shail pay iniesmsl on (ht: same at 9% per annum ﬁum 6 *~.._..~m f 2&2 l5.i2.2007 1511 the dais uf paymtsnl, within .

from to-day. 'V (3) (a) The: pcliliunars shall pziy ;g,1.m¢«,.3 Deposiiors at lht: rate e.)l'v»E.::§:l'*'iri~._M»on "ﬂaw Rs.6,85,82,203I- rrum%;.7.199i £;;2% .m,1995;

(b) At the raw 019% ,3 from 29.IDg1I996::@u 21 .. %

(c) A! r.;;i.c?T.,r9«;/:9 j%;'5e.%i&.;snk'1é.s.3,¢s5,19,ss4/--

%%%% + (Rs.6;s5,32,2o3 aka.3,2o,52,319) W 7'_2'.'"7 ' ' . '{?'u.."V..I'!.?,a-96:3' 1hm22.5.%2oe%1k%:é L 2 " iii the r"a£e;_V£§f 9% per mmum on Rs.3,6S,l9,83«4l-- 17 2 till date ufpaymcnl.

payabit: in terms {if (21) and (b) ska}: bepzgggi within 30 days from the am of this gm arnuunts am: in ierms of (9) and (d) Qua principal amuuni within so days ﬁmn the .:_"V"d2:'4i.'§§"cf this urdcr. Any dispuied arnuunls to B4 deposited with this Cuurt. _ % ...7-loan') S13 (4) Thu ernpfuycmrs' dues in 8. sum of shall be paid with interest (21) Bum 29.10.1996 on Rs.s6,97,72Gxg tk

(b)And {mm tgn "ti1£1i;:.:,ﬁg:f_:§1aym¢:n1 an as.39,sg,;g;;4_g:(t;;m,;;,.;,'%tmt,,.,,,, The abogcfitzss afiéiig,' be paid within 39 days """ any cf the erstwhile in employment as on the V dale "vwiﬁding--up and who are ciigibic: for such .. ..... ..

;§i!t--:"pcﬁﬁencrs shall settle: all property taxns and ' -tiatlxcr statutory claims such as Provident Fund within 90 days 1302!: the date: of this artist. V' -- ";(6) The share: huldcrs dues Rs.3€*/- per share shall be paid or dspusitcd within 90 days fmm the date (1? this order.

é % aagtum 532.3%"

(7) The pcliiiuacrs as well as the _a report of the working W91' the implemcnlaiion of the vsghcgnu :3 "

Sclmmc is fuﬂy .

(8) The order gf T' Cami is hcwby V J (9; my1pmcia;%:;i§g;;.m: ;s% to am: over all {Q the pcliiiozmr.

.... "

Sdf-Q Tudg:é m"

--h?.6'-

AB]: Co.P.No. 10222009:

(3; \ ganja, 944/09, 67 00/02 ., .::éf4,/ /a.a;r;,'v§'g;V. 27.07.2009 3' 0% as $4-#06» as 6:5/03 ,' :22:Ms/osgga./ac;0%xs0000 ORDER ON FOR BEING s1éoKEN 'r0 There is a typographical error in ﬂ1¢__§p:§;a£iya piirihmw filhe grdcr daltsd 19.06.2009 at point read as:

3(6) "A! the rate uI4'_*--9% 1é;'6'5,l9,334/-- (Rs.6,85,82,2Q3«*' 9; 0 22.06.2001 10 The same: s1a::d$curri:s:£é'c{ »- é

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