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Reference has been made to Rule 69(4) of the Rules of 1959 which provides that the Company Judge upon hearing the petition for calling of the statutory meetings can direct, as necessary on the fixing of quorum and the procedure to be followed at the meeting including voting by proxy. However, the learned Company Judge under his order dated 04.10.2012 not having fixed a quorum of minimum five members being necessary for the meeting of 09.11.2012, it cannot be held to be invalid on count of only four members participating. Sections 391 to 394 of the Act of 1956 constitutes a code in themselves and drawing on Section 174 of the Act of 1956 to test the validity of the members' meeting of 09.11.2012 is misdirected. It has been averred that a general meeting called by the company itself under Section 174 of the Act of 1956 is qualitatively and conceptually different from a meeting of class of members/shareholders in pursuance to notices issued by the Court in the course of considering an application for amalgamation merger/demerger or scheme of arrangement qua a company. In any event the members' meeting of 09.11.2012 had been convened and conducted under the supervision and guidance of the chairperson appointed by this Court under its order dated 04.10.2012 who did not raise any objection with regard to the quorum and hence such an objection should not be entertained at this stage by this Court. The sequitur is that the manner of holding and conducting the meetings of a class of members or creditors with reference to Section 391(1) of the act of 1956 is to be as per the directions of the Company Court and absent such directions, it is only to be determined whether the requisite majority of shareholders as mandated under Section 391 of the Act of 1956 had approved the scheme under consideration. Once the requisite majority of shareholders approves the scheme at a court convened meeting, the Court cannot sit as if in review or appeal over the commercial wisdom of the shareholders on technical grounds.

Mr. Paras Kuhad, Sr. Advocate emphatically submitted that a general meeting of a company is clearly distinguishable from a meeting of a class of members or creditors convened by the Court as provided for under Sections 391-394 of the Act of 1956. Therefore the requirement in relation to quorum under Section 174 of the Act of 1956 would not apply to such meetings including one of its members when convened by the Court. He submitted that Section 174 of the Act of 1956 was wholly irrelevant and invoked only to obfuscate the issue. Reference has been made to the judgment of the Bombay High Court in the case of Khandelwal Udyog Limited and ACME Mfg. Ltd. In re (Bomb.) decided on 13.08.1976 and the decision of the Hon'ble Madras this High Court in the case of Subhiksha Trading Services Limited, In re Blue Green Constructions and Investments Limited, In re [(2011) 161 Comp Cas 454 (Mad)] wherein it has been held that the Act of 1956 itself maintains a clear distinction between two kinds of meetings referred above. It has been submitted that Section 170 of the Act of 1956 itself spells out the distinction between general meeting of the company on the one hand and the meetings of the members or creditors on the other. It has been submitted that while Section 174 of the Act of 1956 provides for quorum of meeting for annual general meeting or extraordinary general meeting . Rule 69(4) of the Rules of 1959 provides that the Judge on a first motion moved under Sections 391/394 of the Act of 1956 unless he thinks fit for any reason to dismiss the summons, give such direction as he may think necessary in respect of fixing the quorum and the procedure to be followed at the meeting or meetings of class/es, shareholders and creditor/s, including voting by proxy with such variation as permitted. It has been submitted that the manner of holding and conducting a meeting of a class of members or creditors of a company seeking a scheme of arrangement under Sections 391-394 of the Act of 1956 is to be determined as per direction of the Court. Where no specific direction inter alia with regard to the quorum had been issued by the Court, it would not entail a meeting of the member of the company held despite the majority of members present voting for the scheme with the requisite over 3/4th value of the shares being rendered invalid for lack of quorum. The two dual tests for the shareholders meeting under Section 397(1)(a) of the Act of 1956 stand satisfactorily met as per the report of the Chairpersons submitted, qua shareholders / members' meeting of 09.11.2012. Reference has been made to the judgment of the Gujarat High Court in Company Petition No.224/2012 in Company Application No.272/2012 titled as Paraan Ltd., decided on 29.04.2013 where objection to the scheme of arrangement made by the Regional Director inter alia for reason of lack of quorum in the meeting of class of members called under the court's order without any specific direction as to quorum were overlooked and the scheme sanctioned.