If the creditor wrongfully refuses to agree on the scheme, the Court cannot sanction the scheme or probe into the mala fide refusal of creditors to refuse the approval of the scheme.
MRTP Companies- Amalgamation Where two companies are carrying on the same business, there was no need to file application under section 23 of MRTP Act for amalgamation thereof, although both companies are registered under MRTP Act and requirements under section 23(3) of MRTP Act is fulfilled.
Where Company fails to make the application, a creditor or contributor may make the application.
CHAIRMAN’S REPORT While, sectioning the scheme of arrangement or compromise, the court may issue directions or make modification in the scheme as may be thought appropriate for proper working of scheme.
Where application section 391(1) is considered, The Calcutta High Court has held that no notice to Central Government is necessary.
However, Allahabad High Court has held that in such a matter both the Central Government and the Shareholders of the company is entitled to be heard before any decision is made under this section.
The concept paper recently issued by the Ministry of Company Affairs, the fate of which is still unknown, contained 100 such definitions but still stopped short of defining merger or amalgamation.A Foreign company which is an unregistered company is a ‘company’ under this section .The court can order an amalgamation of the Indian undertaking of a foreign company with an Indian Company.PROCEEDINGS It includes both civil and criminal proceedings.Where directors are sought to be proceeded against criminally for their act as director by the creditor pending the consideration of a scheme of arrangement, the criminal proceeding can be stayed for the limited purpose so that the directors are not pressurized by the creditors and the scheme can be considered effectively.All modes of reorganizing the share capital, takeover of shares of one company by another including interference with preferential and other special rights attached to shares can properly form part of an arrangement with members.