IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

COMPANY APPLICATION NO. 16 OF 2024

Gujarat Mazdoor Panchayat

Regd. No. G-1014
(Affiliated to Hind Mazdoor Sabha) …. Applicant

Coram: Hon’ble Mr. Justice Nirzar S. Desai

Date : ____th April 2024

ORDER ON SUMMONS FOR DIRECTIONS

1. This application is filed by the abovenamed Applicant by summons

dated 18th March 2024, filed under Section 391 to 394 of the
Companies Act, 1956, in a proposed Scheme of Arrangement in the
nature of Compromise between Company in Liquidation and its
Shareholders and Creditors, including Workmen.
2. The Applicant is one of the creditors of the Company in Liquidation.
Accordingly, in view of Section 391 of Companies Act, 1956, it is
entitled to file summons dated 18 th March 2024 for convening
meeting of the Creditors or class of Creditors, or of the Members or
class of Members, as the case may be to consider Scheme of
Arrangement in the nature of Compromise between Company in
Liquidation and its Shareholders and Creditors, including Workmen
and if thought fit, approve with or without modification the proposed
Scheme of Arrangement and/or Compromise.
3. Ld. Sr. Advocate Mr. Devang Nanavati appearing with Ld. Advocate
Mr. Jaimin Dave and Mr. Saurabh Patel has submitted that meetings
under Section 391 of Companies Act, 1956 are required to be
convened only for the purpose of ascertaining the wishes of the
Shareholders and the Creditors and nothing further than that. It is
further submitted that this Court will examine the Scheme of
Arrangement and/or Compromise only when such s Scheme of
Arrangement and/or Compromise is approved by requisite statutory
majority i.e. majority in number representing three-fourths in value of
 the Creditors, or class of Creditors, or Members, or class of Members.
Ld. Sr. Advocate Mr. Devang Nanavati has placed reliance on
following judgements in support of this contention:
a. Rainbow Denim vs. Rama Petrochemicals Ltd., (2002) 10 SCC 499
b. Chembra Orchard Produce Ltd. vs. Regional Director of Company,
(2009) 2 SCC 547
c. Kotak Mahindra Bank Ltd. v. Balaram Cements Ltd., [2008] 146
COMP CASE 1 (Gujarat)
d. Asia Satellite Telecommunication Ltd. vs. Dish TV India Ltd., 2010
(120) DRJ 135
4. Ld. Advocate Mrs. P. J. Davawala appearing for the Official Liquidator
has submitted that the present judges summons is signed and
affirmed by one Jyantibhai Panchal, General Secretary of Gujarat
Mazdoor Panchayat. However, judges summons is not accompanied
by any resolution passed in favour of Jyantibhai Panchal, General
Secretary whereby members of Gujarat Mazdoor Panchayat has
authorized him to prefer the present judges summons. In view of this
present judges summons is not required to be entertained.
5. Therefore, the matter was adjourned to 12.04.2024 so as to enable
the Applicant to produce copy of resolution passed in favour of
Jyantibhai Panchal, General Secretary of Gujarat Mazdoor
Panchayat. Thereafter, Applicant has filed additional affidavit dated
9th April 2024 before this Court.
6. Ld. Sr. Advocate Mr. Devang Nanavati has drawn attention of this
Court to the additional affidavit dated 9 th April 2024 filed before this
Court. Along with the said affidavit, Applicant has produced copy of
resolution no. 6 dated 12.10.2021, wherein, General Secretary of
Gujarat Mazdoor Panchayat is authorized to any application or
litigation in the interest of members of the union. Furthermore, such
resolution is endorsed and approved by the president of the Applicant
vide letter dated 09.04.2024.
7. Having heard the learned advocates for respective parties, I am of the
considered opinion that at this stage this Court is required to pass an
order to convene the meetings of the Shareholders and the Creditors
including Workmen of the Company in Liquidation to consider and if
 thought fit, approve with or without modification the proposed
scheme of arrangement and/or compromise. Such an order does not
amount to entertaining the company petition to consider the Scheme
of Arrangement/ Compromise. The said exercise of convening
meetings is required to be undertaken to ascertain wishes of the
Shareholders and the Creditors including Workmen of the Company
in Liquidation. Only after the Scheme of Arrangement/ Compromise
is approved by requisite statutory majority of the Shareholders and
the Creditors including Workmen of the Company in Liquidation, the
scheme is to be submitted before this court for its sanction. It is at
this stage that the Court is required to entertain all the objections to
the Scheme of Arrangement/ Compromise.
8. ACCORDINGLY IT IS ORDERED:
a. That separate meetings of the Equity Shareholders, Secured
Creditors of Company in Liquidation, Unsecured Creditors of
the Company in liquidation and Workmen of Company in
Liquidation shall be convened and held at Hotel Kells, New
York Tower – A, Thaltej Cross Roads, S. G. Road, Ahmedabad
- 380054 in the State of Gujarat on Friday, the 25th July 2024
respectively at 10:00 a.m., 12:00 p.m., 2:30 p.m. and 4:00
p.m. for the purpose of considering and if thought fit,
approving with or without modifications, the Scheme of
Arrangement in the nature of arrangement/ compromise
between the Company in Liquidation and its shareholders and
creditors, including workmen.
b. That at least 21 clear days before the meetings to be held as
aforesaid, Notice convening the said meetings, indicating the
day, the date, the place and the time as aforesaid, together
with a copy of the Scheme of Compromise, copy of the
Explanatory Statement required to be sent under Section 393
of the Companies Act, 1956 and the prescribed Form of Proxy
shall be sent by a registered post ad, addressed to each of the
Equity Shareholders, Secured Creditors, Unsecured Creditors
and Workmen of Company in Liquidator, at their last known
address. The Applicant union is entitled to take inspection of
 records of the Company in Liquidation lying with the Official
Liquidator to obtain lists of Equity Shareholders, Secured
Creditors, Unsecured Creditors and Workmen of Company in
Liquidation with their names and addresses. The Official
Liquidator attached to this Court is directed to render all
assistance to the Applicant during the said inspection. A
certificate shall be obtained from the Postal Dept. confirming
the total number of dispatches so made.
c. That at least 21 clear days before the meetings to be held as
aforesaid, Notice convening the said meetings indicating the
day, the date, the place and time as aforesaid be published,
stating that copies of the Scheme of arrangement/
compromise, the Explanatory Statement required to be
furnished pursuant to Section 393 of the Companies Act,
1956 and Form of Proxy can be obtained free of charge at the
Hotel Kells, New York Tower – A, Thaltej Cross Roads, S. G.
Road, Ahmedabad - 380054 each in the Indian Express,
English daily and Divya Bhaskar, Financial Express, Gujarati
daily (both Ahmedabad editions).
d. Shri Tirthraj A. Pandya [Contact Details: +91-9925130020]
and failing him Shri Priyank S. Dave [Contact Details: +
9199790 06363] shall be the Chairman of the aforesaid
meetings to be held on 25 th July 2024 and in respect of any
adjournment or adjournments thereof.
e. That the Chairman appointed for the aforesaid meetings do
issue advertisements and send out notices of the said
meetings referred to above. It is further directed, that the
Chairman of the meetings shall have all powers under the
Articles of Association of the Applicant Company and under
the Companies (Court) Rules, 1959 in relation to conduct of
meetings, including an adjournment of the meetings, and/or
an amendment to the Scheme or resolution, if any, proposed
at the meetings by any person(s) and to ascertain the decision
of the meetings on a poll.
 f. That the quorum for the said meetings shall be ______ (____)
for the meeting of the Equity Shareholders, 2 (two) for the
meeting of the Secured creditors, 2 (two) for the meeting of the
Unsecured creditors and ______ (____) for the meeting of the
Workmen present in person or through authorized
representative or through proxy. In the absence of the
requisite coram the Equity Shareholders, Secured Creditors,
Unsecured Creditor and Workmen the meeting shall be
adjourned for 30 (thirty) minutes and in the adjourned
meeting the Equity Shareholders, Secured Creditors,
Unsecured Creditor and Workmen present for the respective
meetings shall constitute a valid coram.
g. That voting by proxy is permitted provided that the proxy in
the prescribed form and duly signed by the person entitled to
attend and vote at the aforesaid meetings, or by his authorized
representative, is filed with the Official Liquidator attached to
this Court, not later than 48 hours before the said meeting.
h. That the value of the vote of each Equity shareholder of the
Company shall be as per the entries in the Registers of the
company and that of the creditors and workmen as per the
entries in the books of accounts of the Company and where
the entries in the records or registers are disputed, the
Chairman of the meetings shall determine the value or
number for the purposes of the meetings and his decision in
that behalf would be final.
i. That the Chairman do report to this Court, the result of the
said meetings within 14 days of the conclusion of the meetings
and the said Report shall be verified by his affidavit.
j. The Official Liquidator attached to this Court shall render full
assistance in convening of the aforementioned meetings.
k. The Official Liquidator attached to this Court will be entitled to
attend the aforementioned meetings as an observer either on
their own or though his authorized representative.

9. The Application is hereby disposed off.