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 18th 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 9th 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 25th 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.