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COMPROMISE AND ARRANGEMENT ‘Compromise’ is an expression which implies the existence of a dispute such as relating to rights, which it seeks to settle.

‘Arrangement’ is a term of very wide import, and its meaning is not to be limited to something analogous to a compromise to a compromise.

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.

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.

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.

If not, alter the object clause of memorandum by following the procedure laid down under section 17. The Draft scheme of amalgamation (based on fair exchange ratio) prepared and approved by the Board of Directors. 38 of Companies Court Rules and include the aforesaid statement or a notification of the place at which and the manner in which the members who are entitled to attained the meeting may obtain copies thereof [ Rule 74 of Companies Court Rules ]. If the amalgamation affects the rights of debenture holders, the said statement shall give the like information and explanation as respects the trustees of any deed for securing the debenture as it is required to give as respects the company’s Directors [section393(2)]. Provide a copy of statement free of charge to every creditor or member applying for the same within 24 hours of the requisition made so. Ensuring the chairman appointed by the Court for the meeting of company or any other person files an affidavit at least 7 days before the meeting showing the directions regarding the issue of notice and advertisement have been compiled with [Rules 75 and 76 of Companies Court Rules]. Hold the general meeting and pass the resolution as mentioned below: 1. 23 along with copy of resolution and explanatory statement with filing fee with the Registrar of Companies within 30 days of passing. The Chairman should report the result of the meeting to the court on form no 39 within time fixed by the court or within 7 days of conclusion of meeting. Move the High Court for approval by submitting a petition in Form no.

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 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.

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The Act and the relevant rules pertaining to amalgamation are to be followed scrupulously.

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