S KRISHNA MURTHY Vs. HOYSALA BUILDING DEVELOPMENT

JUDGEMENT

(1.) This petition under sections 391 to 394 of the Companies Act, 1956 (hereinafter referred to as 'the Act' for short) is filed seeking sanction of the scheme of arrangement (Annexure-C) in respect of M/s Hoysala Building Development Company (P.) Ltd. which is in liquidation (hereinafter referred to as the 'Company in liquidation'). The petitioners herein are the creditors of the Company-in-liquidation. This Court by the order dated 13.06.2002 in Co. P. No. 63/1991 at the instance of the creditors ordered the winding up and the Official Liquidator has been appointed in that regard. During the pendency of the further proceedings, the first petitioner herein with one Sri Varaha Venkatesh propounded a scheme of arrangement (Annexure-C) and approached this Court in CA. No. 1074/2008 for a direction to the respondent company to convene the meeting of the shareholders as also the secured and unsecured creditors, to appoint a Chairman for the meeting and fix the schedule for the same. This Court by the order dated 03.03.2009 allowed the application and the meeting of the shareholders and the unsecured creditors was ordered to be held on 15.04.2009 at 1030 a.m. and 11.30 am. respectively. Sri Sanjay Nair, Advocate was named the Chairman. Accordingly, the meeting had been convened. The creditors have consented to the scheme while the shareholders have voted against the scheme. Subsequent thereto, the instant petition has been filed. During the pendency of the petition, an amendment has been introduced only to the petition and the propounder of the scheme (Sri Varaha Venkatesh) who was the second petitioner has been deleted and the present petitioner Nos. 2 to 5 have been brought on record.

(2.) The filing of the petition had been advertised and was also notified to the Regional Director. Ministry of Corporate Affairs, and the Official Liquidator, who have filed their response indicating deficiency in the scheme. The shareholders are also represented by their counsel and have opposed the scheme.

(3.) In the above background, I have heard Sri B. Aswathaiah, learned counsel for the petitioners, Sri Naganand, learned senior counsel appearing for the shareholders and Sri K.S. Mahadevan, learned counsel for the Official Liquidator and perused the materials on record.