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.Where both companies have their registered office in different states, each company shall move to the respective High Court for directions. The certified copy of the order of the High Court shall be filed in form no. as approved by High Court is implemented a s per direction of the High Court by issue of suitable notice to the shareholders. Convene a Board meeting and pass Board resolution for allotment of shares to the shareholders of the transferor company in exchange of shares held in the transferor company and fixing of record date for the purpose. Provisions of this section confer wide powers and authorities in the Courts to enforce and make effective a compromise or an arrangement. The provisions of section 6 of Specific Relief Act 1963 cannot override the provisions of section 391and 392 of the Act. : INFORMATION AS TO COMPROMISES OR ARRANGMENTS WITH CREDITORS AND MAMBERS.21 with filing fee with the Registrar of the Companies. A copy of every order must be annexed to every copy of the memorandum of association issued after the certified copy of the said order has been filed with the Registrar of Companies. Supervisory powers are given to the court to ensure the carrying out of the compromise or arrangement. Notice given for the meetings of members of members, creditors or any class of them should contain explanatory statements giving the particulars of compromise and arrangement and their effects, Further it should indicate material interest of Directors, Managing Directors, or Manager as such or as shareholders or Creditors.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.
Whereas Merger means the combining of two or more entities into one, through a purchase acquisition or a pooling of interests.
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.
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.
POWER TO COMPROMISE OR TO MAKE ARRANGEMENTS WITH THE CREDITORS AND MEMBERS.