Scheme of arrangement sanctioned where statutory procedure was met, the proposal was bona fide, and no legal impediment arose.

A scheme of arrangement may be sanctioned where the statutory procedure is complied with, notice is duly served and advertised, and no legal objection or impediment is shown. The shareholders' meeting report confirmed compliance with the Court's directions, the Regional Director did not oppose approval, and the scheme was found bona fide. The scheme was therefore sanctioned and made binding on the companies, their shareholders, and all concerned, with transfer and vesting of the property division and related liabilities operating in accordance with section 394(2) of the Companies Act, 1956.

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Issues: Whether the Scheme of Arrangement between the companies deserved sanction by the Court.

Analysis: The report of the shareholders' meeting showed compliance with the Court's directions under the Companies (Courts) Rules, 1959. Notice had been duly served and advertised, and the Regional Director chose not to oppose the sanction. The Scheme appeared to have been made bona fide and no legal bar to approval was shown. The transfer and vesting of the property division and related liabilities were to operate in accordance with section 394(2) of the Companies Act, 1956.

Conclusion: The Scheme of Arrangement was sanctioned and made binding on the companies, their shareholders, and all concerned.

Final Conclusion: The arrangement was approved, and the property division was directed to stand transferred in terms of the sanctioned scheme with consequential vesting and continuance provisions.

Ratio Decidendi: A scheme of arrangement may be sanctioned where statutory procedure is complied with, the scheme is bona fide, and no objection or legal impediment is shown to its approval.

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