Scheme of arrangement sanctioned and held binding on transferee-company shareholders, subject to approval for the transferor-companies.

A scheme of arrangement, modified by the appointed date, was sanctioned because shareholders and creditors unanimously approved it, statutory notices were issued, no objection was raised by the concerned authorities, and the arrangement was found not prejudicial to any person. The sanction made the scheme binding on the shareholders of the transferee-company, subject to approval by the Calcutta High Court in respect of the transferor-companies.

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Issues: Whether the scheme of arrangement, as modified by the appointed date and approved by the shareholders and creditors, deserved sanction by the Court and would bind the shareholders of the transferee-company.

Analysis: The scheme had been unanimously approved by the shareholders and creditors, subject to the modification of the appointed date. Notices had been issued to the concerned statutory authorities and the scheme had been duly advertised, but no objection was raised. The arrangement was found not to be prejudicial to any person. The sanction was also made subject to approval by the Calcutta High Court in respect of the transferor-companies.

Conclusion: The scheme of arrangement was sanctioned and declared binding on the shareholders of the transferee-company, subject to sanction by the Calcutta High Court in respect of the transferor-companies.

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