Compromise and arrangement may be sanctioned when statutory majority supports it and no stakeholder prejudice remains.

A compromise and arrangement supported by the requisite statutory majority and unopposed after public notice may be sanctioned under the Companies Act where compliance cures concerns on stamp duty and authorised share capital, and no material shows prejudice to shareholders or other stakeholders. The scheme was therefore approved.

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Issues: Whether the proposed scheme of compromise and arrangement should be sanctioned under the Companies Act.

Analysis: The proposed scheme had been approved by the requisite statutory majority of the concerned lenders. Public notice of the petition elicited no objections. The concerns raised by the Central Government regarding stamp duty and increase in authorised share capital were addressed by compliance during the proceedings, and no remaining material showed that sanctioning the scheme would prejudice the interests of the shareholders or other concerned persons.

Conclusion: The scheme was found fit for sanction and was approved.

Ratio Decidendi: A compromise or arrangement supported by the requisite statutory majority and not shown to be prejudicial to the interests of the stakeholders may be sanctioned when no substantive objection survives.

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