Ex parte summons for amalgamation directions under company law requires only a prima facie review, not prior hearing of stakeholders.

At the stage of a summons for directions under section 391(1) of the Companies Act, the Company Court proceeds ex parte under Rule 67, subject to Rule 68 where applicable. The court need only form a prima facie view on the genuineness and bona fides of the proposed amalgamation scheme and confirm compliance with the procedural requirements for convening a meeting. Hearing creditors, members and shareholders is reserved for the later notice-and-meeting stage under Rules 73, 74 and 76. The distinction between the preliminary direction stage and the subsequent meeting stage is essential to the workable operation of the scheme provisions.

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Issues: Whether an application under section 391(1) of the Companies Act, 1956 seeking directions to convene a meeting of creditors and members for consideration of a scheme of amalgamation must be heard ex parte under Rule 67 of the Companies (Court) Rules, 1959 or after hearing the shareholders and creditors.

Analysis: Rule 67 expressly provides that the summons for directions shall be moved ex parte, subject to Rule 68 where applicable. Read with Forms 33 and 34 and the checklist in Rule 69, the Court at this threshold stage is only required to satisfy itself prima facie about the genuineness and bona fides of the scheme and whether the procedural requirements for convening a meeting are met. The statutory scheme shows a clear distinction between the preliminary stage of issuing directions to convene a meeting and the later stage when notice of the meeting is issued under Rules 73, 74 and 76. Requiring prior hearing of all creditors, members and shareholders at the threshold would make the scheme under sections 391 to 394 unworkable.

Conclusion: The summons for directions under section 391(1) is to be moved and considered ex parte, and prior hearing of creditors, members and shareholders is not required at that stage.

Ratio Decidendi: At the stage of issuing directions to convene a meeting under section 391(1), the Company Court acts on an ex parte summons and need only form a prima facie view on the bona fides and procedural compliance of the proposed scheme; hearing of creditors or members is reserved for the subsequent meeting and notice stage.

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