Revival scheme approval in winding-up proceedings where stakeholder consent, fairness, and feasibility support sanctioned restructuring.

Revival schemes in winding-up proceedings may be approved where statutory procedure is satisfied, the requisite shareholder and creditor approvals are obtained, and the proposal is bona fide, fair, workable and not contrary to law or public policy. The court may dispense with separate meetings when the relevant stakeholders have already consented and their interests are protected. Where revival is viable, the approach should favour sanction of the scheme over liquidation. On these facts, the meetings were dispensed with, the scheme was sanctioned, and the winding-up order was recalled subject to safeguards for unpaid liabilities, statutory claims and the Official Liquidator's expenses.

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Issues: Whether the requirement of convening meetings of equity shareholders, secured creditors and unsecured creditors for consideration of the proposed revival scheme should be dispensed with, and whether the winding up order should be recalled with approval of the revival scheme.

Analysis: The company had already liquidated substantially all secured liabilities, the secured creditors had been paid or had accepted settlement, the majority shareholders holding more than 75% of the equity had consented to the scheme, and the Official Liquidator supported the proposal. The Court applied the settled principles governing sanction of a compromise or arrangement under the Companies Act, 1956, namely compliance with statutory procedure, informed approval by the requisite majority, bona fide conduct, and a scheme that is just, fair, reasonable, feasible and not contrary to law or public policy. It further noted the established approach that, where revival is viable, the Court should lean in favour of revival rather than winding up.

Conclusion: The meetings were dispensed with and the revival scheme was approved.

Final Conclusion: The winding up order was recalled and the company was permitted to revive under the sanctioned scheme, subject to safeguards regarding unpaid liabilities, statutory claims and the Official Liquidator's expenses.

Ratio Decidendi: A company court may sanction a revival scheme and recall a winding up order where the statutory procedure is satisfied, the requisite majority has bona fide approved the scheme, creditors' interests are protected, and the proposal is fair, workable and in the interest of revival.

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