Requisitioned meeting cannot block a pending scheme petition when statutory approval process under company law is already underway.

A requisitioned shareholders' meeting cannot be used to force withdrawal of a pending scheme petition under section 391 once the statutory meetings have been properly held and the required majority has approved the scheme. At that stage, the company has a statutory duty to present the petition for sanction, and a later meeting aimed at stalling the court process is impermissible. The protective principles for requisitioned meetings under section 169 do not apply where the proposed resolution obstructs the court's jurisdiction under section 391 and no concrete alternative scheme is disclosed. The explanatory statement must also fairly disclose the proposal; a vague or misleading statement may justify restraint of the meeting.

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Issues: Whether shareholders could requisition and hold an extraordinary general meeting to compel withdrawal of a pending scheme petition under section 391 of the Companies Act, 1956, and whether such meeting could be restrained by injunction.

Analysis: A scheme of amalgamation approved at properly convened statutory meetings under section 391 creates a binding process governed by the Companies Act and the Companies (Court) Rules, 1959. Once the statutory meetings have been held and the requisite majority has approved the scheme, the company is under a statutory duty to present the petition for sanction within the prescribed time. A later requisitioned meeting cannot be used to defeat that statutory obligation by requiring withdrawal of the pending petition. The requisition in question was not aimed at ordinary internal management, but at stalling the court process under section 391. No specific alternative scheme was placed before the shareholders, and the asserted change of mind of some shareholders and creditors did not furnish a legal basis to interfere with the pending petition. The protective principles governing requisitioned meetings under section 169 of the Companies Act, 1956 did not apply where the proposed resolution was directed to an impermissible object and would obstruct the court's jurisdiction under section 391. The explanatory statement was also found to be vague and misleading in so far as it failed to disclose any concrete alternative proposal.

Conclusion: The requisitioned meeting was liable to be restrained, and the injunction was granted against holding and proceeding with the meeting.

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