Scheme of arrangement sanctioned after creditor and shareholder consent, with no prejudice, statutory breach, or public interest objection.

A scheme of arrangement and compromise between a company and its shareholders was sanctioned where the procedural requirements were satisfied, including shareholder consent, no objection from secured creditors, and a no-objection report from the Regional Director. The scheme was treated as compliant with the Companies Act, 1956 because it did not prejudice any stakeholder, did not violate statutory provisions, and was considered fair, just, sound, and not opposed to public policy or public interest. The absence of any pending proceeding under Sections 231 to 237 further supported sanction of the arrangement.

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Issues: Whether the scheme of arrangement and compromise between the company and its shareholders deserved sanction under the Companies Act, 1956.

Analysis: The required procedural steps were shown to have been complied with, including shareholder consent, no objection from secured creditors, and the report of the Regional Director indicating no objection. The scheme was found not to prejudice any stakeholder, not to violate statutory provisions, and to be fair, just, sound, and not contrary to public policy or public interest. No proceeding under Sections 231 to 237 of the Companies Act, 1956 was shown to be pending.

Conclusion: The scheme of arrangement and compromise was sanctioned.

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