Independent provisos under section 394(1): dissolution without winding up requires an Official Liquidator report irrespective of the first proviso.

The two provisos to section 394(1) are directed to distinct factual situations and operate independently: the first proviso requires a report where a scheme affects a company that is being wound up and supplies oversight via the Registrar or Company Law Board, while the second proviso governs orders for dissolution without winding up and mandates a report by the official liquidator after scrutiny of books and papers; accordingly the second proviso applies to dissolution without winding up irrespective of engagement of the first proviso, benefiting the appellant.

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Issues: Whether the two provisos to section 394(1) of the Companies Act, 1956 operate independently, i.e., whether the second proviso (requiring a report from the official liquidator before dissolution without winding up) applies only when the first proviso (requiring a report where a company is being wound up) also applies, or whether each proviso governs distinct situations.

Analysis: Sections 391 and 394 concern court sanction of compromises and arrangements including schemes of reconstruction or amalgamation. Clause (iv) of section 394(1) contemplates dissolution without winding up. The first proviso refers specifically to schemes involving a company "which is being wound up" and requires a report from the Company Law Board or the Registrar in that situation. The second proviso refers specifically to an order for dissolution of a transferor-company "without winding up" and requires a report from the official liquidator after scrutiny of books and papers. The text, context and structure show that the provisos address different factual situations and impose distinct reporting requirements tied to those situations; they are not conditionally dependent on one another.

Conclusion: The two provisos to section 394(1) operate in respect of different situations and are independent; the second proviso applies to dissolution without winding up irrespective of whether the first proviso is engaged. This conclusion is in favour of the appellant.

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