https://www.taxtmi.com/caselaws?id=111790 A scheme of compromise or arrangement under the Companies Act, 1956 requires full and fair disclosure of all material facts, and non-disclosure of the Reserve Bank of India's action and directions concerning the company amounted to suppression of relevant facts, vitiating the approval process. The scheme also could not be sanctioned because its terms would have diluted the mandatory repayment regime under Chapter III-B of the Reserve Bank of India Act, 1934, which has overriding effect and protects depositors. A section 391 scheme cannot be used to circumvent a special statutory repayment obligation or render its enforcement provisions ineffective. The sanction order was therefore unsustainable. en-us Wed, 30 Apr 2008 00:00:00 +0530 Mon, 08 Dec 2014 17:29:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=111790 A scheme of compromise or arrangement under the Companies Act, 1956 requires full and fair disclosure of all material facts, and non-disclosure of the Reserve Bank of India's action and directions concerning the company amounted to suppression of relevant facts, vitiating the approval process. The scheme also could not be sanctioned because its terms would have diluted the mandatory repayment regime under Chapter III-B of the Reserve Bank of India Act, 1934, which has overriding effect and protects depositors. A section 391 scheme cannot be used to circumvent a special statutory repayment obligation or render its enforcement provisions ineffective. The sanction order was therefore unsustainable. Case-Laws Companies Law Wed, 30 Apr 2008 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=111790