https://www.taxtmi.com/caselaws?id=304232 A scheme of compromise or arrangement under section 391 of the Companies Act, 1956 binds only the creditor class for which notice is given, a meeting is duly convened, and approval is obtained by the prescribed majority; secured and statutory creditors are separate classes, so a scheme approved only by unsecured creditors cannot affect them. The court must also independently satisfy itself that material facts have been fully disclosed and that the arrangement is bona fide and commercially viable; creditor support alone is insufficient. Because no notice or meeting was held for the affected creditor classes and no proper judicial satisfaction on disclosure or viability was recorded, sanction of the scheme was unsustainable. en-us Mon, 14 Dec 1998 00:00:00 +0530 Wed, 14 Sep 2022 11:23:45 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=304232 A scheme of compromise or arrangement under section 391 of the Companies Act, 1956 binds only the creditor class for which notice is given, a meeting is duly convened, and approval is obtained by the prescribed majority; secured and statutory creditors are separate classes, so a scheme approved only by unsecured creditors cannot affect them. The court must also independently satisfy itself that material facts have been fully disclosed and that the arrangement is bona fide and commercially viable; creditor support alone is insufficient. Because no notice or meeting was held for the affected creditor classes and no proper judicial satisfaction on disclosure or viability was recorded, sanction of the scheme was unsustainable. Case-Laws Companies Law Mon, 14 Dec 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=304232