1999 (5) TMI 485

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....r of Companies. JUDGMENT 1. This is an application under section 391 of the Companies Act, 1956 ('the Act') for sanction of a scheme of arrangement and compromise between the company and its preferential shareholders. The company, according to the affidavit, is not functioning on profitable basis. It is impossible for the company to discharge its liabilities towards the preferential share-ho....

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.... the said scheme. 3. Notice had been issued to the Central Government and other necessary parties. It is contended on behalf of the Central Government that prefer-ence shares can be redeemed only in terms of section 80(1) of the Act. Such redemption shall be out of the profits earned by the company or out of the fund collected by issuing further shares. In the proposal made by the company prefe....