Section 279

Compromise with creditors and members.— (1) Where a compromise or arrangement is proposed between a company and its creditors or any class of them, or between the company and its members or any class of them, the [1][Commission] may, on the application of the company or of any creditor or member of the company or, in the case of a company being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members of the company or class of members, as the case may be, to be called, held and conducted in such manner as the [2][Commission] directs.

(2) If a majority in number representing three-fourths in value of the creditors or class of creditors, or members, as the case may be, present and voting either in person or, where proxies are allowed, by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the [3][Commission] be binding on the company, all its creditors, all the members, the liquidators and the contributories of the company, as the case may be:

Provided that no order sanctioning any compromise or arrangement shall be made by the [4][Commission] unless the [5][Commission] is satisfied that the company or any other person by whom an application has been made under sub-section (1) has disclosed to the Commission, by affidavit or otherwise, all material facts relating to the company, such as the financial position of the company, the auditor’s report on the latest accounts of the company, the pendency of any investigation proceedings in relation to the company and the like.

(3) A copy of the order under sub-section (2) sanctioning the compromise or arrangement duly certified by an authorised officer of the [6][Commission] shall be forwarded to the registrar within seven days from the date of the order.

(4) A copy of the order under sub-section (2) shall be annexed to every copy of the memorandum of the company issued after the order has been made or in the case of a company not having a memorandum to every copy so issued of the instrument constituting or defining the constitution of the company.

(5) The Court may, at any time after an application has been made to the [7][Commission] under this section, stay the commencement or continuation of any suit or proceeding until final disposal of the application.

(6) In this section the expression “company” means any company liable to be wound up under this Act and the expression “arrangement” includes a re-organisation of the share-capital of the company by the consolidation of shares of different classes or by the division of shares into shares of different classes or by both those methods, and for the purposes of this section unsecured creditors who may have filed suits or obtained decrees shall be deemed to be of the same class as other unsecured creditors.

(7) Any contravention or default in complying with requirements of sub-section (4) shall be an offence liable to a penalty of level 1 on the standard scale.

[1] The word “Court” substituted with word “Commission” through Companies (Second Amendment) Ordinance, 2020 dated 07-07-2020

[2] The word “Court” substituted with word “Commission” through Companies (Second Amendment) Ordinance, 2020 dated 07-07-2020

[3] The word “Court” substituted with word “Commission” through Companies (Second Amendment) Ordinance, 2020 dated 07-07-2020

[4] The word “Court” substituted with word “Commission” through Companies (Second Amendment) Ordinance, 2020 dated 07-07-2020

[5] The word “Court” substituted with word “Commission” through Companies (Second Amendment) Ordinance, 2020 dated 07-07-2020

[6] The word “Court” substituted with word “Commission” through Companies (Second Amendment) Ordinance, 2020 dated 07-07-2020

[7] The word “Court” substituted with word “Commission” through Companies (Second Amendment) Ordinance, 2020 dated 07-07-2020