ANAND BYRAREDDY, J. ( 1 ) THE appellants are creditors of the respondent, namely, Maharashtra Apex Corporation limited, a company incorporated under the Indian Companies Act, 1913, in the year 1943. The said company was, inter alia, engaged in deposit mobilization, hire-purchase, leasing, bill discounting and money changing. It was classified as a hire-purchase and equipment leasing company by the Reserve Bank of India. For the year ending 31, March 2002 the accumulated losses of the respondent company stood at Rs. 105. 85 crore. The appellants, who have invested a sum of Rs. 1. 05 crore in several schemes floated by the respondent, had filed a petition for winding up of the respondent on the ground that it had become commercially insolvent as it was unable to pay monies due to them, in Company Petition 206/2002. The respondent on the other hand filed a petition for sanction of a Scheme under sections 391, 392, 393 read with Section 394-A of the Companies Act, 1956, in Company; petition 37/2003. The company Court had allowed the said petition. And as a result, has dismissed the petition of the appellants, as having become infructuous. These common appeals are filed against the above said orders. ( 2 ) THE counsel for the appellant has contended as follows : the respondent company had by the year 2002 become commercially insolvent. This was evident from the financial statement of the company for the year ending March 2002. The Reserve Bank of India had withdrawn the license issued by it to the company, to operate as a non-banking financial institution. These circumstances warranted the winding up of the company. However, the company had propounded a scheme and had approached the Company Court for approval of the same. A meeting of Creditors and Shareholders to consider the said scheme was held under orders of the Company Court. But as seen from the record the claim that the scheme is approved by the statutory majority was not tenable in the eye of law. And that the Company court having sanctioned the Scheme, on such an approval, has committed an error. But as seen from the record the claim that the scheme is approved by the statutory majority was not tenable in the eye of law. And that the Company court having sanctioned the Scheme, on such an approval, has committed an error. ( 3 ) ELABORATING further, the counsel would submit that less than 2% of equity shareholders, 7% of the Preference Shareholders, 15% of the Bond holders and 12% of the Deposit holders of the company had voted at the meeting of share-holders and Creditors, hence the scheme could not have been approved as it is plain that 75% of the value of the Creditors and shareholders of the company had not attended the meeting nor approved the scheme. That the purported approval of the scheme by a small section of the creditors and shareholders of the company cannot bind the large majority. ( 4 ) THE counsel would submit that from a reading of Section 391 of the Companies Act, 1956 (hereinafter called the Act, for brevity), it can be said that the statutory requirement contemplates a quorum consisting of three- fourths of the value of all the share-holders and creditors of the company and not merely of those present and voting at the meeting. It is hence contended that the purported approval of the scheme is without reference to a mandatory requirement. ( 5 ) IT is contended that the scheme propounded was in violation of the Reserve Bank of India's directives and was engineered only to defeat the right of the Creditors which the company Court has completely glossed over in approving the Scheme. The same was unfair and opposed to the interest of the entire body of creditors. ( 6 ) IT is also contended that in the case of miheer H. Mafatlal v. Mafatlal Industries Ltd. , air 1997 SC 506 , it is held that the majority decision of the concerned class of the voters should be just and fair to the class as a whole, so as to be legitimately binding even the minority of the class. And that the scheme even if passed by the majority is not unconscionable, illegal or unfair. ( 7 ) IT contended that the Company Court has, while placing reliance on the decision in the case of Swift Formulations Private Limited in re 2004 Vol. And that the scheme even if passed by the majority is not unconscionable, illegal or unfair. ( 7 ) IT contended that the Company Court has, while placing reliance on the decision in the case of Swift Formulations Private Limited in re 2004 Vol. 121 Company Cases 27 : (2004 CLC 745), failed to appreciate that the full Court in that judgment had no occasion to consider the following aspects : (a) The quorum required for the meeting (b) Whether the decision taken by a minority of the creditors of the company who had attended the statutory meeting would bind the majority. ( 8 ) THAT the single Judge had failed to appreciate that the scheme propounded by the respondent is contrary to Section 58a of the companies Act and it was with the intention to overcome or defeat the said Section that. the Scheme had been propounded. The Counsel would therefore submit that the appeal be allowed. ( 9 ) PER Contra, the counsel for the respondent would argue that in so far as the principal contention of the appellants is concerned, as regards the approval of the Scheme by majority, that it is a settled principle of law that the majority contemplated is that of the class of members or the creditors present and voting in the respective class meetings and the same cannot be disregarded by a miniscule minority of creditors who had not even taken steps to attend and vote at the meetings convened. The stand taken is misconceived and opposed to the plain language employed in section 391 of the Act. ( 10 ) FURTHER, in so far as the Scheme being engineered to defeat the interests of the Creditors or others is concerned, it is contended, that the entire facts leading to the filing of the company application seeking sanction of the court for the Scheme of arrangement and restructure had been furnished in detail in the explanatory statement furnished pursuant to the provisions of Section 393 of the Act and the Objectors not having taken any steps to attend the meetings convened and expressed their objections or voting against the Scheme cannot he permitted to take up objections against the wishes of those who had already approved the Scheme. The learned single judge had dealt with the contentions of the appellants at length and in the light of the settled legal position and hence there is no scope for interference in the present appeals. ( 11 ) THE counsel would draw particular attention to the large number of authorities that have been considered by the learned single judge in passing the impugned order. And prays that the appeals be dismissed with costs. ( 12 ) ON a consideration of the rival contentions and the material placed on record, without having to repeat the list of authorities already taken note of by the learned single judge, the principal contention of the counsel for the appellants as regards the "majority" of the class of members contemplated, is addressed with reference to the commentary on section 206 of the Companies Act, 1948 of england, which corresponds to Section 391 of the Act. Shackleton on the Law of Meetings Seventh Edition at page 137-140 reads as follows : "the quorum for a meeting to approve a scheme will be as prescribed in the company's articles in relation to the particular class or body of shareholders concerned or in, for example, the trust deed relating to debenture stock. The majority in favour of the scheme must be a majority in number representing three-fourths in value of the creditors or class of creditors or members or class of members, as the case may be, present and voting either in person or by proxy at the meeting. It should be noted that the majority is dual, in number and in value; a simple majority of those voting is sufficient, whereas the "three- fourths" requirement relates to value. By way of illustration : a. All 1,000 members of a class holding 10,000 shares vote; of these, one member holds 3,000 shares and he votes against; the remaining 7,000 shares are spread among the other 999 members. Even if all 999 vote in favour, they will not constitute the necessary majority because they cannot muster three- fourth in value. B. The member holding 3,000 shares is persuaded to abstain from voting; when the votes are counted 500 members holding 5,300 votes are found to have voted in favour and 499 members holding 1,700 votes to have voted against. The resolution is carried. B. The member holding 3,000 shares is persuaded to abstain from voting; when the votes are counted 500 members holding 5,300 votes are found to have voted in favour and 499 members holding 1,700 votes to have voted against. The resolution is carried. C. If, in example B, one more member, holding one vote, had been persuaded to vote against the resolution, the result would have been : in favour, 499 members holding 5,299 votes; against, 500 members holding 1,701 votes. The resolution is lost. D. (A more extreme version of C) The big shareholder decides to cast his vote for the resolution. In the result, 500 members (including the large holder) cast, 8,299 votes in favour; there are 500 members carrying 1,701 votes, against. The resolution is lost. After the class meetings convened under section 206 have been held, the chairman prepares a report supported by affidavit which is presented to the Court. The Court will then decide whether or not to sanction the scheme. In doing this, it normally takes into account three factors : (a) The meetings must have complied with sections 206 and 207 : the Court will check that the meetings have been duly convened and held and that the resolutions have been passed by the appropriate majorities prescribed by Section 206 (2) and that all relevant classes have given their consent. (b) Each class must have been fairly represented at the meetings. The Court will look behind the majorities achieved for each resolution to ensure that each class is fairly represented. For instance, it will not usually be satisfied if only a very small number of votes are cast in total, either in person or by proxy. If, following the examples above, not only the large shareholder, but may others as well, abstained from voting, so that the result was : in favour. 50 members holding 500 votes; against: 40 members holding 100 votes; abstaining : 910 members holding 9,400 votes; the scheme would be unlikely to be sanctioned. Equally, the Court will be vigilant to ensure that no part of any majority is tainted by bias or conflict of interest. (c) The proposal must be reasonable in an objective sense. The Court will take note of the size of the majorities at the meetings, but will refuse to sanction an inequitable scheme. Equally, the Court will be vigilant to ensure that no part of any majority is tainted by bias or conflict of interest. (c) The proposal must be reasonable in an objective sense. The Court will take note of the size of the majorities at the meetings, but will refuse to sanction an inequitable scheme. In a case where the scheme was in effect an acquisition of one Company by another, the Court refused its sanction because one share holder with 13. 95 per cent of the shares objected; it was held that if the purchasers had proceeded by way of Section 209 of the 1948 Act (relating to the power to acquire dissenting shares in a takeover) that percentage would have been sufficient to block the scheme. The general rule has been summarised as follows : the Court must be satisfied that "the proposals such as intelligent and honest members of the classes concerned, acting in respect of their own interests, would approve". The compromise or arrangement, if sanctioned by the Court, is then binding on all the creditors or the class of creditors, or on the members or class of members, as the case may be, and also on the company or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company. An order under Section 206 (2) will have no effect until an office copy of the order has been delivered to the Registrar, and a copy of every such order must 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, or every copy so issued of the instrument constituting or defining the constitution of the company. Default fines are prescribed for non-compliance. ( 13 ) IT is to be observed that the counsel for the appellants has canvassed the view under consideration notwithstanding the over whelming authorities cited in apposition, primarily on the premise that the said authorities are not binding on this Court. We are not inclined to subscribe to the view of the counsel of the appellants. ( 13 ) IT is to be observed that the counsel for the appellants has canvassed the view under consideration notwithstanding the over whelming authorities cited in apposition, primarily on the premise that the said authorities are not binding on this Court. We are not inclined to subscribe to the view of the counsel of the appellants. It is to be seen that the Full bench of the Punjab and Haryana High Court in Swift Formulations case (2004 CLC 745) (supra) has referred to and relied upon the case of Kirloskar Electric Company Limited, In re. (2003) 116 Comp. Cases 413 : (2003 AIR - kant HCR 2845) decided by this Court and again referred to in the impugned order. We affirm the view taken by the learned single judge in this regard. In our opinion, the majority of the members contemplated is a majority in number present and voting at the meeting. The majority is dual, in number and in value; a simple majority of those voting is sufficient, whereas the "three-fourths" requirement relates to value. ( 14 ) IN so far as the other incidental contentions of the appellants are concerned the same have been adequately addressed by the learned single Judge and are aptly decided, we do not find any infirmity in the reasoning thereto. Hence it is unnecessary to discuss the same at length. Accordingly the appeals stand dismissed. Appeals dismissed.