JUDGMENT BADAR DURREZ AHMED, J 1. In all these appeals the judgment dated 24.01.2006 delivered by the learned company Judge is under challenge. The appellants are aggrieved by the fact that the learned company Judge allowed the company petition No. 251/2002 filed on behalf of CRB Capital Markets Limited (the common respondent in all these appeals). CRB Capital Markets Limited (hereinafter referred to as ‘CRB Capital’) had filed the said company petition No. 251/2002 seeking sanction of a scheme under sections 391/392 of the Companies Act, 1956. That scheme of compromise and arrangement as put forth in the said company petition No. 251/2002 has been sanctioned by the learned company Judge, subject to certain modifications. In view of the fact that the scheme had been sanctioned, the winding up petition filed by the Reserve Bank of India (RBI) being C.P. No. 191/1997 under section 45MC(1)(d) of the Reserve Bank of India Act, 1934 (hereinafter referred to as the ‘RBI Act’) was, along with all other pending applications, ‘disposed of’. However, the learned company Judge directed that in case the Administrator reports that the scheme cannot be successfully implemented then the winding up petition filed by RBI would get revived and the company (CRB Capital) would be liable to be wound up. 2. The appellants in these four appeals are the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), Gujarat Industrial Investment Corporation Limited (GIIC) and Malanpur Steel Limited (earlier known as Hindustan Development Corporation Limited). All the appellants, including the Official Liquidator, had objected to the scheme. However, the learned company Judge sanctioned the scheme with certain modifications primarily because the learned company Judge felt that the public interest would be met inasmuch as the small depositors would be paid. However, the appellants feel that the scheme as propounded and sanctioned is contrary to public interest as also contrary to statutory provisions and is opposed to public policy. In fact, the learned counsel for the RBI had submitted that during the pendency of a winding up petition filed by the RBI under section 45MC(1)(d) of the RBI Act no scheme under sections 391/392 of the Companies Act could, at all, have been entertained by the company court. Background facts: 3. We shall examine the submissions of the parties but, before we do that, it would be necessary to set out the sequence of events. Background facts: 3. We shall examine the submissions of the parties but, before we do that, it would be necessary to set out the sequence of events. According to the RBI, CRB capital was originally incorporated on 16.05.1985 as CRB Consultancy Private Limited which got converted into a public limited company on 04.03.1991 and the name was changed to its present form (CRB Capital Markets Limited) on 18.11.1991. CRB capital is a Non-Banking Financial Company (NBFC). Consequently, it would be, inter alia, governed by the provisions set out in Chapter IIIB of the RBI Act. The chapter heading itself reads as under:- “Provisions relating to Non-Banking Institutions receiving deposits and Financial Institutions.” CRB Capital was provisionally classified as a loan company on 04.05.1993 and the classification status was changed to that of Equipment Leasing Company on 16.06.1993. 4. It is pointed out by the RBI that on 12.04.1993, based on the Shah Committee recommendations on the role of NBFCs a circular was issued to all the NBFCs advising them to get themselves registered with RBI if their net owned funds were more than Rs. 50 Lakhs. It is alleged that CRB Capital, although it had net owned funds of more than Rs. 50 Lakhs, did not apply for registration till the year 1996. CRB Capital made an application to RBI for registration only on 24.10.1996 and on receipt of the application RBI decided to inspect the company before registration. Inspections were carried out between November 13, 1996 and November 18, 1996 with reference to CRB Capital’s financial position as on 31.03.1996. However, the inspection extended to the Mumbai office of CRB Capital and therefore the inspection was completed in its entirety only in January 1997. 5. During the inspection, according to RBI, several illegalities and irregularities came to light. RBI had also received complaints from the Tourism Finance Corporation of India Limited regarding non-payment of deposits. Consequently, a show cause notice was issued by RBI to CRB Capital on 24.02.1997 as to why CRB Capital should not be prohibited from accepting deposits. A reply was submitted by CRB Capital. But, according to the RBI, the same was not found to be satisfactory. RBI also received information that CRB Capital was trying to mobilize further deposits by offering incentives etc. A reply was submitted by CRB Capital. But, according to the RBI, the same was not found to be satisfactory. RBI also received information that CRB Capital was trying to mobilize further deposits by offering incentives etc. Consequently, RBI issued a prohibitory order under Section 45K read with Section 45MB(1) and 45MB(2) of the RBI Act and served the same in the corporate office of CRB Capital on 09.04.1997. By virtue of the said order, RBI prohibited CRB Capital from accepting deposits with immediate effect and CRB Capital was also precluded from accepting deposits from any person in any form whether by way of fresh deposits or renewal or otherwise. Furthermore, RBI directed CRB Capital not to sell, transfer, create charge or mortgage or deal in any manner with its property and assets without prior written permission of RBI for a period of six months from the date of the order. Attention of CRB Capital was also drawn to the provisions of Section 58B(5) read with Section 58C of the RBI Act with regard to the liability of penalty in case there was any contravention of the order passed by the RBI. 6. It is also the case of RBI that it had received information from State Bank of India (SBI) through its letter dated 09.04.1997 regarding the alleged large scale misuse of the ‘at par’ discounting facility by CRB Capital. A complaint had been lodged by SBI with the Central Bureau of Investigation (CBI). A civil suit for recovery of an amount of Rs. 60 crore had also been filed. The CBI, after investigation had filed the charge-sheet in the competent court of law at Mumbai and the case is pending trial. 7. It is further the case of RBI that CRB Capital made a representation for the lifting of the prohibitory order. RBI, however, decided not to rescind the order passed under Section 45MB(1) and advised CRB Capital to propose a plan delineating the maturity profile of the existing deposits and proposed source of funds to re-pay the same. RBI also sent a letter dated 26.04.1997 requiring CRB Capital to submit a schedule of assets which could be used for discharging its obligations and liabilities. According to RBI, the reply submitted by CRB Capital made no mention of its assets and only spoke of its liability. 8. RBI also sent a letter dated 26.04.1997 requiring CRB Capital to submit a schedule of assets which could be used for discharging its obligations and liabilities. According to RBI, the reply submitted by CRB Capital made no mention of its assets and only spoke of its liability. 8. According to RBI, CRB Capital was also advised to prepare a plan indicating the month-wise maturity pattern of public deposits, month-wise cash flow as also sale of assets (if any) for the purpose of re-payment of deposits by virtue of a letter dated 15.05.1997. CRB Capital did not respond to the said letter. It is also alleged that the efforts of the RBI to contact the Managing Director / Directors and Officers of CRB Capital were in vain. And that, all the offices of CRB Capital remained closed since 1997. It is further alleged that the Chairman of CRB Capital (C.R. Bansali) was not traceable and no other official of the company was available. Two of the Directors had informed RBI that they had resigned from the board of directors of the company with effect from 06.03.1997. In the meanwhile, RBI had also allegedly received a complaint from the Government of Gujarat informing it that a number of co-operative banks in the State of Gujarat had placed funds aggregating Rs. 50 crores with CRB Capital and they had received a severe jolt because of the non-payment of those deposits. That complaint was contained in a letter dated 09.05.1997. 9. It is alleged that in these circumstances, RBI was satisfied that the continuance of CRB Capital, a Non-Banking Financial Company, was detrimental to public interest and also detrimental to the interest of depositors of the company. Consequently, RBI decided to apply for winding up of CRB Capital by invoking the provisions of Section 45MC(1)(d) of the RBI Act. Accordingly, company petition No. 191/1997 was filed before the learned company Judge in this court. 10. On 22.05.1997 when the said company petition No. 191/1997 came up for hearing before the learned company Judge, notice was issued to the respondent to show cause as to why the petition be not admitted. Accordingly, company petition No. 191/1997 was filed before the learned company Judge in this court. 10. On 22.05.1997 when the said company petition No. 191/1997 came up for hearing before the learned company Judge, notice was issued to the respondent to show cause as to why the petition be not admitted. In C.A. No. 552/1997, which was filed along with the said company petition, the learned company Judge noted that he was satisfied that there were sufficient grounds for the appointment of a Provisional Liquidator and consequently the Official Liquidator attached to the company court was appointed as a Provisional Liquidator and he was directed to take charge of all the assets and properties of the company along with books of accounts and other records of the company. It was also directed that till the next date, CRB Capital, its directors, servants and agents be restrained from disposing of, alienating and/or parting with possession of any of the assets of the CRB Capital. 11. It is submitted on behalf of RBI that in terms of the orders passed by the company court, the Provisional Liquidator had sealed all the premises of CRB Capital and had taken possession of the available assets and that the Provisional Liquidator had so far been able to recover an amount of Rs. 17.58 crore as on 30.09.2002 which was lying deposited with the Provisional Liquidator. .12. We may also point out that, in the meanwhile, an application had been filed by RBI before the company court seeking permission to file a criminal complaint against CRB Capital and its Board of Directors. The company court granted the permission and thereafter RBI filed a criminal complaint case No. 288/1/2000 on 02.06.2000 under Section 58E(1) read with Section 58B(5) and 58C of RBI Act. The said criminal case is pending before the Metropolitan Magistrate, New Delhi. 13. While proceedings in the winding up petition (company petition No. 191/1997) filed by RBI, were going on, CRB Capital filed an application being C.A. No. 1416/1998 in the said company petition seeking approval for the scheme of re-arrangement formulated by them. By an order dated 23.02.2002, the company court directed the consideration of the scheme propounded by CRB Capital by the creditors of the company. By an order dated 23.02.2002, the company court directed the consideration of the scheme propounded by CRB Capital by the creditors of the company. Pending consideration of the scheme, the company court had also directed that no further step including publication be taken pursuant to the admission of the company petition No. 191/1997. The company court also directed the scheme to be considered by the secured creditors, unsecured creditors and shareholders of CRB Capital and, accordingly, meetings were held. A modified scheme of compromise and an arrangement was filed by CRB Capital for approval of the company court. On 01.07.2002 a meeting of the secured creditors was held. It was attended by 28 secured creditors. On 02.07.2002 a meeting of unsecured creditors was held at Talkatora Stadium and out of the 1,34,000 depositors, 14,461 attended the meeting either personally or through proxy. 14. Thereafter, CRB Capital filed the modified scheme, approved in the meetings, before the company court and sought sanction of the same. The same was numbered as company petition No. 251/2002. RBI filed detailed objections to the scheme. The scheme was also objected to by the Official Liquidator, CBI, SEBI as also Malanpur Steel Limited and GIIC. We feel that it would be appropriate at this juncture itself to set out the relevant provisions of the said modified scheme. With regard to unsecured creditors the scheme entailed as under:- “(A) DEPOSIT & BOND HOLDERS i) DEPOSIT/BOND HOLDERS UPTO `. 5,000/- Payment equivalent to 100% of the deposit to deposit holders/Bond holders who have invested upto `. 5,000/- and to widows/retired Govt. servants/disabled/persons above 65 years not exceeding `. 10 crores, in aggregate, shall be made within one year from the date of sanctioning of the scheme of Arrangement/Compromise. ii) DEPOSITORS & BOND HOLDERS ABOVE `. 5,000/- a) The Payment equivalent to 50% of the principal amount deposited/invested shall be made in 5 equal yearly instalments commencing immediately upon expiry of twelve months from the date of sanctioning of the scheme by the Hon’ble Delhi High Court. b) Payment equivalent to balance 50% of the principal amount deposited/invested shall be discharged in the form of allotment of shares of CRB Capital Markets Ltd of `. 10/-each at par immediately upon receipt of approval from the competent authority. b) Payment equivalent to balance 50% of the principal amount deposited/invested shall be discharged in the form of allotment of shares of CRB Capital Markets Ltd of `. 10/-each at par immediately upon receipt of approval from the competent authority. Considering the fact that the depositors of the various Co-Operative Banks are small and needy, payment to the Co- Operative Banks shall be made as follows: i) Payment equivalent to 25% of the principal amount shall be made within 3 months form (sic) the date of sanctioning of the scheme of Arrangemnet/Compromise by the Hon’ble Delhi High Court. ii) Payment of balance 75% of the principal amount shall be made in 16 equal quarterly instalments commencing from the month following the expiry of six months from the date of sanction of the scheme of Arrangemnt/Compromise by the Hon’ble Delhi High Court. iii) In view of the fact that two of the Co- Operative Banks namely The Gozaria Nagrik Sahkari Bank Ltd. and Boriavi Peoples Co-Operative Bank Ltd. Who have been declared as “weak Banks” by their Apex Body, payment shall be made to the said Banks as follows: a) Payment equivalent to 25% of the principal amount shall be made within 3 month from the date of sanctioning of the scheme by the Hon’ble Delhi High Court. b) Payment of balance 75% of the principal amount shall be made in eight equal quarterly instalment commencing from the month following the expiry of six months from the date of sanctioning of the scheme of Arrangement / Compromise by Hon’ble Delhi High Court. STATE BANK OF INDIA (Unsecured Creditor) Since the charge over the securities held by State Bank of India have not been registered with the Register of Companies, State Bank of India is considered as an unsecured creditor. All the assets whether moveable or immovable held by the State Bank of India except asset owned by CRB Corporation Ltd. shall be liquidated by the Bank in private negotiations in consultation with the propounder of the scheme for recovery of the principal amount. Any shortfall and/or deficiency in discharge of the dues of the Bank against recovery from the various assets held by SBI, the same shall be paid and/or discharged by the company at par in terms of the payment of schedule as applicable to other unsecured creditors. Any shortfall and/or deficiency in discharge of the dues of the Bank against recovery from the various assets held by SBI, the same shall be paid and/or discharged by the company at par in terms of the payment of schedule as applicable to other unsecured creditors. No interest, however, shall be payable to the Bank on the principal amount determined. OTHER UNSECURED CREDITORS i) Payment equivalent to 50% of the principal amount shall be made in 5 equal yearly instalments commencing immediately upon expiry of 12 months from the date of Sanction of the scheme by the Hon’ble Delhi High Court. ii) Payment equivalent to balance 50% of the principal amount shall be discharged in the form of allotment of shares of CRB Capital Markets Ltd. at the rate of `. 10/- each at par immediately upon receipt of approval from the competent authority. FURTHER RESOLVED THAT upon sanction of the scheme of Arangement by the Hon’ble High Court as modified in terms contained herein above, all cases whether civil or criminal pending before any Court/Tribunnal/Authority shall be kept in abeyance and shall be withdrawn simultaneously upon receipt of last instalment of the dues by the Creditors in terms of the above schedule of payment. FURTHER RESOLVED THAT the original scheme filed by the propounder of the scheme shall be suitably modified to the extent indicated above.” Importantly, for a “fair and proper” implementation of the modified scheme of compromise or arrangement, the propounder of the scheme sought certain concessions and reliefs for approval by the company court. The reliefs and concessions which were sought were set out in part Chapter IV of the modified scheme. The reliefs and concessions which were sought were set out in part Chapter IV of the modified scheme. The same were as under:- “PART IV RELIEF AND CONCESSIONS SOUGHT BY THE PROPOUNDER OF THE SCHEME FOR REVIVAL OF THE COMPANY For a fair and proper implementation of the modified scheme of Compromise and or Arrangements as passed by the Secured Creditors, Unsecured Creditors and Shareholders of the company, the Propounder of the scheme has sought certain concessions and relief for approval by this Hon’ble Court having regard to the fact that the Company has been out of business for a period of about 5 years and for the reason of the business activities of not only the Company but all its Group Companies came to a grinding halt on account of prohibitory order issued by the Reserve Bank of India on 9/4/1997 and the appointed of Official Liquidator as Provisional Liquidator of the Company. RELIEF AND CONCESSIONS SOUGHT 1. The orders passed by this Hon’ble Court restraining the Company as well as other Group Companies from disposing of their assets and properties particularly the order passed on 4/11/97 in CA No. 1536/97 in C.P. No. 191/97 and for freezing the Bank accounts of these Companies be vacated. 2. The Official Liquidator be directed to hand over the Books of Accounts, records documents, assets & properties of the Company as well as the other Group Companies including the Cash balance lying with him and / or deposited in any Bank to the Propounder of the Scheme. 3. SEBI & Stock Exchanges (a) The Registrations and Licences, granted by Securities and Exchange Board of India (SEBI) for carrying out different activities by the Company and other Group Companies, which were suspended as a consequence to the appointment of Provisional Liquidator by this Hon’ble Court be restored and SEBI and the Stock exchanges where the shares of the Company as well its Group Companies were listed be directed to revoke its various orders passed u/s 11B of Securities and Exchange Board of India Act (SEBI Act) and or any other provisions of SEBI Act and other Laws, Regulations, & bye-laws of SEBI and Stock Exchanges. The details of such Registrations and Licences given to the Company and its Group Companies are as under:- i) Category-I Merchant Banking Registration granted by SEBI to the Company. The details of such Registrations and Licences given to the Company and its Group Companies are as under:- i) Category-I Merchant Banking Registration granted by SEBI to the Company. ii) Registration Certificate granted to the Company by SEBI for setting up Mutual Fund. iii) Registration Certificate granted by SEBI to CRB Shares Custodian Services Ltd to act as Registrar and Share Transfer Agent and as Debenture Trustee. iv) Registration Certificate granted by SEBI to CRB Share Broking Ltd to act as Corporate Member of Mumbai Stock Exchange and OTCEI. v) Revocation of suspension orders for trading in shares of the Company as well as its other Group Companies in all Stock Exchange. vi) Revocation of suspension order passed by SEBI and other Stock Exchanges suspending their membership rights of the ex-Directors of the Company and to allowed them to resume security treading business at Stock Exchanges. vii) Stock Exchanges to hand over the share certificates along with Transter Deeds which have been received by them as “bad delivery” with the directions to resubmit these Shares Certificates along with rectified Transfer Deeds. b) SEBI & Stock Exchanges be directed to give its approval for issue of fresh shares to the unsecured Creditors (including Deposit holders) by way of preferential allotment as envisaged in the scheme under its relevant guidelines and such shares be listed at various Exchanges. 4. The Companies which have withheld shares lodged for transfer by the Company and its Group Companies be directed to register the transfer of such shares in favour of the Company and its Group Companies as the case may be and deliver the same to them. RESERVE BANK OF INDIA (i) All the Bank accounts of the Company as well as its Group Companies and its ex-Directors & Officers which have been freezed be defreezed and Reserve Bank of India be directed to give necessary instructions to the Banks for making such accounts operative. (ii) Reserve Bank of India be directed to revoke its prohibitory orders passed u/s 45K(4) read with section 45MB(1) of RBI Act 1934. (iii) Reserve Bank of India be directed to accept the Application for Registration as NBFC u/s 45(1A) of Reserve Bank of India Act, 1934 on being filed by the Company. (ii) Reserve Bank of India be directed to revoke its prohibitory orders passed u/s 45K(4) read with section 45MB(1) of RBI Act 1934. (iii) Reserve Bank of India be directed to accept the Application for Registration as NBFC u/s 45(1A) of Reserve Bank of India Act, 1934 on being filed by the Company. (iv) Reserve Bank of India be directed to restore its suspension order against “in principal approval” for setting up CRB Global Bank Ltd. (v) Reserve Bank of India be directed to restore the Licences granted to the Company to act as authorized dealer in foreign exchange. 5. Trust petition No.3 filed by SEBI before the Hon’ble Mumbai High Court be transferred to this Hon’ble Court and after such transfer the assets, books of accounts, records etc of CRB Asset Management Company Ltd, CRB Trustee Limited and CRB Mutual Fund Ltd. be handed over to the Propounder of the Scheme. 6. INCOME TAX AUTHORITIES The Income-tax Department be directed to stay the demands and vacate the ex-parte orders and to allow the Company to file Appeal/s. Revision Applications and any other proceedings before the appropriate authorities and or Court and any delay in filing such proceedings be condoned and interest & penalties be waived. 7. CIVIL/CRIMINAL CASES All the cases, civil as well as criminal, filed against the Company, its ex-Directors & Officers, particularly the following cases filed against the Company and its Directors be vacated or stayed sine-die. Details of such cases, inter-alia, are as under: a) All the Complaint cases filed u/s 138 of Negotiable Instruments Act against the Company and its Directors and/or its Officers. b) Case No. 42/97 filed by CBI in Session Court at Mumbai on the Complaint of State Bank of India against the Directors and Officers of the Company. c) Case No. 1/98 filed by CBI in Session Court at Mumbai on complaint of Bank of Baroda against the Directors and Officers of the Company. d) Complaint case No. 37/97 registered by G.B.C.B. CID Mumbai in the Court of Metropolitan Magistrate, Esplanade Court at the Mumbai on complaint of Depositors. e) Complaint case No. 253/97 registered by CID Pune on the complaint of Govind Warran Paranjape and other depositors. f) Complaint case No. 6/97 filed by CID, Gandhinagar, Ahmedabad on Complaint of Jaitaram Hathi Bhai Choudhary on behalf of Mansa Cooperative Bank and others before the Metropolitan Magistrate Court, Ahmedabad. e) Complaint case No. 253/97 registered by CID Pune on the complaint of Govind Warran Paranjape and other depositors. f) Complaint case No. 6/97 filed by CID, Gandhinagar, Ahmedabad on Complaint of Jaitaram Hathi Bhai Choudhary on behalf of Mansa Cooperative Bank and others before the Metropolitan Magistrate Court, Ahmedabad. g) Complaint Case No. 1-82/97registered by Sangamner Sahar Police Station Sangamner on the complaint of Dr Rajendra Kedarnath Malpani and pending before Court at Sangamner. h) Complaint case No. 288/1/2000 filed by Reserve Bank of India in the Colurt of Metropolitan Magistrate, New Delhi against the Company and its Directors. i) All other cases civl or criminal filed by any depositor or any other institution or person against the company and/or its Directors and pending before any Court in India. j) All the cases filed by Provident Fund, Sales Tax, ESI and any other authorities against the Company and its Directors be stayed. k) Any other proceedings filed in any Court in India by any persom, Company and or Institutions including Public Interest Litigation, cases filed by GHC Ahmedabad etc. be vacated or stayed sine-die. 8. All the cases filed by the Company in various Courts for recovery of dues including Complaint cases against Debtors filed u/s 138 of Negotiable Instruments Act before the appointment of Provisional Liquidator by the Hon’ble Court be transferred to the jurisdiction of this Hon’ble Court and the various Courts where such cases are pending be directed to restore such cases before transfer in the event any such cases have been dismissed for any reasons including for nonappearance by the Provisional Liquidator. 9. CBI (i) Necessary directions be given to CBI to release the passports of Propounder of the Scheme and ex-Directors of the Company so as to enable the Company to resume dialogue with the Joint Venture collaborators in Mutual Fund and Security trading business and re-establish these collaborations. (ii) Necessary directions be given to CBI to hand over all the records and documents of the Company as well as its Group companies including records of Fixed Deposits etc. 10. All the cases filed by the Official Liquidator before this Hon’ble Court for recovery of dues from the debtors and other parties be decided and decrees passed. 11. (ii) Necessary directions be given to CBI to hand over all the records and documents of the Company as well as its Group companies including records of Fixed Deposits etc. 10. All the cases filed by the Official Liquidator before this Hon’ble Court for recovery of dues from the debtors and other parties be decided and decrees passed. 11. The liabilities in respect of employees of the Company as well as its Group Companies be limited to their dues upto 21.5.97 and the services of the employees be treated as terminated on payment of their terminal benefits and arrears or dues if any upto the said date. 12. The following companies with whom the Company had entered into bought out deals be directed to pay the amounts due from them along with accrued interest till the date of payment - Board of Directors of the above mentioned companies. 13. State Bank of India be directed to hand over various assets and properties in respect of which charge has not been created in ROC. 14. The Leased premises held by the Company prior to the Order dated 22/5/97 passed in CP No.191/97 be permitted to be released to the respective Landlords after paying the rent due to them till 22/5/97 subject to the Landlords depositing the security amount, if any deposited with them by the Company at the inception of tenancy. The rent for the period subsequent to 22/5/97 may kindly be waived. 15. The Propounder of the Scheme / Company be permitted to diversify the activities of the Company in other fields such as Infotech, Media, Biotech and any other activities and the Registrar of the Companies be directed to register alterations in the main object clause of the Memorandum of Association after filing of such resolutions passed by the Shareholders of the Company. 16. The Propounder of the scheme be permitted to raise his share of contribution to the modified scheme of Arrangement / Compromise by utilizing the funds which were lying in any Bank accounts in the account of the Propounder of the scheme, his family members and by liquidating the shares, securities or any other assets and necessary directions be given to the Banks allowing operation of the accounts to the Companies, allowing transfer of shares, securities etc. and to the Stock Exchanges for accepting such shares, securities etc. and to the Stock Exchanges for accepting such shares, securities etc. and the proceeds from such sales be permitted to use as Propounder’s contribution to the scheme. 17. All the personal guarantees executed by the Directors of the Company to the Banks, Institutions and other parties be discharged. 18. The Bank accounts of various companies / firms which had dealings with the Company in the ordinary course of business be defreezed.” Before the learned company Judge, RBI, SEBI, the Official Liquidator, Malanpur Steel Limited and GIIC had objected to the scheme, the main objector being the RBI. The RBI had contended that once an application under section 45MC(1)(d) of the RBI Act had been admitted it is only in extraordinary circumstances that an order of winding up ought not to be passed. And, that no such circumstances have been shown to exist by CRB Capital. It was also contended that during the pendency of a winding up petition under section 45MC(1)(d) of the RBI Act no scheme under sections 391/392 of the Companies Act could be propounded or considered. It was urged that CRB Capital had lost its substratum and deserved to be wound up and that winding up would be in the interest of depositors as also in general public interest. It was also urged by RBI that the scheme was contrary to statutory provisions and as such approval ought not to be granted as that would be opposed to law as also public policy. A similar set of objections was made by the other objectors. 15. On behalf of CRB Capital it was submitted before the learned company Judge that the secured creditors, unsecured creditors and shareholders had accepted the modified scheme by an overwhelming 3/4ths majority in value as well as by simple majority. It was submitted that winding up of a company is a step which results in the civil death of the company and would be contrary to public interest as lakhs of depositors and shareholders all over the country would find that their funds and investments have dissipated. It was submitted that winding up of a company is a step which results in the civil death of the company and would be contrary to public interest as lakhs of depositors and shareholders all over the country would find that their funds and investments have dissipated. It was contended that RBI, while balancing the general public interest, has also to take into account the interest of the Bank and financial institutions as well as secured and unsecured creditors and that revival of a financial company ought not to be objected to merely because of certain alleged irregularities inasmuch as the implication of closure of a company not only has an impact on the financial institution and its customers but also on the future of the financial services in that region. It was also contended that section 45MC(1)(d) of RBI Act is akin to section 433(1)(f) of the Companies Act and therefore the winding up of a company should be ordered only in the rarest of rare case as it amounts to the civil death of a financial company and that the filing of a petition for winding up should not be resorted to as a matter of right. 16. RBI had also urged that the resolution of creditors of a scheme of arrangement could not annul statutory provisions nor could it take away the statutory powers of RBI under the RBI Act and therefore the scheme ought not to be accepted/sanctioned by the court. It was also urged that the scheme contained multiple reliefs and concessions which had been sought, the effect of which would be the taking away of statutory powers not only of RBI but also of other statutory bodies. That would be contrary to law. 17. From the impugned judgment dated 24.01.2006, we find that the learned company Judge was of the view that public interest inherent in the scheme was evident from the fact that it seeks to benefit 1,34,000 deposit holders and about 36 co-operative banks and that many of the deposit holders were retired government personnel and senior citizens including widows and several other similarly situated deposit holders who were needy and depending on recurring income from the deposits made with CRB Capital. According to the learned company Judge the scheme contemplated a recovery plan for recovering arrears of dues, hire-purchase installments, loans and advances, reorganisation of share capital of the company by issuing shares of Rs. 10/- each at par with discharge of the dues of unsecured creditors including deposit holders and bond holders and engagement in non-fund based business activity The scheme also contemplated diversification of company business in areas such as information and technology, bio-tech and the growing market of media. The learned company Judge also noted that the scheme involved induction of funds by the propounders of the scheme to the extent of Rs. 10 crore. Although the scheme as propounded contemplated payment of 100% of the deposit to the deposit holders who had invested up to Rs. 5000/-, there was a cap put on it to the extent of Rs. 10 crore to be paid within the year. The learned company Judge, however, felt that the upper limit of Rs. 10 crore for such depositors was not in public interest. Consequently, he directed that the limit of Rs. 10 crore to the payment of deposits up to Rs. 5000/- be removed and the scheme was modified to that extent. It was also modified by directing that widows, disabled persons, retired government servants and persons above 55 years of age would get the entire deposit re-paid without any limit within one year after the sanction of the scheme. Insofar as the other unsecured creditors were concerned such as the deposit holders and bond holders above the value of Rs. 5000/-, they were to be paid an amount equivalent to 50% of the principal amount in five annual installments commencing from the date of sanctioning of the scheme and the balance 50% of the principal amount was to be discharged in the form of allotment of shares of CRB Capital of Rs. 10/- each at par as soon as the approvals from the competent authority (SEBI) were received. 18. Finally, the learned company Judge felt that there was inherent public interest in the scheme and sanctioned the same as under:- “49. I am, therefore, of the view that the following factors indicate the public interest inherent in the sanction of the scheme:- (a) The payment to small depositors under the scheme upto Rs. 18. Finally, the learned company Judge felt that there was inherent public interest in the scheme and sanctioned the same as under:- “49. I am, therefore, of the view that the following factors indicate the public interest inherent in the sanction of the scheme:- (a) The payment to small depositors under the scheme upto Rs. 5,000/- in toto within 9 months as per the modified period of one year to 9 months by this Court. (b) Payments in full to the weaker sections of society such as widows, government servants, disabled and senior citizens within one year of the sanctioning of the scheme. (c) 50% cash payment of the principal to even the unsecured creditors in 4 yearly instalments as per the scheme modified by this Court and the securing of balance by allotment of shares in their favour. (d) The approval of the scheme of the shareholders, creditors (secured) and unsecured, by the majority stipulated in Section 391 of the Act. (e) The benefit which is to accrue to 1,34,000 small deposit holders. (f) The benefit accruing to 36 co-operative Banks. (g) The fact that already Rs.17 crores have been realized and deposited in the accounts of the company in a nationalized bank during the pendency of this petition in this Court and realization of substantial interest on such Fixed Deposits of Rs.17 crores. xxxx xxxx xxxx xxxx 52. Accordingly, while approving the scheme it is necessary to given the following directions for supervision and modification of the scheme:- (I) The condition with regard to the Deposit/Bond holders upto Rs. 5,000/- is modified and the term for repayment is thus reduced from the period of one year to a period of 9 months. Further the words "not exceeding Rs.10 crores in aggregate" is deleted as such a limit may hurt the small depositors. Furthermore, the scheme is modified and widows, retired government servants, disabled persons and senior citizens above 65 years shall be paid their entire principal amount deposited within one year from the date of sanctioning of the scheme. (II) With regard to the unsecured creditors including deposit and bond holders above Rs. Furthermore, the scheme is modified and widows, retired government servants, disabled persons and senior citizens above 65 years shall be paid their entire principal amount deposited within one year from the date of sanctioning of the scheme. (II) With regard to the unsecured creditors including deposit and bond holders above Rs. 5000/-, (except the categories of widows, retired government servants and persons above 65 years) whose period of repayment as per the scheme is 5 annual equal instalments commencing from 12 months from the date of sanction of the scheme is modified and now reduced to 4 annual equal instalments constituting 50% of the principal amount beginning from the expiry of 12 months from the date of sanction of the scheme. (III) With regard to the relief and concession sought in part IV of the scheme under the heading Reserve Bank of India i.e. (i) to (v) from the Reserve Bank of India the petitioners have during the course of hearing given up the reliefs / concessions sought in clauses (ii) to (v) under the heading Reserve Bank of India and are not been pressed and accordingly the said clauses (ii) to (v) shall stand deleted from the Scheme. In so far as relief (i) is concerned directions have already been given in para 37 above. (IV) As regard para 5 of part IV of the scheme which related to the Trust Petition filed by SEBI before the Bombay High Court it is contended by the parties that Trust Petition No.3 filed by SEBI before the Hon’ble Mumbai High Court is presently pending before the Supreme Court of India for transferring the same and accordingly the said para 5 shall stand deleted from the scheme. xxxx xxxx xxxx xxx (VI) That the propounder of this scheme shall within 15 days from the date of sanction of the scheme file an affidavit in the Court accepting the modifications made to the scheme in this order and undertaking to be bound by the same. xxxx xxxx xxxx xxx (VI) That the propounder of this scheme shall within 15 days from the date of sanction of the scheme file an affidavit in the Court accepting the modifications made to the scheme in this order and undertaking to be bound by the same. (VII) The propounder shall also file the projected balance sheet for five years from the cut-off date annexure-A and the projected fund for statement 5 years from the cut-off date Annexure-B in view of the modifications made in this judgment.” The learned company Judge ordered as under:- “a. The company petition No.251 of 2002 along with Company application No.1416 of 1998 is allowed subject to the terms and conditions mentioned above. b. The scheme of compromise and arrangement as put forth in company petition No.251 of 2002 along with Company application No.1416 of 1998 is sanctioned subject to the above modifications / orders so as to be binding on the petitioner / company and its members creditors. c. In view of the fact that the scheme has been sanctioned subject to the above modifications / orders as above, the winding up petition No. C.P.No.191/1997 filed by RBI against the company along with all other pending application shall stand disposed of accordingly. However, if the administrator reports that the scheme cannot be successfully implemented, then the winding up petition shall revive and the company would be liable to be wound up. d. The petitioner shall file a certified copy of this order with the Registrar of Companies, Delhi Punjab & Haryana within 30 days of the date of the receipt of the order. e. The office is directed to draw up the order in the prescribed form by incorporating the modifications postulated as per this judgment.” 19. Initially these appeals were heard by a Division Bench of this Court and the same were disposed of by a judgment and/or order dated 29.02.2008. The Division Bench set aside the impugned judgment dated 24.01.2006 and remanded the matter to the company court for a fresh disposal in the following manner:- “We accordingly set aside the impugned order passed by the Company Court and remit the matter back for a fresh disposal in accordance with law after addressing in particular following, among other, issues if any raised before it. i) Whether a scheme under Section 391-392 of the Companies Act is maintainable in a winding up petition filed by the RBI under Section 45 MC(1) of the RBI Act? ii) Whether a scheme under Sections 391-392 of the Companies Act could set aside quasi judicial orders passed by a statutory authority like the SEBI constituted under the Securities and Exchange Board of India Act, 1992? iii) Whether criminal and income tax proceedings pending against the company and its Directors could be stayed by the Company Court while sanctioning a scheme under Section 391-392 of the Companies Act? iv) Depending upon the answers of questions 1 to 4 above whether the scheme formulated in the instant case is bonafide, feasible and fair? v) Whether grounds for winding up of the company under Section 45 MC (1) of the RBI as made out in the winding up petition exist. If so, to what effect?” 20. Being aggrieved by the said order dated 29.02.2008 passed by the said Division Bench in the said appeals, CRB Capital preferred Special Leave Petitions before the Supreme Court which got converted into Civil Appeal Nos. 2733-2736/2009 (CRB Capital Markets Limited v. Reserve Bank of India & Ors.). Those civil appeals were disposed of by the Supreme Court by an order dated 22.04.2009 in the following manner:- “23. We are, accordingly, of the view that since the Division Bench has not considered on merits the findings of the Company Judge, it would be in the fitness of things for the Division Bench itself to consider all the points, including those which had not been considered by the Company Judge, as raised at the time of hearing of the Appeals, and decide the same. 24. We, accordingly, allow the Appeals and set aside the order of the Division Bench impugned therein and direct the Division Bench of the Delhi High Court to rehear the Appeals, out of which the order impugned in these appeals arise, on all questions which had been raised before the Company Judge and the Division Bench and also as formulated by the Division Bench, in accordance with law within six months from the date of communication of this Order. During the pendency of the appeals, the order of the learned Single Judge dated 24th January, 2008, shall remain stayed.” 21. During the pendency of the appeals, the order of the learned Single Judge dated 24th January, 2008, shall remain stayed.” 21. That is how the matter is once again before a Division Bench of this court. Q.1 Whether a scheme under Section 391-392 of the Companies Act is maintainable in a winding up petition filed by the Reserve Bank of India under Section 45MC(1) of the Reserve Bank of India Act, 1934? The first question which we have to examine is whether an application for sanctioning a scheme under sections 391/392 of the Companies Act is maintainable in a winding up petition filed by Reserve Bank of India under section 45 MC(1) of the RBI Act. Mr Parag Tripathi, appearing on behalf of the RBI submitted that CRB Capital was a defaulting NBFC and as a consequence was liable to be wound up under Section 45MC of the RBI Act. He further submitted that Chapter III B of the RBI Act was specially introduced to control NBFCs and to deal with defaulting NBFCs when they committed defaults or violations. It was also contended that by virtue of Section 45Q, the provisions of Chapter III B would override all other laws including the Companies Act. It was, therefore, contended that when RBI had filed the winding up petition alleging serious defaults on the part of CRB Capital, the company Judge ought to have considered the winding up petition on merits and that sanctioning of a scheme without considering the winding up petition on merits was unsustainable. It was also submitted that the scheme propounded by CRB Capital and sanctioned by the learned company Judge with certain modifications is contrary to the provisions of Chapter III B of the RBI Act and therefore the same cannot be sustained in law. It was also submitted that the learned company Judge was only impressed by the fact that the majority of creditors (secured and unsecured) and shareholders had passed the scheme and therefore the same ought to be sanctioned. The learned counsel referred to the decision of the Supreme Court in the case of Miheer H Mafatlal v. Mafatlal Industries Limited: (1997) 1 SCC 579 , wherein, according to the learned counsel, the Supreme Court held that a scheme could not be sanctioned if it violated any law. The learned counsel referred to the decision of the Supreme Court in the case of Miheer H Mafatlal v. Mafatlal Industries Limited: (1997) 1 SCC 579 , wherein, according to the learned counsel, the Supreme Court held that a scheme could not be sanctioned if it violated any law. According to the learned counsel, the Supreme Court also held that the court sanctioning a scheme had to consider the pros and cons of the scheme with a view to finding out whether it was fair, just and reasonable and was not contrary to any provisions of law and did not violate any public policy. It was also contended that the concessions sought by CRB Capital were contrary to the statutory provisions and could not be granted in law. It was submitted that in the absence of such concessions the scheme was not workable. Importantly, the learned counsel for RBI drew our attention to the fact that the proposal to discharge part of the liability towards the depositors by issuance of shares of the very same company in liquidation was unacceptable. 22. The learned counsel also sought to distinguish the decision of the Karnataka High Court in the case of In Re: Maharashtra Apex Corporation Limited: (2005) 124 Company Cases 637 (Karnataka) by submitting that in that case no winding up petition had been filed by RBI under Section 45MC and the question of non-application of section 391 of the Companies Act in a winding up petition under section 45MC of the RBI Act did not at all arise. Therefore, the reliance placed by the company Judge on the said decision of Karnataka High Court was misplaced. It was submitted that in any event the Supreme Court decision in Miheer H Mafatlal (supra) made it clear that a scheme cannot be sanctioned if it violated any law. Mr Tripathi submitted that Section 45QA(1) provided that every deposit accepted by the NBFC shall be re-paid in accordance with the terms and conditions of the deposits. Thus, there was an absolute requirement of re-payment of the entire deposits in accordance with the terms and conditions of the deposits. It is only the Company Law Board, under section 45QA(2), which had jurisdiction to frame a scheme of re-payment in case an NBFC made a default in re-payment. Thus, there was an absolute requirement of re-payment of the entire deposits in accordance with the terms and conditions of the deposits. It is only the Company Law Board, under section 45QA(2), which had jurisdiction to frame a scheme of re-payment in case an NBFC made a default in re-payment. He submitted that section 58B(4)(AAA) provided for penalty in case of non-compliance of an order made by the Company Law Board under Section 45QA and this clearly implies that the provisions of section 45QA were mandatory and not directory. It was contended that a conjoint reading of Section 45QA(1), 45QA(2) and 58B4(AAA) made it incumbent upon an NBFC to re-pay the entire amount and these provisions make it clear that the liability is not merely a contractual liability but a statutory liability and therefore CRB Capital cannot be heard to submit that they had settled with the depositors for part-payment. 23. It was also submitted that any scheme under Section 391 of the Companies Act has to be in compliance with the provisions of Chapter III B which includes section 45QA of the RBI Act and a petition for winding up under Section 45MC(1)(d) of the RBI Act cannot be defeated by allowing a scheme under Section 391 of the Companies Act which is in violation of the statutory provision contained in Section 45QA of the RBI Act. 24. Mr Sudhanshu Batra appearing on behalf of CRB Capital submitted that there is no prohibition on considering a scheme under Sections 391/392 of the companies Act during the pendency of a winding up petition filed by RBI under Section 45MC of the RBI Act. In fact, according to him, Section 45MC(4) makes all the provisions of the Companies Act, 1956 “relating to winding up of a company” applicable to a winding-up proceeding initiated on the application made by RBI under Section 45MC of the RBI Act. He then submitted that Part VII of the Companies Act dealt with winding up. Chapter I thereof contained preliminary provisions dealing with modes of winding up and contributories. Chapter II of Part VII dealt with the cases of winding up by the Court/Tribunal. Section 433 which stipulated the circumstances in which a company could be wound up fell within this chapter. And, so did Section 446, which provided for stay of suit on the passing of a winding up order. Chapter II of Part VII dealt with the cases of winding up by the Court/Tribunal. Section 433 which stipulated the circumstances in which a company could be wound up fell within this chapter. And, so did Section 446, which provided for stay of suit on the passing of a winding up order. Section 446(2)(c), according to Mr Batra, empowered the Court/Tribunal, notwithstanding anything contained in any other law for the time being in force, to have jurisdiction to entertain or dispose of any application made under Section 391 by or in respect of the company. Therefore, according to Mr Batra, a scheme under Section 391 of the Companies Act can be entertained even in the case of a winding up proceeding under section 45MC of the RBI Act. He referred to the decision of the Supreme Court in the case of M/s Doypack Systems Pvt. Ltd. V. Union of India: (1988) 2 SCC 299 , in order to explain the meaning of the expression “in relation to”. According to him, the Supreme Court held that the said expression was one of expansion and not of contraction. He submitted that even in T.N. Kalyana Mandapam Assocation v. Union of India: (2004) 5 SCC 632 , the Supreme Court had recognized that the expression “in relation to” ought to be given an expansive or wide meaning and should not be construed narrowly. Consequently, Mr Batra, submitted that a scheme under Sections 391/392 could very well be considered by the company court even in a case of winding up under Section 45MC of the RBI Act inasmuch as Section 45MC(4) of the RBI Act itself makes it clear that all the provisions of the Companies Act “relating to” winding up of a company shall apply to a winding up proceeding initiated on the application made by RBI under Section 45MC of the RBI Act. With regard to the alternative arguments raised by Mr Parag Tripathi that even if it is assumed that a scheme under Section 391 can be maintained in the backdrop of a winding petition under Section 45MC of the RBI Act, such a scheme would not be maintainable if it was contrary to the provisions of Chapter III B of the RBI Act, the learned counsel for CRB Capital submitted that the scheme sanctioned by the learned company Judge was not contrary to the provisions of Chapter III B of the RBI Act. 25. It was also contended on behalf of CRB Capital that disbursements have been made to the depositors and other investors under the scheme and in terms of an order dated 15.12.2010 passed by this court in these appeals, as a result of which, unsecured creditors have been given priority over the dues of the secured creditors as provided under section 529A and 530 of the Companies Act, 1956. It was, therefore, contended that the clock cannot be put back when a large number of unsecured creditors have already been paid. JUDGMENT BADAR DURREZ AHMED, J 1. In all these appeals the judgment dated 24.01.2006 delivered by the learned company Judge is under challenge. The appellants are aggrieved by the fact that the learned company Judge allowed the company petition No. 251/2002 filed on behalf of CRB Capital Markets Limited (the common respondent in all these appeals). CRB Capital Markets Limited (hereinafter referred to as ‘CRB Capital’) had filed the said company petition No. 251/2002 seeking sanction of a scheme under sections 391/392 of the Companies Act, 1956. That scheme of compromise and arrangement as put forth in the said company petition No. 251/2002 has been sanctioned by the learned company Judge, subject to certain modifications. In view of the fact that the scheme had been sanctioned, the winding up petition filed by the Reserve Bank of India (RBI) being C.P. No. 191/1997 under section 45MC(1)(d) of the Reserve Bank of India Act, 1934 (hereinafter referred to as the ‘RBI Act’) was, along with all other pending applications, ‘disposed of’. However, the learned company Judge directed that in case the Administrator reports that the scheme cannot be successfully implemented then the winding up petition filed by RBI would get revived and the company (CRB Capital) would be liable to be wound up. 2. However, the learned company Judge directed that in case the Administrator reports that the scheme cannot be successfully implemented then the winding up petition filed by RBI would get revived and the company (CRB Capital) would be liable to be wound up. 2. The appellants in these four appeals are the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), Gujarat Industrial Investment Corporation Limited (GIIC) and Malanpur Steel Limited (earlier known as Hindustan Development Corporation Limited). All the appellants, including the Official Liquidator, had objected to the scheme. However, the learned company Judge sanctioned the scheme with certain modifications primarily because the learned company Judge felt that the public interest would be met inasmuch as the small depositors would be paid. However, the appellants feel that the scheme as propounded and sanctioned is contrary to public interest as also contrary to statutory provisions and is opposed to public policy. In fact, the learned counsel for the RBI had submitted that during the pendency of a winding up petition filed by the RBI under section 45MC(1)(d) of the RBI Act no scheme under sections 391/392 of the Companies Act could, at all, have been entertained by the company court. Background facts: 3. We shall examine the submissions of the parties but, before we do that, it would be necessary to set out the sequence of events. According to the RBI, CRB capital was originally incorporated on 16.05.1985 as CRB Consultancy Private Limited which got converted into a public limited company on 04.03.1991 and the name was changed to its present form (CRB Capital Markets Limited) on 18.11.1991. CRB capital is a Non-Banking Financial Company (NBFC). Consequently, it would be, inter alia, governed by the provisions set out in Chapter IIIB of the RBI Act. The chapter heading itself reads as under:- “Provisions relating to Non-Banking Institutions receiving deposits and Financial Institutions.” CRB Capital was provisionally classified as a loan company on 04.05.1993 and the classification status was changed to that of Equipment Leasing Company on 16.06.1993. 4. It is pointed out by the RBI that on 12.04.1993, based on the Shah Committee recommendations on the role of NBFCs a circular was issued to all the NBFCs advising them to get themselves registered with RBI if their net owned funds were more than Rs. 50 Lakhs. 4. It is pointed out by the RBI that on 12.04.1993, based on the Shah Committee recommendations on the role of NBFCs a circular was issued to all the NBFCs advising them to get themselves registered with RBI if their net owned funds were more than Rs. 50 Lakhs. It is alleged that CRB Capital, although it had net owned funds of more than Rs. 50 Lakhs, did not apply for registration till the year 1996. CRB Capital made an application to RBI for registration only on 24.10.1996 and on receipt of the application RBI decided to inspect the company before registration. Inspections were carried out between November 13, 1996 and November 18, 1996 with reference to CRB Capital’s financial position as on 31.03.1996. However, the inspection extended to the Mumbai office of CRB Capital and therefore the inspection was completed in its entirety only in January 1997. 5. During the inspection, according to RBI, several illegalities and irregularities came to light. RBI had also received complaints from the Tourism Finance Corporation of India Limited regarding non-payment of deposits. Consequently, a show cause notice was issued by RBI to CRB Capital on 24.02.1997 as to why CRB Capital should not be prohibited from accepting deposits. A reply was submitted by CRB Capital. But, according to the RBI, the same was not found to be satisfactory. RBI also received information that CRB Capital was trying to mobilize further deposits by offering incentives etc. Consequently, RBI issued a prohibitory order under Section 45K read with Section 45MB(1) and 45MB(2) of the RBI Act and served the same in the corporate office of CRB Capital on 09.04.1997. By virtue of the said order, RBI prohibited CRB Capital from accepting deposits with immediate effect and CRB Capital was also precluded from accepting deposits from any person in any form whether by way of fresh deposits or renewal or otherwise. Furthermore, RBI directed CRB Capital not to sell, transfer, create charge or mortgage or deal in any manner with its property and assets without prior written permission of RBI for a period of six months from the date of the order. Attention of CRB Capital was also drawn to the provisions of Section 58B(5) read with Section 58C of the RBI Act with regard to the liability of penalty in case there was any contravention of the order passed by the RBI. 6. Attention of CRB Capital was also drawn to the provisions of Section 58B(5) read with Section 58C of the RBI Act with regard to the liability of penalty in case there was any contravention of the order passed by the RBI. 6. It is also the case of RBI that it had received information from State Bank of India (SBI) through its letter dated 09.04.1997 regarding the alleged large scale misuse of the ‘at par’ discounting facility by CRB Capital. A complaint had been lodged by SBI with the Central Bureau of Investigation (CBI). A civil suit for recovery of an amount of Rs. 60 crore had also been filed. The CBI, after investigation had filed the charge-sheet in the competent court of law at Mumbai and the case is pending trial. 7. It is further the case of RBI that CRB Capital made a representation for the lifting of the prohibitory order. RBI, however, decided not to rescind the order passed under Section 45MB(1) and advised CRB Capital to propose a plan delineating the maturity profile of the existing deposits and proposed source of funds to re-pay the same. RBI also sent a letter dated 26.04.1997 requiring CRB Capital to submit a schedule of assets which could be used for discharging its obligations and liabilities. According to RBI, the reply submitted by CRB Capital made no mention of its assets and only spoke of its liability. 8. According to RBI, CRB Capital was also advised to prepare a plan indicating the month-wise maturity pattern of public deposits, month-wise cash flow as also sale of assets (if any) for the purpose of re-payment of deposits by virtue of a letter dated 15.05.1997. CRB Capital did not respond to the said letter. It is also alleged that the efforts of the RBI to contact the Managing Director / Directors and Officers of CRB Capital were in vain. And that, all the offices of CRB Capital remained closed since 1997. It is further alleged that the Chairman of CRB Capital (C.R. Bansali) was not traceable and no other official of the company was available. Two of the Directors had informed RBI that they had resigned from the board of directors of the company with effect from 06.03.1997. And that, all the offices of CRB Capital remained closed since 1997. It is further alleged that the Chairman of CRB Capital (C.R. Bansali) was not traceable and no other official of the company was available. Two of the Directors had informed RBI that they had resigned from the board of directors of the company with effect from 06.03.1997. In the meanwhile, RBI had also allegedly received a complaint from the Government of Gujarat informing it that a number of co-operative banks in the State of Gujarat had placed funds aggregating Rs. 50 crores with CRB Capital and they had received a severe jolt because of the non-payment of those deposits. That complaint was contained in a letter dated 09.05.1997. 9. It is alleged that in these circumstances, RBI was satisfied that the continuance of CRB Capital, a Non-Banking Financial Company, was detrimental to public interest and also detrimental to the interest of depositors of the company. Consequently, RBI decided to apply for winding up of CRB Capital by invoking the provisions of Section 45MC(1)(d) of the RBI Act. Accordingly, company petition No. 191/1997 was filed before the learned company Judge in this court. 10. On 22.05.1997 when the said company petition No. 191/1997 came up for hearing before the learned company Judge, notice was issued to the respondent to show cause as to why the petition be not admitted. In C.A. No. 552/1997, which was filed along with the said company petition, the learned company Judge noted that he was satisfied that there were sufficient grounds for the appointment of a Provisional Liquidator and consequently the Official Liquidator attached to the company court was appointed as a Provisional Liquidator and he was directed to take charge of all the assets and properties of the company along with books of accounts and other records of the company. It was also directed that till the next date, CRB Capital, its directors, servants and agents be restrained from disposing of, alienating and/or parting with possession of any of the assets of the CRB Capital. 11. It is submitted on behalf of RBI that in terms of the orders passed by the company court, the Provisional Liquidator had sealed all the premises of CRB Capital and had taken possession of the available assets and that the Provisional Liquidator had so far been able to recover an amount of Rs. 11. It is submitted on behalf of RBI that in terms of the orders passed by the company court, the Provisional Liquidator had sealed all the premises of CRB Capital and had taken possession of the available assets and that the Provisional Liquidator had so far been able to recover an amount of Rs. 17.58 crore as on 30.09.2002 which was lying deposited with the Provisional Liquidator. .12. We may also point out that, in the meanwhile, an application had been filed by RBI before the company court seeking permission to file a criminal complaint against CRB Capital and its Board of Directors. The company court granted the permission and thereafter RBI filed a criminal complaint case No. 288/1/2000 on 02.06.2000 under Section 58E(1) read with Section 58B(5) and 58C of RBI Act. The said criminal case is pending before the Metropolitan Magistrate, New Delhi. 13. While proceedings in the winding up petition (company petition No. 191/1997) filed by RBI, were going on, CRB Capital filed an application being C.A. No. 1416/1998 in the said company petition seeking approval for the scheme of re-arrangement formulated by them. By an order dated 23.02.2002, the company court directed the consideration of the scheme propounded by CRB Capital by the creditors of the company. Pending consideration of the scheme, the company court had also directed that no further step including publication be taken pursuant to the admission of the company petition No. 191/1997. The company court also directed the scheme to be considered by the secured creditors, unsecured creditors and shareholders of CRB Capital and, accordingly, meetings were held. A modified scheme of compromise and an arrangement was filed by CRB Capital for approval of the company court. On 01.07.2002 a meeting of the secured creditors was held. It was attended by 28 secured creditors. On 02.07.2002 a meeting of unsecured creditors was held at Talkatora Stadium and out of the 1,34,000 depositors, 14,461 attended the meeting either personally or through proxy. 14. Thereafter, CRB Capital filed the modified scheme, approved in the meetings, before the company court and sought sanction of the same. The same was numbered as company petition No. 251/2002. RBI filed detailed objections to the scheme. The scheme was also objected to by the Official Liquidator, CBI, SEBI as also Malanpur Steel Limited and GIIC. 14. Thereafter, CRB Capital filed the modified scheme, approved in the meetings, before the company court and sought sanction of the same. The same was numbered as company petition No. 251/2002. RBI filed detailed objections to the scheme. The scheme was also objected to by the Official Liquidator, CBI, SEBI as also Malanpur Steel Limited and GIIC. We feel that it would be appropriate at this juncture itself to set out the relevant provisions of the said modified scheme. With regard to unsecured creditors the scheme entailed as under:- “(A) DEPOSIT & BOND HOLDERS i) DEPOSIT/BOND HOLDERS UPTO `. 5,000/- Payment equivalent to 100% of the deposit to deposit holders/Bond holders who have invested upto `. 5,000/- and to widows/retired Govt. servants/disabled/persons above 65 years not exceeding `. 10 crores, in aggregate, shall be made within one year from the date of sanctioning of the scheme of Arrangement/Compromise. ii) DEPOSITORS & BOND HOLDERS ABOVE `. 5,000/- a) The Payment equivalent to 50% of the principal amount deposited/invested shall be made in 5 equal yearly instalments commencing immediately upon expiry of twelve months from the date of sanctioning of the scheme by the Hon’ble Delhi High Court. b) Payment equivalent to balance 50% of the principal amount deposited/invested shall be discharged in the form of allotment of shares of CRB Capital Markets Ltd of `. 10/-each at par immediately upon receipt of approval from the competent authority. Considering the fact that the depositors of the various Co-Operative Banks are small and needy, payment to the Co- Operative Banks shall be made as follows: i) Payment equivalent to 25% of the principal amount shall be made within 3 months form (sic) the date of sanctioning of the scheme of Arrangemnet/Compromise by the Hon’ble Delhi High Court. ii) Payment of balance 75% of the principal amount shall be made in 16 equal quarterly instalments commencing from the month following the expiry of six months from the date of sanction of the scheme of Arrangemnt/Compromise by the Hon’ble Delhi High Court. ii) Payment of balance 75% of the principal amount shall be made in 16 equal quarterly instalments commencing from the month following the expiry of six months from the date of sanction of the scheme of Arrangemnt/Compromise by the Hon’ble Delhi High Court. iii) In view of the fact that two of the Co- Operative Banks namely The Gozaria Nagrik Sahkari Bank Ltd. and Boriavi Peoples Co-Operative Bank Ltd. Who have been declared as “weak Banks” by their Apex Body, payment shall be made to the said Banks as follows: a) Payment equivalent to 25% of the principal amount shall be made within 3 month from the date of sanctioning of the scheme by the Hon’ble Delhi High Court. b) Payment of balance 75% of the principal amount shall be made in eight equal quarterly instalment commencing from the month following the expiry of six months from the date of sanctioning of the scheme of Arrangement / Compromise by Hon’ble Delhi High Court. STATE BANK OF INDIA (Unsecured Creditor) Since the charge over the securities held by State Bank of India have not been registered with the Register of Companies, State Bank of India is considered as an unsecured creditor. All the assets whether moveable or immovable held by the State Bank of India except asset owned by CRB Corporation Ltd. shall be liquidated by the Bank in private negotiations in consultation with the propounder of the scheme for recovery of the principal amount. Any shortfall and/or deficiency in discharge of the dues of the Bank against recovery from the various assets held by SBI, the same shall be paid and/or discharged by the company at par in terms of the payment of schedule as applicable to other unsecured creditors. No interest, however, shall be payable to the Bank on the principal amount determined. OTHER UNSECURED CREDITORS i) Payment equivalent to 50% of the principal amount shall be made in 5 equal yearly instalments commencing immediately upon expiry of 12 months from the date of Sanction of the scheme by the Hon’ble Delhi High Court. ii) Payment equivalent to balance 50% of the principal amount shall be discharged in the form of allotment of shares of CRB Capital Markets Ltd. at the rate of `. 10/- each at par immediately upon receipt of approval from the competent authority. ii) Payment equivalent to balance 50% of the principal amount shall be discharged in the form of allotment of shares of CRB Capital Markets Ltd. at the rate of `. 10/- each at par immediately upon receipt of approval from the competent authority. FURTHER RESOLVED THAT upon sanction of the scheme of Arangement by the Hon’ble High Court as modified in terms contained herein above, all cases whether civil or criminal pending before any Court/Tribunnal/Authority shall be kept in abeyance and shall be withdrawn simultaneously upon receipt of last instalment of the dues by the Creditors in terms of the above schedule of payment. FURTHER RESOLVED THAT the original scheme filed by the propounder of the scheme shall be suitably modified to the extent indicated above.” Importantly, for a “fair and proper” implementation of the modified scheme of compromise or arrangement, the propounder of the scheme sought certain concessions and reliefs for approval by the company court. The reliefs and concessions which were sought were set out in part Chapter IV of the modified scheme. The same were as under:- “PART IV RELIEF AND CONCESSIONS SOUGHT BY THE PROPOUNDER OF THE SCHEME FOR REVIVAL OF THE COMPANY For a fair and proper implementation of the modified scheme of Compromise and or Arrangements as passed by the Secured Creditors, Unsecured Creditors and Shareholders of the company, the Propounder of the scheme has sought certain concessions and relief for approval by this Hon’ble Court having regard to the fact that the Company has been out of business for a period of about 5 years and for the reason of the business activities of not only the Company but all its Group Companies came to a grinding halt on account of prohibitory order issued by the Reserve Bank of India on 9/4/1997 and the appointed of Official Liquidator as Provisional Liquidator of the Company. RELIEF AND CONCESSIONS SOUGHT 1. The orders passed by this Hon’ble Court restraining the Company as well as other Group Companies from disposing of their assets and properties particularly the order passed on 4/11/97 in CA No. 1536/97 in C.P. No. 191/97 and for freezing the Bank accounts of these Companies be vacated. 2. RELIEF AND CONCESSIONS SOUGHT 1. The orders passed by this Hon’ble Court restraining the Company as well as other Group Companies from disposing of their assets and properties particularly the order passed on 4/11/97 in CA No. 1536/97 in C.P. No. 191/97 and for freezing the Bank accounts of these Companies be vacated. 2. The Official Liquidator be directed to hand over the Books of Accounts, records documents, assets & properties of the Company as well as the other Group Companies including the Cash balance lying with him and / or deposited in any Bank to the Propounder of the Scheme. 3. SEBI & Stock Exchanges (a) The Registrations and Licences, granted by Securities and Exchange Board of India (SEBI) for carrying out different activities by the Company and other Group Companies, which were suspended as a consequence to the appointment of Provisional Liquidator by this Hon’ble Court be restored and SEBI and the Stock exchanges where the shares of the Company as well its Group Companies were listed be directed to revoke its various orders passed u/s 11B of Securities and Exchange Board of India Act (SEBI Act) and or any other provisions of SEBI Act and other Laws, Regulations, & bye-laws of SEBI and Stock Exchanges. The details of such Registrations and Licences given to the Company and its Group Companies are as under:- i) Category-I Merchant Banking Registration granted by SEBI to the Company. ii) Registration Certificate granted to the Company by SEBI for setting up Mutual Fund. iii) Registration Certificate granted by SEBI to CRB Shares Custodian Services Ltd to act as Registrar and Share Transfer Agent and as Debenture Trustee. iv) Registration Certificate granted by SEBI to CRB Share Broking Ltd to act as Corporate Member of Mumbai Stock Exchange and OTCEI. v) Revocation of suspension orders for trading in shares of the Company as well as its other Group Companies in all Stock Exchange. vi) Revocation of suspension order passed by SEBI and other Stock Exchanges suspending their membership rights of the ex-Directors of the Company and to allowed them to resume security treading business at Stock Exchanges. vii) Stock Exchanges to hand over the share certificates along with Transter Deeds which have been received by them as “bad delivery” with the directions to resubmit these Shares Certificates along with rectified Transfer Deeds. vii) Stock Exchanges to hand over the share certificates along with Transter Deeds which have been received by them as “bad delivery” with the directions to resubmit these Shares Certificates along with rectified Transfer Deeds. b) SEBI & Stock Exchanges be directed to give its approval for issue of fresh shares to the unsecured Creditors (including Deposit holders) by way of preferential allotment as envisaged in the scheme under its relevant guidelines and such shares be listed at various Exchanges. 4. The Companies which have withheld shares lodged for transfer by the Company and its Group Companies be directed to register the transfer of such shares in favour of the Company and its Group Companies as the case may be and deliver the same to them. RESERVE BANK OF INDIA (i) All the Bank accounts of the Company as well as its Group Companies and its ex-Directors & Officers which have been freezed be defreezed and Reserve Bank of India be directed to give necessary instructions to the Banks for making such accounts operative. (ii) Reserve Bank of India be directed to revoke its prohibitory orders passed u/s 45K(4) read with section 45MB(1) of RBI Act 1934. (iii) Reserve Bank of India be directed to accept the Application for Registration as NBFC u/s 45(1A) of Reserve Bank of India Act, 1934 on being filed by the Company. (iv) Reserve Bank of India be directed to restore its suspension order against “in principal approval” for setting up CRB Global Bank Ltd. (v) Reserve Bank of India be directed to restore the Licences granted to the Company to act as authorized dealer in foreign exchange. 5. Trust petition No.3 filed by SEBI before the Hon’ble Mumbai High Court be transferred to this Hon’ble Court and after such transfer the assets, books of accounts, records etc of CRB Asset Management Company Ltd, CRB Trustee Limited and CRB Mutual Fund Ltd. be handed over to the Propounder of the Scheme. 6. INCOME TAX AUTHORITIES The Income-tax Department be directed to stay the demands and vacate the ex-parte orders and to allow the Company to file Appeal/s. Revision Applications and any other proceedings before the appropriate authorities and or Court and any delay in filing such proceedings be condoned and interest & penalties be waived. 7. 6. INCOME TAX AUTHORITIES The Income-tax Department be directed to stay the demands and vacate the ex-parte orders and to allow the Company to file Appeal/s. Revision Applications and any other proceedings before the appropriate authorities and or Court and any delay in filing such proceedings be condoned and interest & penalties be waived. 7. CIVIL/CRIMINAL CASES All the cases, civil as well as criminal, filed against the Company, its ex-Directors & Officers, particularly the following cases filed against the Company and its Directors be vacated or stayed sine-die. Details of such cases, inter-alia, are as under: a) All the Complaint cases filed u/s 138 of Negotiable Instruments Act against the Company and its Directors and/or its Officers. b) Case No. 42/97 filed by CBI in Session Court at Mumbai on the Complaint of State Bank of India against the Directors and Officers of the Company. c) Case No. 1/98 filed by CBI in Session Court at Mumbai on complaint of Bank of Baroda against the Directors and Officers of the Company. d) Complaint case No. 37/97 registered by G.B.C.B. CID Mumbai in the Court of Metropolitan Magistrate, Esplanade Court at the Mumbai on complaint of Depositors. e) Complaint case No. 253/97 registered by CID Pune on the complaint of Govind Warran Paranjape and other depositors. f) Complaint case No. 6/97 filed by CID, Gandhinagar, Ahmedabad on Complaint of Jaitaram Hathi Bhai Choudhary on behalf of Mansa Cooperative Bank and others before the Metropolitan Magistrate Court, Ahmedabad. g) Complaint Case No. 1-82/97registered by Sangamner Sahar Police Station Sangamner on the complaint of Dr Rajendra Kedarnath Malpani and pending before Court at Sangamner. h) Complaint case No. 288/1/2000 filed by Reserve Bank of India in the Colurt of Metropolitan Magistrate, New Delhi against the Company and its Directors. i) All other cases civl or criminal filed by any depositor or any other institution or person against the company and/or its Directors and pending before any Court in India. j) All the cases filed by Provident Fund, Sales Tax, ESI and any other authorities against the Company and its Directors be stayed. k) Any other proceedings filed in any Court in India by any persom, Company and or Institutions including Public Interest Litigation, cases filed by GHC Ahmedabad etc. be vacated or stayed sine-die. 8. j) All the cases filed by Provident Fund, Sales Tax, ESI and any other authorities against the Company and its Directors be stayed. k) Any other proceedings filed in any Court in India by any persom, Company and or Institutions including Public Interest Litigation, cases filed by GHC Ahmedabad etc. be vacated or stayed sine-die. 8. All the cases filed by the Company in various Courts for recovery of dues including Complaint cases against Debtors filed u/s 138 of Negotiable Instruments Act before the appointment of Provisional Liquidator by the Hon’ble Court be transferred to the jurisdiction of this Hon’ble Court and the various Courts where such cases are pending be directed to restore such cases before transfer in the event any such cases have been dismissed for any reasons including for nonappearance by the Provisional Liquidator. 9. CBI (i) Necessary directions be given to CBI to release the passports of Propounder of the Scheme and ex-Directors of the Company so as to enable the Company to resume dialogue with the Joint Venture collaborators in Mutual Fund and Security trading business and re-establish these collaborations. (ii) Necessary directions be given to CBI to hand over all the records and documents of the Company as well as its Group companies including records of Fixed Deposits etc. 10. All the cases filed by the Official Liquidator before this Hon’ble Court for recovery of dues from the debtors and other parties be decided and decrees passed. 11. The liabilities in respect of employees of the Company as well as its Group Companies be limited to their dues upto 21.5.97 and the services of the employees be treated as terminated on payment of their terminal benefits and arrears or dues if any upto the said date. 12. The following companies with whom the Company had entered into bought out deals be directed to pay the amounts due from them along with accrued interest till the date of payment - Board of Directors of the above mentioned companies. 13. State Bank of India be directed to hand over various assets and properties in respect of which charge has not been created in ROC. 14. 13. State Bank of India be directed to hand over various assets and properties in respect of which charge has not been created in ROC. 14. The Leased premises held by the Company prior to the Order dated 22/5/97 passed in CP No.191/97 be permitted to be released to the respective Landlords after paying the rent due to them till 22/5/97 subject to the Landlords depositing the security amount, if any deposited with them by the Company at the inception of tenancy. The rent for the period subsequent to 22/5/97 may kindly be waived. 15. The Propounder of the Scheme / Company be permitted to diversify the activities of the Company in other fields such as Infotech, Media, Biotech and any other activities and the Registrar of the Companies be directed to register alterations in the main object clause of the Memorandum of Association after filing of such resolutions passed by the Shareholders of the Company. 16. The Propounder of the scheme be permitted to raise his share of contribution to the modified scheme of Arrangement / Compromise by utilizing the funds which were lying in any Bank accounts in the account of the Propounder of the scheme, his family members and by liquidating the shares, securities or any other assets and necessary directions be given to the Banks allowing operation of the accounts to the Companies, allowing transfer of shares, securities etc. and to the Stock Exchanges for accepting such shares, securities etc. and the proceeds from such sales be permitted to use as Propounder’s contribution to the scheme. 17. All the personal guarantees executed by the Directors of the Company to the Banks, Institutions and other parties be discharged. 18. The Bank accounts of various companies / firms which had dealings with the Company in the ordinary course of business be defreezed.” Before the learned company Judge, RBI, SEBI, the Official Liquidator, Malanpur Steel Limited and GIIC had objected to the scheme, the main objector being the RBI. The RBI had contended that once an application under section 45MC(1)(d) of the RBI Act had been admitted it is only in extraordinary circumstances that an order of winding up ought not to be passed. And, that no such circumstances have been shown to exist by CRB Capital. The RBI had contended that once an application under section 45MC(1)(d) of the RBI Act had been admitted it is only in extraordinary circumstances that an order of winding up ought not to be passed. And, that no such circumstances have been shown to exist by CRB Capital. It was also contended that during the pendency of a winding up petition under section 45MC(1)(d) of the RBI Act no scheme under sections 391/392 of the Companies Act could be propounded or considered. It was urged that CRB Capital had lost its substratum and deserved to be wound up and that winding up would be in the interest of depositors as also in general public interest. It was also urged by RBI that the scheme was contrary to statutory provisions and as such approval ought not to be granted as that would be opposed to law as also public policy. A similar set of objections was made by the other objectors. 15. On behalf of CRB Capital it was submitted before the learned company Judge that the secured creditors, unsecured creditors and shareholders had accepted the modified scheme by an overwhelming 3/4ths majority in value as well as by simple majority. It was submitted that winding up of a company is a step which results in the civil death of the company and would be contrary to public interest as lakhs of depositors and shareholders all over the country would find that their funds and investments have dissipated. It was contended that RBI, while balancing the general public interest, has also to take into account the interest of the Bank and financial institutions as well as secured and unsecured creditors and that revival of a financial company ought not to be objected to merely because of certain alleged irregularities inasmuch as the implication of closure of a company not only has an impact on the financial institution and its customers but also on the future of the financial services in that region. It was also contended that section 45MC(1)(d) of RBI Act is akin to section 433(1)(f) of the Companies Act and therefore the winding up of a company should be ordered only in the rarest of rare case as it amounts to the civil death of a financial company and that the filing of a petition for winding up should not be resorted to as a matter of right. 16. 16. RBI had also urged that the resolution of creditors of a scheme of arrangement could not annul statutory provisions nor could it take away the statutory powers of RBI under the RBI Act and therefore the scheme ought not to be accepted/sanctioned by the court. It was also urged that the scheme contained multiple reliefs and concessions which had been sought, the effect of which would be the taking away of statutory powers not only of RBI but also of other statutory bodies. That would be contrary to law. 17. From the impugned judgment dated 24.01.2006, we find that the learned company Judge was of the view that public interest inherent in the scheme was evident from the fact that it seeks to benefit 1,34,000 deposit holders and about 36 co-operative banks and that many of the deposit holders were retired government personnel and senior citizens including widows and several other similarly situated deposit holders who were needy and depending on recurring income from the deposits made with CRB Capital. According to the learned company Judge the scheme contemplated a recovery plan for recovering arrears of dues, hire-purchase installments, loans and advances, reorganisation of share capital of the company by issuing shares of Rs. 10/- each at par with discharge of the dues of unsecured creditors including deposit holders and bond holders and engagement in non-fund based business activity The scheme also contemplated diversification of company business in areas such as information and technology, bio-tech and the growing market of media. The learned company Judge also noted that the scheme involved induction of funds by the propounders of the scheme to the extent of Rs. 10 crore. Although the scheme as propounded contemplated payment of 100% of the deposit to the deposit holders who had invested up to Rs. 5000/-, there was a cap put on it to the extent of Rs. 10 crore to be paid within the year. The learned company Judge, however, felt that the upper limit of Rs. 10 crore for such depositors was not in public interest. Consequently, he directed that the limit of Rs. 10 crore to the payment of deposits up to Rs. 5000/- be removed and the scheme was modified to that extent. 10 crore to be paid within the year. The learned company Judge, however, felt that the upper limit of Rs. 10 crore for such depositors was not in public interest. Consequently, he directed that the limit of Rs. 10 crore to the payment of deposits up to Rs. 5000/- be removed and the scheme was modified to that extent. It was also modified by directing that widows, disabled persons, retired government servants and persons above 55 years of age would get the entire deposit re-paid without any limit within one year after the sanction of the scheme. Insofar as the other unsecured creditors were concerned such as the deposit holders and bond holders above the value of Rs. 5000/-, they were to be paid an amount equivalent to 50% of the principal amount in five annual installments commencing from the date of sanctioning of the scheme and the balance 50% of the principal amount was to be discharged in the form of allotment of shares of CRB Capital of Rs. 10/- each at par as soon as the approvals from the competent authority (SEBI) were received. 18. Finally, the learned company Judge felt that there was inherent public interest in the scheme and sanctioned the same as under:- “49. I am, therefore, of the view that the following factors indicate the public interest inherent in the sanction of the scheme:- (a) The payment to small depositors under the scheme upto Rs. 5,000/- in toto within 9 months as per the modified period of one year to 9 months by this Court. (b) Payments in full to the weaker sections of society such as widows, government servants, disabled and senior citizens within one year of the sanctioning of the scheme. (c) 50% cash payment of the principal to even the unsecured creditors in 4 yearly instalments as per the scheme modified by this Court and the securing of balance by allotment of shares in their favour. (d) The approval of the scheme of the shareholders, creditors (secured) and unsecured, by the majority stipulated in Section 391 of the Act. (e) The benefit which is to accrue to 1,34,000 small deposit holders. (f) The benefit accruing to 36 co-operative Banks. (d) The approval of the scheme of the shareholders, creditors (secured) and unsecured, by the majority stipulated in Section 391 of the Act. (e) The benefit which is to accrue to 1,34,000 small deposit holders. (f) The benefit accruing to 36 co-operative Banks. (g) The fact that already Rs.17 crores have been realized and deposited in the accounts of the company in a nationalized bank during the pendency of this petition in this Court and realization of substantial interest on such Fixed Deposits of Rs.17 crores. xxxx xxxx xxxx xxxx 52. Accordingly, while approving the scheme it is necessary to given the following directions for supervision and modification of the scheme:- (I) The condition with regard to the Deposit/Bond holders upto Rs. 5,000/- is modified and the term for repayment is thus reduced from the period of one year to a period of 9 months. Further the words "not exceeding Rs.10 crores in aggregate" is deleted as such a limit may hurt the small depositors. Furthermore, the scheme is modified and widows, retired government servants, disabled persons and senior citizens above 65 years shall be paid their entire principal amount deposited within one year from the date of sanctioning of the scheme. (II) With regard to the unsecured creditors including deposit and bond holders above Rs. 5000/-, (except the categories of widows, retired government servants and persons above 65 years) whose period of repayment as per the scheme is 5 annual equal instalments commencing from 12 months from the date of sanction of the scheme is modified and now reduced to 4 annual equal instalments constituting 50% of the principal amount beginning from the expiry of 12 months from the date of sanction of the scheme. (III) With regard to the relief and concession sought in part IV of the scheme under the heading Reserve Bank of India i.e. (i) to (v) from the Reserve Bank of India the petitioners have during the course of hearing given up the reliefs / concessions sought in clauses (ii) to (v) under the heading Reserve Bank of India and are not been pressed and accordingly the said clauses (ii) to (v) shall stand deleted from the Scheme. In so far as relief (i) is concerned directions have already been given in para 37 above. In so far as relief (i) is concerned directions have already been given in para 37 above. (IV) As regard para 5 of part IV of the scheme which related to the Trust Petition filed by SEBI before the Bombay High Court it is contended by the parties that Trust Petition No.3 filed by SEBI before the Hon’ble Mumbai High Court is presently pending before the Supreme Court of India for transferring the same and accordingly the said para 5 shall stand deleted from the scheme. xxxx xxxx xxxx xxx (VI) That the propounder of this scheme shall within 15 days from the date of sanction of the scheme file an affidavit in the Court accepting the modifications made to the scheme in this order and undertaking to be bound by the same. (VII) The propounder shall also file the projected balance sheet for five years from the cut-off date annexure-A and the projected fund for statement 5 years from the cut-off date Annexure-B in view of the modifications made in this judgment.” The learned company Judge ordered as under:- “a. The company petition No.251 of 2002 along with Company application No.1416 of 1998 is allowed subject to the terms and conditions mentioned above. b. The scheme of compromise and arrangement as put forth in company petition No.251 of 2002 along with Company application No.1416 of 1998 is sanctioned subject to the above modifications / orders so as to be binding on the petitioner / company and its members creditors. c. In view of the fact that the scheme has been sanctioned subject to the above modifications / orders as above, the winding up petition No. C.P.No.191/1997 filed by RBI against the company along with all other pending application shall stand disposed of accordingly. However, if the administrator reports that the scheme cannot be successfully implemented, then the winding up petition shall revive and the company would be liable to be wound up. d. The petitioner shall file a certified copy of this order with the Registrar of Companies, Delhi Punjab & Haryana within 30 days of the date of the receipt of the order. e. The office is directed to draw up the order in the prescribed form by incorporating the modifications postulated as per this judgment.” 19. d. The petitioner shall file a certified copy of this order with the Registrar of Companies, Delhi Punjab & Haryana within 30 days of the date of the receipt of the order. e. The office is directed to draw up the order in the prescribed form by incorporating the modifications postulated as per this judgment.” 19. Initially these appeals were heard by a Division Bench of this Court and the same were disposed of by a judgment and/or order dated 29.02.2008. The Division Bench set aside the impugned judgment dated 24.01.2006 and remanded the matter to the company court for a fresh disposal in the following manner:- “We accordingly set aside the impugned order passed by the Company Court and remit the matter back for a fresh disposal in accordance with law after addressing in particular following, among other, issues if any raised before it. i) Whether a scheme under Section 391-392 of the Companies Act is maintainable in a winding up petition filed by the RBI under Section 45 MC(1) of the RBI Act? ii) Whether a scheme under Sections 391-392 of the Companies Act could set aside quasi judicial orders passed by a statutory authority like the SEBI constituted under the Securities and Exchange Board of India Act, 1992? iii) Whether criminal and income tax proceedings pending against the company and its Directors could be stayed by the Company Court while sanctioning a scheme under Section 391-392 of the Companies Act? iv) Depending upon the answers of questions 1 to 4 above whether the scheme formulated in the instant case is bonafide, feasible and fair? v) Whether grounds for winding up of the company under Section 45 MC (1) of the RBI as made out in the winding up petition exist. If so, to what effect?” 20. Being aggrieved by the said order dated 29.02.2008 passed by the said Division Bench in the said appeals, CRB Capital preferred Special Leave Petitions before the Supreme Court which got converted into Civil Appeal Nos. 2733-2736/2009 (CRB Capital Markets Limited v. Reserve Bank of India & Ors.). Those civil appeals were disposed of by the Supreme Court by an order dated 22.04.2009 in the following manner:- “23. 2733-2736/2009 (CRB Capital Markets Limited v. Reserve Bank of India & Ors.). Those civil appeals were disposed of by the Supreme Court by an order dated 22.04.2009 in the following manner:- “23. We are, accordingly, of the view that since the Division Bench has not considered on merits the findings of the Company Judge, it would be in the fitness of things for the Division Bench itself to consider all the points, including those which had not been considered by the Company Judge, as raised at the time of hearing of the Appeals, and decide the same. 24. We, accordingly, allow the Appeals and set aside the order of the Division Bench impugned therein and direct the Division Bench of the Delhi High Court to rehear the Appeals, out of which the order impugned in these appeals arise, on all questions which had been raised before the Company Judge and the Division Bench and also as formulated by the Division Bench, in accordance with law within six months from the date of communication of this Order. During the pendency of the appeals, the order of the learned Single Judge dated 24th January, 2008, shall remain stayed.” 21. That is how the matter is once again before a Division Bench of this court. Q.1 Whether a scheme under Section 391-392 of the Companies Act is maintainable in a winding up petition filed by the Reserve Bank of India under Section 45MC(1) of the Reserve Bank of India Act, 1934? The first question which we have to examine is whether an application for sanctioning a scheme under sections 391/392 of the Companies Act is maintainable in a winding up petition filed by Reserve Bank of India under section 45 MC(1) of the RBI Act. Mr Parag Tripathi, appearing on behalf of the RBI submitted that CRB Capital was a defaulting NBFC and as a consequence was liable to be wound up under Section 45MC of the RBI Act. He further submitted that Chapter III B of the RBI Act was specially introduced to control NBFCs and to deal with defaulting NBFCs when they committed defaults or violations. It was also contended that by virtue of Section 45Q, the provisions of Chapter III B would override all other laws including the Companies Act. He further submitted that Chapter III B of the RBI Act was specially introduced to control NBFCs and to deal with defaulting NBFCs when they committed defaults or violations. It was also contended that by virtue of Section 45Q, the provisions of Chapter III B would override all other laws including the Companies Act. It was, therefore, contended that when RBI had filed the winding up petition alleging serious defaults on the part of CRB Capital, the company Judge ought to have considered the winding up petition on merits and that sanctioning of a scheme without considering the winding up petition on merits was unsustainable. It was also submitted that the scheme propounded by CRB Capital and sanctioned by the learned company Judge with certain modifications is contrary to the provisions of Chapter III B of the RBI Act and therefore the same cannot be sustained in law. It was also submitted that the learned company Judge was only impressed by the fact that the majority of creditors (secured and unsecured) and shareholders had passed the scheme and therefore the same ought to be sanctioned. The learned counsel referred to the decision of the Supreme Court in the case of Miheer H Mafatlal v. Mafatlal Industries Limited: (1997) 1 SCC 579 , wherein, according to the learned counsel, the Supreme Court held that a scheme could not be sanctioned if it violated any law. According to the learned counsel, the Supreme Court also held that the court sanctioning a scheme had to consider the pros and cons of the scheme with a view to finding out whether it was fair, just and reasonable and was not contrary to any provisions of law and did not violate any public policy. It was also contended that the concessions sought by CRB Capital were contrary to the statutory provisions and could not be granted in law. It was submitted that in the absence of such concessions the scheme was not workable. Importantly, the learned counsel for RBI drew our attention to the fact that the proposal to discharge part of the liability towards the depositors by issuance of shares of the very same company in liquidation was unacceptable. 22. It was submitted that in the absence of such concessions the scheme was not workable. Importantly, the learned counsel for RBI drew our attention to the fact that the proposal to discharge part of the liability towards the depositors by issuance of shares of the very same company in liquidation was unacceptable. 22. The learned counsel also sought to distinguish the decision of the Karnataka High Court in the case of In Re: Maharashtra Apex Corporation Limited: (2005) 124 Company Cases 637 (Karnataka) by submitting that in that case no winding up petition had been filed by RBI under Section 45MC and the question of non-application of section 391 of the Companies Act in a winding up petition under section 45MC of the RBI Act did not at all arise. Therefore, the reliance placed by the company Judge on the said decision of Karnataka High Court was misplaced. It was submitted that in any event the Supreme Court decision in Miheer H Mafatlal (supra) made it clear that a scheme cannot be sanctioned if it violated any law. Mr Tripathi submitted that Section 45QA(1) provided that every deposit accepted by the NBFC shall be re-paid in accordance with the terms and conditions of the deposits. Thus, there was an absolute requirement of re-payment of the entire deposits in accordance with the terms and conditions of the deposits. It is only the Company Law Board, under section 45QA(2), which had jurisdiction to frame a scheme of re-payment in case an NBFC made a default in re-payment. He submitted that section 58B(4)(AAA) provided for penalty in case of non-compliance of an order made by the Company Law Board under Section 45QA and this clearly implies that the provisions of section 45QA were mandatory and not directory. It was contended that a conjoint reading of Section 45QA(1), 45QA(2) and 58B4(AAA) made it incumbent upon an NBFC to re-pay the entire amount and these provisions make it clear that the liability is not merely a contractual liability but a statutory liability and therefore CRB Capital cannot be heard to submit that they had settled with the depositors for part-payment. 23. 23. It was also submitted that any scheme under Section 391 of the Companies Act has to be in compliance with the provisions of Chapter III B which includes section 45QA of the RBI Act and a petition for winding up under Section 45MC(1)(d) of the RBI Act cannot be defeated by allowing a scheme under Section 391 of the Companies Act which is in violation of the statutory provision contained in Section 45QA of the RBI Act. 24. Mr Sudhanshu Batra appearing on behalf of CRB Capital submitted that there is no prohibition on considering a scheme under Sections 391/392 of the companies Act during the pendency of a winding up petition filed by RBI under Section 45MC of the RBI Act. In fact, according to him, Section 45MC(4) makes all the provisions of the Companies Act, 1956 “relating to winding up of a company” applicable to a winding-up proceeding initiated on the application made by RBI under Section 45MC of the RBI Act. He then submitted that Part VII of the Companies Act dealt with winding up. Chapter I thereof contained preliminary provisions dealing with modes of winding up and contributories. Chapter II of Part VII dealt with the cases of winding up by the Court/Tribunal. Section 433 which stipulated the circumstances in which a company could be wound up fell within this chapter. And, so did Section 446, which provided for stay of suit on the passing of a winding up order. Section 446(2)(c), according to Mr Batra, empowered the Court/Tribunal, notwithstanding anything contained in any other law for the time being in force, to have jurisdiction to entertain or dispose of any application made under Section 391 by or in respect of the company. Therefore, according to Mr Batra, a scheme under Section 391 of the Companies Act can be entertained even in the case of a winding up proceeding under section 45MC of the RBI Act. He referred to the decision of the Supreme Court in the case of M/s Doypack Systems Pvt. Ltd. V. Union of India: (1988) 2 SCC 299 , in order to explain the meaning of the expression “in relation to”. According to him, the Supreme Court held that the said expression was one of expansion and not of contraction. He referred to the decision of the Supreme Court in the case of M/s Doypack Systems Pvt. Ltd. V. Union of India: (1988) 2 SCC 299 , in order to explain the meaning of the expression “in relation to”. According to him, the Supreme Court held that the said expression was one of expansion and not of contraction. He submitted that even in T.N. Kalyana Mandapam Assocation v. Union of India: (2004) 5 SCC 632 , the Supreme Court had recognized that the expression “in relation to” ought to be given an expansive or wide meaning and should not be construed narrowly. Consequently, Mr Batra, submitted that a scheme under Sections 391/392 could very well be considered by the company court even in a case of winding up under Section 45MC of the RBI Act inasmuch as Section 45MC(4) of the RBI Act itself makes it clear that all the provisions of the Companies Act “relating to” winding up of a company shall apply to a winding up proceeding initiated on the application made by RBI under Section 45MC of the RBI Act. With regard to the alternative arguments raised by Mr Parag Tripathi that even if it is assumed that a scheme under Section 391 can be maintained in the backdrop of a winding petition under Section 45MC of the RBI Act, such a scheme would not be maintainable if it was contrary to the provisions of Chapter III B of the RBI Act, the learned counsel for CRB Capital submitted that the scheme sanctioned by the learned company Judge was not contrary to the provisions of Chapter III B of the RBI Act. 25. It was also contended on behalf of CRB Capital that disbursements have been made to the depositors and other investors under the scheme and in terms of an order dated 15.12.2010 passed by this court in these appeals, as a result of which, unsecured creditors have been given priority over the dues of the secured creditors as provided under section 529A and 530 of the Companies Act, 1956. It was, therefore, contended that the clock cannot be put back when a large number of unsecured creditors have already been paid. JUDGMENT BADAR DURREZ AHMED, J 1. In all these appeals the judgment dated 24.01.2006 delivered by the learned company Judge is under challenge. It was, therefore, contended that the clock cannot be put back when a large number of unsecured creditors have already been paid. JUDGMENT BADAR DURREZ AHMED, J 1. In all these appeals the judgment dated 24.01.2006 delivered by the learned company Judge is under challenge. The appellants are aggrieved by the fact that the learned company Judge allowed the company petition No. 251/2002 filed on behalf of CRB Capital Markets Limited (the common respondent in all these appeals). CRB Capital Markets Limited (hereinafter referred to as ‘CRB Capital’) had filed the said company petition No. 251/2002 seeking sanction of a scheme under sections 391/392 of the Companies Act, 1956. That scheme of compromise and arrangement as put forth in the said company petition No. 251/2002 has been sanctioned by the learned company Judge, subject to certain modifications. In view of the fact that the scheme had been sanctioned, the winding up petition filed by the Reserve Bank of India (RBI) being C.P. No. 191/1997 under section 45MC(1)(d) of the Reserve Bank of India Act, 1934 (hereinafter referred to as the ‘RBI Act’) was, along with all other pending applications, ‘disposed of’. However, the learned company Judge directed that in case the Administrator reports that the scheme cannot be successfully implemented then the winding up petition filed by RBI would get revived and the company (CRB Capital) would be liable to be wound up. 2. The appellants in these four appeals are the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), Gujarat Industrial Investment Corporation Limited (GIIC) and Malanpur Steel Limited (earlier known as Hindustan Development Corporation Limited). All the appellants, including the Official Liquidator, had objected to the scheme. However, the learned company Judge sanctioned the scheme with certain modifications primarily because the learned company Judge felt that the public interest would be met inasmuch as the small depositors would be paid. However, the appellants feel that the scheme as propounded and sanctioned is contrary to public interest as also contrary to statutory provisions and is opposed to public policy. In fact, the learned counsel for the RBI had submitted that during the pendency of a winding up petition filed by the RBI under section 45MC(1)(d) of the RBI Act no scheme under sections 391/392 of the Companies Act could, at all, have been entertained by the company court. Background facts: 3. In fact, the learned counsel for the RBI had submitted that during the pendency of a winding up petition filed by the RBI under section 45MC(1)(d) of the RBI Act no scheme under sections 391/392 of the Companies Act could, at all, have been entertained by the company court. Background facts: 3. We shall examine the submissions of the parties but, before we do that, it would be necessary to set out the sequence of events. According to the RBI, CRB capital was originally incorporated on 16.05.1985 as CRB Consultancy Private Limited which got converted into a public limited company on 04.03.1991 and the name was changed to its present form (CRB Capital Markets Limited) on 18.11.1991. CRB capital is a Non-Banking Financial Company (NBFC). Consequently, it would be, inter alia, governed by the provisions set out in Chapter IIIB of the RBI Act. The chapter heading itself reads as under:- “Provisions relating to Non-Banking Institutions receiving deposits and Financial Institutions.” CRB Capital was provisionally classified as a loan company on 04.05.1993 and the classification status was changed to that of Equipment Leasing Company on 16.06.1993. 4. It is pointed out by the RBI that on 12.04.1993, based on the Shah Committee recommendations on the role of NBFCs a circular was issued to all the NBFCs advising them to get themselves registered with RBI if their net owned funds were more than Rs. 50 Lakhs. It is alleged that CRB Capital, although it had net owned funds of more than Rs. 50 Lakhs, did not apply for registration till the year 1996. CRB Capital made an application to RBI for registration only on 24.10.1996 and on receipt of the application RBI decided to inspect the company before registration. Inspections were carried out between November 13, 1996 and November 18, 1996 with reference to CRB Capital’s financial position as on 31.03.1996. However, the inspection extended to the Mumbai office of CRB Capital and therefore the inspection was completed in its entirety only in January 1997. 5. During the inspection, according to RBI, several illegalities and irregularities came to light. RBI had also received complaints from the Tourism Finance Corporation of India Limited regarding non-payment of deposits. Consequently, a show cause notice was issued by RBI to CRB Capital on 24.02.1997 as to why CRB Capital should not be prohibited from accepting deposits. A reply was submitted by CRB Capital. RBI had also received complaints from the Tourism Finance Corporation of India Limited regarding non-payment of deposits. Consequently, a show cause notice was issued by RBI to CRB Capital on 24.02.1997 as to why CRB Capital should not be prohibited from accepting deposits. A reply was submitted by CRB Capital. But, according to the RBI, the same was not found to be satisfactory. RBI also received information that CRB Capital was trying to mobilize further deposits by offering incentives etc. Consequently, RBI issued a prohibitory order under Section 45K read with Section 45MB(1) and 45MB(2) of the RBI Act and served the same in the corporate office of CRB Capital on 09.04.1997. By virtue of the said order, RBI prohibited CRB Capital from accepting deposits with immediate effect and CRB Capital was also precluded from accepting deposits from any person in any form whether by way of fresh deposits or renewal or otherwise. Furthermore, RBI directed CRB Capital not to sell, transfer, create charge or mortgage or deal in any manner with its property and assets without prior written permission of RBI for a period of six months from the date of the order. Attention of CRB Capital was also drawn to the provisions of Section 58B(5) read with Section 58C of the RBI Act with regard to the liability of penalty in case there was any contravention of the order passed by the RBI. 6. It is also the case of RBI that it had received information from State Bank of India (SBI) through its letter dated 09.04.1997 regarding the alleged large scale misuse of the ‘at par’ discounting facility by CRB Capital. A complaint had been lodged by SBI with the Central Bureau of Investigation (CBI). A civil suit for recovery of an amount of Rs. 60 crore had also been filed. The CBI, after investigation had filed the charge-sheet in the competent court of law at Mumbai and the case is pending trial. 7. It is further the case of RBI that CRB Capital made a representation for the lifting of the prohibitory order. RBI, however, decided not to rescind the order passed under Section 45MB(1) and advised CRB Capital to propose a plan delineating the maturity profile of the existing deposits and proposed source of funds to re-pay the same. 7. It is further the case of RBI that CRB Capital made a representation for the lifting of the prohibitory order. RBI, however, decided not to rescind the order passed under Section 45MB(1) and advised CRB Capital to propose a plan delineating the maturity profile of the existing deposits and proposed source of funds to re-pay the same. RBI also sent a letter dated 26.04.1997 requiring CRB Capital to submit a schedule of assets which could be used for discharging its obligations and liabilities. According to RBI, the reply submitted by CRB Capital made no mention of its assets and only spoke of its liability. 8. According to RBI, CRB Capital was also advised to prepare a plan indicating the month-wise maturity pattern of public deposits, month-wise cash flow as also sale of assets (if any) for the purpose of re-payment of deposits by virtue of a letter dated 15.05.1997. CRB Capital did not respond to the said letter. It is also alleged that the efforts of the RBI to contact the Managing Director / Directors and Officers of CRB Capital were in vain. And that, all the offices of CRB Capital remained closed since 1997. It is further alleged that the Chairman of CRB Capital (C.R. Bansali) was not traceable and no other official of the company was available. Two of the Directors had informed RBI that they had resigned from the board of directors of the company with effect from 06.03.1997. In the meanwhile, RBI had also allegedly received a complaint from the Government of Gujarat informing it that a number of co-operative banks in the State of Gujarat had placed funds aggregating Rs. 50 crores with CRB Capital and they had received a severe jolt because of the non-payment of those deposits. That complaint was contained in a letter dated 09.05.1997. 9. It is alleged that in these circumstances, RBI was satisfied that the continuance of CRB Capital, a Non-Banking Financial Company, was detrimental to public interest and also detrimental to the interest of depositors of the company. Consequently, RBI decided to apply for winding up of CRB Capital by invoking the provisions of Section 45MC(1)(d) of the RBI Act. Accordingly, company petition No. 191/1997 was filed before the learned company Judge in this court. 10. Consequently, RBI decided to apply for winding up of CRB Capital by invoking the provisions of Section 45MC(1)(d) of the RBI Act. Accordingly, company petition No. 191/1997 was filed before the learned company Judge in this court. 10. On 22.05.1997 when the said company petition No. 191/1997 came up for hearing before the learned company Judge, notice was issued to the respondent to show cause as to why the petition be not admitted. In C.A. No. 552/1997, which was filed along with the said company petition, the learned company Judge noted that he was satisfied that there were sufficient grounds for the appointment of a Provisional Liquidator and consequently the Official Liquidator attached to the company court was appointed as a Provisional Liquidator and he was directed to take charge of all the assets and properties of the company along with books of accounts and other records of the company. It was also directed that till the next date, CRB Capital, its directors, servants and agents be restrained from disposing of, alienating and/or parting with possession of any of the assets of the CRB Capital. 11. It is submitted on behalf of RBI that in terms of the orders passed by the company court, the Provisional Liquidator had sealed all the premises of CRB Capital and had taken possession of the available assets and that the Provisional Liquidator had so far been able to recover an amount of Rs. 17.58 crore as on 30.09.2002 which was lying deposited with the Provisional Liquidator. .12. We may also point out that, in the meanwhile, an application had been filed by RBI before the company court seeking permission to file a criminal complaint against CRB Capital and its Board of Directors. The company court granted the permission and thereafter RBI filed a criminal complaint case No. 288/1/2000 on 02.06.2000 under Section 58E(1) read with Section 58B(5) and 58C of RBI Act. The said criminal case is pending before the Metropolitan Magistrate, New Delhi. 13. While proceedings in the winding up petition (company petition No. 191/1997) filed by RBI, were going on, CRB Capital filed an application being C.A. No. 1416/1998 in the said company petition seeking approval for the scheme of re-arrangement formulated by them. By an order dated 23.02.2002, the company court directed the consideration of the scheme propounded by CRB Capital by the creditors of the company. By an order dated 23.02.2002, the company court directed the consideration of the scheme propounded by CRB Capital by the creditors of the company. Pending consideration of the scheme, the company court had also directed that no further step including publication be taken pursuant to the admission of the company petition No. 191/1997. The company court also directed the scheme to be considered by the secured creditors, unsecured creditors and shareholders of CRB Capital and, accordingly, meetings were held. A modified scheme of compromise and an arrangement was filed by CRB Capital for approval of the company court. On 01.07.2002 a meeting of the secured creditors was held. It was attended by 28 secured creditors. On 02.07.2002 a meeting of unsecured creditors was held at Talkatora Stadium and out of the 1,34,000 depositors, 14,461 attended the meeting either personally or through proxy. 14. Thereafter, CRB Capital filed the modified scheme, approved in the meetings, before the company court and sought sanction of the same. The same was numbered as company petition No. 251/2002. RBI filed detailed objections to the scheme. The scheme was also objected to by the Official Liquidator, CBI, SEBI as also Malanpur Steel Limited and GIIC. We feel that it would be appropriate at this juncture itself to set out the relevant provisions of the said modified scheme. With regard to unsecured creditors the scheme entailed as under:- “(A) DEPOSIT & BOND HOLDERS i) DEPOSIT/BOND HOLDERS UPTO `. 5,000/- Payment equivalent to 100% of the deposit to deposit holders/Bond holders who have invested upto `. 5,000/- and to widows/retired Govt. servants/disabled/persons above 65 years not exceeding `. 10 crores, in aggregate, shall be made within one year from the date of sanctioning of the scheme of Arrangement/Compromise. ii) DEPOSITORS & BOND HOLDERS ABOVE `. 5,000/- a) The Payment equivalent to 50% of the principal amount deposited/invested shall be made in 5 equal yearly instalments commencing immediately upon expiry of twelve months from the date of sanctioning of the scheme by the Hon’ble Delhi High Court. b) Payment equivalent to balance 50% of the principal amount deposited/invested shall be discharged in the form of allotment of shares of CRB Capital Markets Ltd of `. 10/-each at par immediately upon receipt of approval from the competent authority. b) Payment equivalent to balance 50% of the principal amount deposited/invested shall be discharged in the form of allotment of shares of CRB Capital Markets Ltd of `. 10/-each at par immediately upon receipt of approval from the competent authority. Considering the fact that the depositors of the various Co-Operative Banks are small and needy, payment to the Co- Operative Banks shall be made as follows: i) Payment equivalent to 25% of the principal amount shall be made within 3 months form (sic) the date of sanctioning of the scheme of Arrangemnet/Compromise by the Hon’ble Delhi High Court. ii) Payment of balance 75% of the principal amount shall be made in 16 equal quarterly instalments commencing from the month following the expiry of six months from the date of sanction of the scheme of Arrangemnt/Compromise by the Hon’ble Delhi High Court. iii) In view of the fact that two of the Co- Operative Banks namely The Gozaria Nagrik Sahkari Bank Ltd. and Boriavi Peoples Co-Operative Bank Ltd. Who have been declared as “weak Banks” by their Apex Body, payment shall be made to the said Banks as follows: a) Payment equivalent to 25% of the principal amount shall be made within 3 month from the date of sanctioning of the scheme by the Hon’ble Delhi High Court. b) Payment of balance 75% of the principal amount shall be made in eight equal quarterly instalment commencing from the month following the expiry of six months from the date of sanctioning of the scheme of Arrangement / Compromise by Hon’ble Delhi High Court. STATE BANK OF INDIA (Unsecured Creditor) Since the charge over the securities held by State Bank of India have not been registered with the Register of Companies, State Bank of India is considered as an unsecured creditor. All the assets whether moveable or immovable held by the State Bank of India except asset owned by CRB Corporation Ltd. shall be liquidated by the Bank in private negotiations in consultation with the propounder of the scheme for recovery of the principal amount. Any shortfall and/or deficiency in discharge of the dues of the Bank against recovery from the various assets held by SBI, the same shall be paid and/or discharged by the company at par in terms of the payment of schedule as applicable to other unsecured creditors. Any shortfall and/or deficiency in discharge of the dues of the Bank against recovery from the various assets held by SBI, the same shall be paid and/or discharged by the company at par in terms of the payment of schedule as applicable to other unsecured creditors. No interest, however, shall be payable to the Bank on the principal amount determined. OTHER UNSECURED CREDITORS i) Payment equivalent to 50% of the principal amount shall be made in 5 equal yearly instalments commencing immediately upon expiry of 12 months from the date of Sanction of the scheme by the Hon’ble Delhi High Court. ii) Payment equivalent to balance 50% of the principal amount shall be discharged in the form of allotment of shares of CRB Capital Markets Ltd. at the rate of `. 10/- each at par immediately upon receipt of approval from the competent authority. FURTHER RESOLVED THAT upon sanction of the scheme of Arangement by the Hon’ble High Court as modified in terms contained herein above, all cases whether civil or criminal pending before any Court/Tribunnal/Authority shall be kept in abeyance and shall be withdrawn simultaneously upon receipt of last instalment of the dues by the Creditors in terms of the above schedule of payment. FURTHER RESOLVED THAT the original scheme filed by the propounder of the scheme shall be suitably modified to the extent indicated above.” Importantly, for a “fair and proper” implementation of the modified scheme of compromise or arrangement, the propounder of the scheme sought certain concessions and reliefs for approval by the company court. The reliefs and concessions which were sought were set out in part Chapter IV of the modified scheme. The reliefs and concessions which were sought were set out in part Chapter IV of the modified scheme. The same were as under:- “PART IV RELIEF AND CONCESSIONS SOUGHT BY THE PROPOUNDER OF THE SCHEME FOR REVIVAL OF THE COMPANY For a fair and proper implementation of the modified scheme of Compromise and or Arrangements as passed by the Secured Creditors, Unsecured Creditors and Shareholders of the company, the Propounder of the scheme has sought certain concessions and relief for approval by this Hon’ble Court having regard to the fact that the Company has been out of business for a period of about 5 years and for the reason of the business activities of not only the Company but all its Group Companies came to a grinding halt on account of prohibitory order issued by the Reserve Bank of India on 9/4/1997 and the appointed of Official Liquidator as Provisional Liquidator of the Company. RELIEF AND CONCESSIONS SOUGHT 1. The orders passed by this Hon’ble Court restraining the Company as well as other Group Companies from disposing of their assets and properties particularly the order passed on 4/11/97 in CA No. 1536/97 in C.P. No. 191/97 and for freezing the Bank accounts of these Companies be vacated. 2. The Official Liquidator be directed to hand over the Books of Accounts, records documents, assets & properties of the Company as well as the other Group Companies including the Cash balance lying with him and / or deposited in any Bank to the Propounder of the Scheme. 3. SEBI & Stock Exchanges (a) The Registrations and Licences, granted by Securities and Exchange Board of India (SEBI) for carrying out different activities by the Company and other Group Companies, which were suspended as a consequence to the appointment of Provisional Liquidator by this Hon’ble Court be restored and SEBI and the Stock exchanges where the shares of the Company as well its Group Companies were listed be directed to revoke its various orders passed u/s 11B of Securities and Exchange Board of India Act (SEBI Act) and or any other provisions of SEBI Act and other Laws, Regulations, & bye-laws of SEBI and Stock Exchanges. The details of such Registrations and Licences given to the Company and its Group Companies are as under:- i) Category-I Merchant Banking Registration granted by SEBI to the Company. The details of such Registrations and Licences given to the Company and its Group Companies are as under:- i) Category-I Merchant Banking Registration granted by SEBI to the Company. ii) Registration Certificate granted to the Company by SEBI for setting up Mutual Fund. iii) Registration Certificate granted by SEBI to CRB Shares Custodian Services Ltd to act as Registrar and Share Transfer Agent and as Debenture Trustee. iv) Registration Certificate granted by SEBI to CRB Share Broking Ltd to act as Corporate Member of Mumbai Stock Exchange and OTCEI. v) Revocation of suspension orders for trading in shares of the Company as well as its other Group Companies in all Stock Exchange. vi) Revocation of suspension order passed by SEBI and other Stock Exchanges suspending their membership rights of the ex-Directors of the Company and to allowed them to resume security treading business at Stock Exchanges. vii) Stock Exchanges to hand over the share certificates along with Transter Deeds which have been received by them as “bad delivery” with the directions to resubmit these Shares Certificates along with rectified Transfer Deeds. b) SEBI & Stock Exchanges be directed to give its approval for issue of fresh shares to the unsecured Creditors (including Deposit holders) by way of preferential allotment as envisaged in the scheme under its relevant guidelines and such shares be listed at various Exchanges. 4. The Companies which have withheld shares lodged for transfer by the Company and its Group Companies be directed to register the transfer of such shares in favour of the Company and its Group Companies as the case may be and deliver the same to them. RESERVE BANK OF INDIA (i) All the Bank accounts of the Company as well as its Group Companies and its ex-Directors & Officers which have been freezed be defreezed and Reserve Bank of India be directed to give necessary instructions to the Banks for making such accounts operative. (ii) Reserve Bank of India be directed to revoke its prohibitory orders passed u/s 45K(4) read with section 45MB(1) of RBI Act 1934. (iii) Reserve Bank of India be directed to accept the Application for Registration as NBFC u/s 45(1A) of Reserve Bank of India Act, 1934 on being filed by the Company. (ii) Reserve Bank of India be directed to revoke its prohibitory orders passed u/s 45K(4) read with section 45MB(1) of RBI Act 1934. (iii) Reserve Bank of India be directed to accept the Application for Registration as NBFC u/s 45(1A) of Reserve Bank of India Act, 1934 on being filed by the Company. (iv) Reserve Bank of India be directed to restore its suspension order against “in principal approval” for setting up CRB Global Bank Ltd. (v) Reserve Bank of India be directed to restore the Licences granted to the Company to act as authorized dealer in foreign exchange. 5. Trust petition No.3 filed by SEBI before the Hon’ble Mumbai High Court be transferred to this Hon’ble Court and after such transfer the assets, books of accounts, records etc of CRB Asset Management Company Ltd, CRB Trustee Limited and CRB Mutual Fund Ltd. be handed over to the Propounder of the Scheme. 6. INCOME TAX AUTHORITIES The Income-tax Department be directed to stay the demands and vacate the ex-parte orders and to allow the Company to file Appeal/s. Revision Applications and any other proceedings before the appropriate authorities and or Court and any delay in filing such proceedings be condoned and interest & penalties be waived. 7. CIVIL/CRIMINAL CASES All the cases, civil as well as criminal, filed against the Company, its ex-Directors & Officers, particularly the following cases filed against the Company and its Directors be vacated or stayed sine-die. Details of such cases, inter-alia, are as under: a) All the Complaint cases filed u/s 138 of Negotiable Instruments Act against the Company and its Directors and/or its Officers. b) Case No. 42/97 filed by CBI in Session Court at Mumbai on the Complaint of State Bank of India against the Directors and Officers of the Company. c) Case No. 1/98 filed by CBI in Session Court at Mumbai on complaint of Bank of Baroda against the Directors and Officers of the Company. d) Complaint case No. 37/97 registered by G.B.C.B. CID Mumbai in the Court of Metropolitan Magistrate, Esplanade Court at the Mumbai on complaint of Depositors. e) Complaint case No. 253/97 registered by CID Pune on the complaint of Govind Warran Paranjape and other depositors. f) Complaint case No. 6/97 filed by CID, Gandhinagar, Ahmedabad on Complaint of Jaitaram Hathi Bhai Choudhary on behalf of Mansa Cooperative Bank and others before the Metropolitan Magistrate Court, Ahmedabad. e) Complaint case No. 253/97 registered by CID Pune on the complaint of Govind Warran Paranjape and other depositors. f) Complaint case No. 6/97 filed by CID, Gandhinagar, Ahmedabad on Complaint of Jaitaram Hathi Bhai Choudhary on behalf of Mansa Cooperative Bank and others before the Metropolitan Magistrate Court, Ahmedabad. g) Complaint Case No. 1-82/97registered by Sangamner Sahar Police Station Sangamner on the complaint of Dr Rajendra Kedarnath Malpani and pending before Court at Sangamner. h) Complaint case No. 288/1/2000 filed by Reserve Bank of India in the Colurt of Metropolitan Magistrate, New Delhi against the Company and its Directors. i) All other cases civl or criminal filed by any depositor or any other institution or person against the company and/or its Directors and pending before any Court in India. j) All the cases filed by Provident Fund, Sales Tax, ESI and any other authorities against the Company and its Directors be stayed. k) Any other proceedings filed in any Court in India by any persom, Company and or Institutions including Public Interest Litigation, cases filed by GHC Ahmedabad etc. be vacated or stayed sine-die. 8. All the cases filed by the Company in various Courts for recovery of dues including Complaint cases against Debtors filed u/s 138 of Negotiable Instruments Act before the appointment of Provisional Liquidator by the Hon’ble Court be transferred to the jurisdiction of this Hon’ble Court and the various Courts where such cases are pending be directed to restore such cases before transfer in the event any such cases have been dismissed for any reasons including for nonappearance by the Provisional Liquidator. 9. CBI (i) Necessary directions be given to CBI to release the passports of Propounder of the Scheme and ex-Directors of the Company so as to enable the Company to resume dialogue with the Joint Venture collaborators in Mutual Fund and Security trading business and re-establish these collaborations. (ii) Necessary directions be given to CBI to hand over all the records and documents of the Company as well as its Group companies including records of Fixed Deposits etc. 10. All the cases filed by the Official Liquidator before this Hon’ble Court for recovery of dues from the debtors and other parties be decided and decrees passed. 11. (ii) Necessary directions be given to CBI to hand over all the records and documents of the Company as well as its Group companies including records of Fixed Deposits etc. 10. All the cases filed by the Official Liquidator before this Hon’ble Court for recovery of dues from the debtors and other parties be decided and decrees passed. 11. The liabilities in respect of employees of the Company as well as its Group Companies be limited to their dues upto 21.5.97 and the services of the employees be treated as terminated on payment of their terminal benefits and arrears or dues if any upto the said date. 12. The following companies with whom the Company had entered into bought out deals be directed to pay the amounts due from them along with accrued interest till the date of payment - Board of Directors of the above mentioned companies. 13. State Bank of India be directed to hand over various assets and properties in respect of which charge has not been created in ROC. 14. The Leased premises held by the Company prior to the Order dated 22/5/97 passed in CP No.191/97 be permitted to be released to the respective Landlords after paying the rent due to them till 22/5/97 subject to the Landlords depositing the security amount, if any deposited with them by the Company at the inception of tenancy. The rent for the period subsequent to 22/5/97 may kindly be waived. 15. The Propounder of the Scheme / Company be permitted to diversify the activities of the Company in other fields such as Infotech, Media, Biotech and any other activities and the Registrar of the Companies be directed to register alterations in the main object clause of the Memorandum of Association after filing of such resolutions passed by the Shareholders of the Company. 16. The Propounder of the scheme be permitted to raise his share of contribution to the modified scheme of Arrangement / Compromise by utilizing the funds which were lying in any Bank accounts in the account of the Propounder of the scheme, his family members and by liquidating the shares, securities or any other assets and necessary directions be given to the Banks allowing operation of the accounts to the Companies, allowing transfer of shares, securities etc. and to the Stock Exchanges for accepting such shares, securities etc. and to the Stock Exchanges for accepting such shares, securities etc. and the proceeds from such sales be permitted to use as Propounder’s contribution to the scheme. 17. All the personal guarantees executed by the Directors of the Company to the Banks, Institutions and other parties be discharged. 18. The Bank accounts of various companies / firms which had dealings with the Company in the ordinary course of business be defreezed.” Before the learned company Judge, RBI, SEBI, the Official Liquidator, Malanpur Steel Limited and GIIC had objected to the scheme, the main objector being the RBI. The RBI had contended that once an application under section 45MC(1)(d) of the RBI Act had been admitted it is only in extraordinary circumstances that an order of winding up ought not to be passed. And, that no such circumstances have been shown to exist by CRB Capital. It was also contended that during the pendency of a winding up petition under section 45MC(1)(d) of the RBI Act no scheme under sections 391/392 of the Companies Act could be propounded or considered. It was urged that CRB Capital had lost its substratum and deserved to be wound up and that winding up would be in the interest of depositors as also in general public interest. It was also urged by RBI that the scheme was contrary to statutory provisions and as such approval ought not to be granted as that would be opposed to law as also public policy. A similar set of objections was made by the other objectors. 15. On behalf of CRB Capital it was submitted before the learned company Judge that the secured creditors, unsecured creditors and shareholders had accepted the modified scheme by an overwhelming 3/4ths majority in value as well as by simple majority. It was submitted that winding up of a company is a step which results in the civil death of the company and would be contrary to public interest as lakhs of depositors and shareholders all over the country would find that their funds and investments have dissipated. It was submitted that winding up of a company is a step which results in the civil death of the company and would be contrary to public interest as lakhs of depositors and shareholders all over the country would find that their funds and investments have dissipated. It was contended that RBI, while balancing the general public interest, has also to take into account the interest of the Bank and financial institutions as well as secured and unsecured creditors and that revival of a financial company ought not to be objected to merely because of certain alleged irregularities inasmuch as the implication of closure of a company not only has an impact on the financial institution and its customers but also on the future of the financial services in that region. It was also contended that section 45MC(1)(d) of RBI Act is akin to section 433(1)(f) of the Companies Act and therefore the winding up of a company should be ordered only in the rarest of rare case as it amounts to the civil death of a financial company and that the filing of a petition for winding up should not be resorted to as a matter of right. 16. RBI had also urged that the resolution of creditors of a scheme of arrangement could not annul statutory provisions nor could it take away the statutory powers of RBI under the RBI Act and therefore the scheme ought not to be accepted/sanctioned by the court. It was also urged that the scheme contained multiple reliefs and concessions which had been sought, the effect of which would be the taking away of statutory powers not only of RBI but also of other statutory bodies. That would be contrary to law. 17. From the impugned judgment dated 24.01.2006, we find that the learned company Judge was of the view that public interest inherent in the scheme was evident from the fact that it seeks to benefit 1,34,000 deposit holders and about 36 co-operative banks and that many of the deposit holders were retired government personnel and senior citizens including widows and several other similarly situated deposit holders who were needy and depending on recurring income from the deposits made with CRB Capital. According to the learned company Judge the scheme contemplated a recovery plan for recovering arrears of dues, hire-purchase installments, loans and advances, reorganisation of share capital of the company by issuing shares of Rs. 10/- each at par with discharge of the dues of unsecured creditors including deposit holders and bond holders and engagement in non-fund based business activity The scheme also contemplated diversification of company business in areas such as information and technology, bio-tech and the growing market of media. The learned company Judge also noted that the scheme involved induction of funds by the propounders of the scheme to the extent of Rs. 10 crore. Although the scheme as propounded contemplated payment of 100% of the deposit to the deposit holders who had invested up to Rs. 5000/-, there was a cap put on it to the extent of Rs. 10 crore to be paid within the year. The learned company Judge, however, felt that the upper limit of Rs. 10 crore for such depositors was not in public interest. Consequently, he directed that the limit of Rs. 10 crore to the payment of deposits up to Rs. 5000/- be removed and the scheme was modified to that extent. It was also modified by directing that widows, disabled persons, retired government servants and persons above 55 years of age would get the entire deposit re-paid without any limit within one year after the sanction of the scheme. Insofar as the other unsecured creditors were concerned such as the deposit holders and bond holders above the value of Rs. 5000/-, they were to be paid an amount equivalent to 50% of the principal amount in five annual installments commencing from the date of sanctioning of the scheme and the balance 50% of the principal amount was to be discharged in the form of allotment of shares of CRB Capital of Rs. 10/- each at par as soon as the approvals from the competent authority (SEBI) were received. 18. Finally, the learned company Judge felt that there was inherent public interest in the scheme and sanctioned the same as under:- “49. I am, therefore, of the view that the following factors indicate the public interest inherent in the sanction of the scheme:- (a) The payment to small depositors under the scheme upto Rs. 18. Finally, the learned company Judge felt that there was inherent public interest in the scheme and sanctioned the same as under:- “49. I am, therefore, of the view that the following factors indicate the public interest inherent in the sanction of the scheme:- (a) The payment to small depositors under the scheme upto Rs. 5,000/- in toto within 9 months as per the modified period of one year to 9 months by this Court. (b) Payments in full to the weaker sections of society such as widows, government servants, disabled and senior citizens within one year of the sanctioning of the scheme. (c) 50% cash payment of the principal to even the unsecured creditors in 4 yearly instalments as per the scheme modified by this Court and the securing of balance by allotment of shares in their favour. (d) The approval of the scheme of the shareholders, creditors (secured) and unsecured, by the majority stipulated in Section 391 of the Act. (e) The benefit which is to accrue to 1,34,000 small deposit holders. (f) The benefit accruing to 36 co-operative Banks. (g) The fact that already Rs.17 crores have been realized and deposited in the accounts of the company in a nationalized bank during the pendency of this petition in this Court and realization of substantial interest on such Fixed Deposits of Rs.17 crores. xxxx xxxx xxxx xxxx 52. Accordingly, while approving the scheme it is necessary to given the following directions for supervision and modification of the scheme:- (I) The condition with regard to the Deposit/Bond holders upto Rs. 5,000/- is modified and the term for repayment is thus reduced from the period of one year to a period of 9 months. Further the words "not exceeding Rs.10 crores in aggregate" is deleted as such a limit may hurt the small depositors. Furthermore, the scheme is modified and widows, retired government servants, disabled persons and senior citizens above 65 years shall be paid their entire principal amount deposited within one year from the date of sanctioning of the scheme. (II) With regard to the unsecured creditors including deposit and bond holders above Rs. Furthermore, the scheme is modified and widows, retired government servants, disabled persons and senior citizens above 65 years shall be paid their entire principal amount deposited within one year from the date of sanctioning of the scheme. (II) With regard to the unsecured creditors including deposit and bond holders above Rs. 5000/-, (except the categories of widows, retired government servants and persons above 65 years) whose period of repayment as per the scheme is 5 annual equal instalments commencing from 12 months from the date of sanction of the scheme is modified and now reduced to 4 annual equal instalments constituting 50% of the principal amount beginning from the expiry of 12 months from the date of sanction of the scheme. (III) With regard to the relief and concession sought in part IV of the scheme under the heading Reserve Bank of India i.e. (i) to (v) from the Reserve Bank of India the petitioners have during the course of hearing given up the reliefs / concessions sought in clauses (ii) to (v) under the heading Reserve Bank of India and are not been pressed and accordingly the said clauses (ii) to (v) shall stand deleted from the Scheme. In so far as relief (i) is concerned directions have already been given in para 37 above. (IV) As regard para 5 of part IV of the scheme which related to the Trust Petition filed by SEBI before the Bombay High Court it is contended by the parties that Trust Petition No.3 filed by SEBI before the Hon’ble Mumbai High Court is presently pending before the Supreme Court of India for transferring the same and accordingly the said para 5 shall stand deleted from the scheme. xxxx xxxx xxxx xxx (VI) That the propounder of this scheme shall within 15 days from the date of sanction of the scheme file an affidavit in the Court accepting the modifications made to the scheme in this order and undertaking to be bound by the same. xxxx xxxx xxxx xxx (VI) That the propounder of this scheme shall within 15 days from the date of sanction of the scheme file an affidavit in the Court accepting the modifications made to the scheme in this order and undertaking to be bound by the same. (VII) The propounder shall also file the projected balance sheet for five years from the cut-off date annexure-A and the projected fund for statement 5 years from the cut-off date Annexure-B in view of the modifications made in this judgment.” The learned company Judge ordered as under:- “a. The company petition No.251 of 2002 along with Company application No.1416 of 1998 is allowed subject to the terms and conditions mentioned above. b. The scheme of compromise and arrangement as put forth in company petition No.251 of 2002 along with Company application No.1416 of 1998 is sanctioned subject to the above modifications / orders so as to be binding on the petitioner / company and its members creditors. c. In view of the fact that the scheme has been sanctioned subject to the above modifications / orders as above, the winding up petition No. C.P.No.191/1997 filed by RBI against the company along with all other pending application shall stand disposed of accordingly. However, if the administrator reports that the scheme cannot be successfully implemented, then the winding up petition shall revive and the company would be liable to be wound up. d. The petitioner shall file a certified copy of this order with the Registrar of Companies, Delhi Punjab & Haryana within 30 days of the date of the receipt of the order. e. The office is directed to draw up the order in the prescribed form by incorporating the modifications postulated as per this judgment.” 19. Initially these appeals were heard by a Division Bench of this Court and the same were disposed of by a judgment and/or order dated 29.02.2008. The Division Bench set aside the impugned judgment dated 24.01.2006 and remanded the matter to the company court for a fresh disposal in the following manner:- “We accordingly set aside the impugned order passed by the Company Court and remit the matter back for a fresh disposal in accordance with law after addressing in particular following, among other, issues if any raised before it. i) Whether a scheme under Section 391-392 of the Companies Act is maintainable in a winding up petition filed by the RBI under Section 45 MC(1) of the RBI Act? ii) Whether a scheme under Sections 391-392 of the Companies Act could set aside quasi judicial orders passed by a statutory authority like the SEBI constituted under the Securities and Exchange Board of India Act, 1992? iii) Whether criminal and income tax proceedings pending against the company and its Directors could be stayed by the Company Court while sanctioning a scheme under Section 391-392 of the Companies Act? iv) Depending upon the answers of questions 1 to 4 above whether the scheme formulated in the instant case is bonafide, feasible and fair? v) Whether grounds for winding up of the company under Section 45 MC (1) of the RBI as made out in the winding up petition exist. If so, to what effect?” 20. Being aggrieved by the said order dated 29.02.2008 passed by the said Division Bench in the said appeals, CRB Capital preferred Special Leave Petitions before the Supreme Court which got converted into Civil Appeal Nos. 2733-2736/2009 (CRB Capital Markets Limited v. Reserve Bank of India & Ors.). Those civil appeals were disposed of by the Supreme Court by an order dated 22.04.2009 in the following manner:- “23. We are, accordingly, of the view that since the Division Bench has not considered on merits the findings of the Company Judge, it would be in the fitness of things for the Division Bench itself to consider all the points, including those which had not been considered by the Company Judge, as raised at the time of hearing of the Appeals, and decide the same. 24. We, accordingly, allow the Appeals and set aside the order of the Division Bench impugned therein and direct the Division Bench of the Delhi High Court to rehear the Appeals, out of which the order impugned in these appeals arise, on all questions which had been raised before the Company Judge and the Division Bench and also as formulated by the Division Bench, in accordance with law within six months from the date of communication of this Order. During the pendency of the appeals, the order of the learned Single Judge dated 24th January, 2008, shall remain stayed.” 21. During the pendency of the appeals, the order of the learned Single Judge dated 24th January, 2008, shall remain stayed.” 21. That is how the matter is once again before a Division Bench of this court. Q.1 Whether a scheme under Section 391-392 of the Companies Act is maintainable in a winding up petition filed by the Reserve Bank of India under Section 45MC(1) of the Reserve Bank of India Act, 1934? The first question which we have to examine is whether an application for sanctioning a scheme under sections 391/392 of the Companies Act is maintainable in a winding up petition filed by Reserve Bank of India under section 45 MC(1) of the RBI Act. Mr Parag Tripathi, appearing on behalf of the RBI submitted that CRB Capital was a defaulting NBFC and as a consequence was liable to be wound up under Section 45MC of the RBI Act. He further submitted that Chapter III B of the RBI Act was specially introduced to control NBFCs and to deal with defaulting NBFCs when they committed defaults or violations. It was also contended that by virtue of Section 45Q, the provisions of Chapter III B would override all other laws including the Companies Act. It was, therefore, contended that when RBI had filed the winding up petition alleging serious defaults on the part of CRB Capital, the company Judge ought to have considered the winding up petition on merits and that sanctioning of a scheme without considering the winding up petition on merits was unsustainable. It was also submitted that the scheme propounded by CRB Capital and sanctioned by the learned company Judge with certain modifications is contrary to the provisions of Chapter III B of the RBI Act and therefore the same cannot be sustained in law. It was also submitted that the learned company Judge was only impressed by the fact that the majority of creditors (secured and unsecured) and shareholders had passed the scheme and therefore the same ought to be sanctioned. The learned counsel referred to the decision of the Supreme Court in the case of Miheer H Mafatlal v. Mafatlal Industries Limited: (1997) 1 SCC 579 , wherein, according to the learned counsel, the Supreme Court held that a scheme could not be sanctioned if it violated any law. The learned counsel referred to the decision of the Supreme Court in the case of Miheer H Mafatlal v. Mafatlal Industries Limited: (1997) 1 SCC 579 , wherein, according to the learned counsel, the Supreme Court held that a scheme could not be sanctioned if it violated any law. According to the learned counsel, the Supreme Court also held that the court sanctioning a scheme had to consider the pros and cons of the scheme with a view to finding out whether it was fair, just and reasonable and was not contrary to any provisions of law and did not violate any public policy. It was also contended that the concessions sought by CRB Capital were contrary to the statutory provisions and could not be granted in law. It was submitted that in the absence of such concessions the scheme was not workable. Importantly, the learned counsel for RBI drew our attention to the fact that the proposal to discharge part of the liability towards the depositors by issuance of shares of the very same company in liquidation was unacceptable. 22. The learned counsel also sought to distinguish the decision of the Karnataka High Court in the case of In Re: Maharashtra Apex Corporation Limited: (2005) 124 Company Cases 637 (Karnataka) by submitting that in that case no winding up petition had been filed by RBI under Section 45MC and the question of non-application of section 391 of the Companies Act in a winding up petition under section 45MC of the RBI Act did not at all arise. Therefore, the reliance placed by the company Judge on the said decision of Karnataka High Court was misplaced. It was submitted that in any event the Supreme Court decision in Miheer H Mafatlal (supra) made it clear that a scheme cannot be sanctioned if it violated any law. Mr Tripathi submitted that Section 45QA(1) provided that every deposit accepted by the NBFC shall be re-paid in accordance with the terms and conditions of the deposits. Thus, there was an absolute requirement of re-payment of the entire deposits in accordance with the terms and conditions of the deposits. It is only the Company Law Board, under section 45QA(2), which had jurisdiction to frame a scheme of re-payment in case an NBFC made a default in re-payment. Thus, there was an absolute requirement of re-payment of the entire deposits in accordance with the terms and conditions of the deposits. It is only the Company Law Board, under section 45QA(2), which had jurisdiction to frame a scheme of re-payment in case an NBFC made a default in re-payment. He submitted that section 58B(4)(AAA) provided for penalty in case of non-compliance of an order made by the Company Law Board under Section 45QA and this clearly implies that the provisions of section 45QA were mandatory and not directory. It was contended that a conjoint reading of Section 45QA(1), 45QA(2) and 58B4(AAA) made it incumbent upon an NBFC to re-pay the entire amount and these provisions make it clear that the liability is not merely a contractual liability but a statutory liability and therefore CRB Capital cannot be heard to submit that they had settled with the depositors for part-payment. 23. It was also submitted that any scheme under Section 391 of the Companies Act has to be in compliance with the provisions of Chapter III B which includes section 45QA of the RBI Act and a petition for winding up under Section 45MC(1)(d) of the RBI Act cannot be defeated by allowing a scheme under Section 391 of the Companies Act which is in violation of the statutory provision contained in Section 45QA of the RBI Act. 24. Mr Sudhanshu Batra appearing on behalf of CRB Capital submitted that there is no prohibition on considering a scheme under Sections 391/392 of the companies Act during the pendency of a winding up petition filed by RBI under Section 45MC of the RBI Act. In fact, according to him, Section 45MC(4) makes all the provisions of the Companies Act, 1956 “relating to winding up of a company” applicable to a winding-up proceeding initiated on the application made by RBI under Section 45MC of the RBI Act. He then submitted that Part VII of the Companies Act dealt with winding up. Chapter I thereof contained preliminary provisions dealing with modes of winding up and contributories. Chapter II of Part VII dealt with the cases of winding up by the Court/Tribunal. Section 433 which stipulated the circumstances in which a company could be wound up fell within this chapter. And, so did Section 446, which provided for stay of suit on the passing of a winding up order. Chapter II of Part VII dealt with the cases of winding up by the Court/Tribunal. Section 433 which stipulated the circumstances in which a company could be wound up fell within this chapter. And, so did Section 446, which provided for stay of suit on the passing of a winding up order. Section 446(2)(c), according to Mr Batra, empowered the Court/Tribunal, notwithstanding anything contained in any other law for the time being in force, to have jurisdiction to entertain or dispose of any application made under Section 391 by or in respect of the company. Therefore, according to Mr Batra, a scheme under Section 391 of the Companies Act can be entertained even in the case of a winding up proceeding under section 45MC of the RBI Act. He referred to the decision of the Supreme Court in the case of M/s Doypack Systems Pvt. Ltd. V. Union of India: (1988) 2 SCC 299 , in order to explain the meaning of the expression “in relation to”. According to him, the Supreme Court held that the said expression was one of expansion and not of contraction. He submitted that even in T.N. Kalyana Mandapam Assocation v. Union of India: (2004) 5 SCC 632 , the Supreme Court had recognized that the expression “in relation to” ought to be given an expansive or wide meaning and should not be construed narrowly. Consequently, Mr Batra, submitted that a scheme under Sections 391/392 could very well be considered by the company court even in a case of winding up under Section 45MC of the RBI Act inasmuch as Section 45MC(4) of the RBI Act itself makes it clear that all the provisions of the Companies Act “relating to” winding up of a company shall apply to a winding up proceeding initiated on the application made by RBI under Section 45MC of the RBI Act. With regard to the alternative arguments raised by Mr Parag Tripathi that even if it is assumed that a scheme under Section 391 can be maintained in the backdrop of a winding petition under Section 45MC of the RBI Act, such a scheme would not be maintainable if it was contrary to the provisions of Chapter III B of the RBI Act, the learned counsel for CRB Capital submitted that the scheme sanctioned by the learned company Judge was not contrary to the provisions of Chapter III B of the RBI Act. 25. It was also contended on behalf of CRB Capital that disbursements have been made to the depositors and other investors under the scheme and in terms of an order dated 15.12.2010 passed by this court in these appeals, as a result of which, unsecured creditors have been given priority over the dues of the secured creditors as provided under section 529A and 530 of the Companies Act, 1956. It was, therefore, contended that the clock cannot be put back when a large number of unsecured creditors have already been paid.