The liquidator is an additional person who can move for a compromise or arrangement under Section 391 of the Companies Act, 1956. The company, creditor, and member of the company are also entitled to make the necessary application to the court under the aforesaid section in such a situation.

( 1 ) THIS reference raises an interesting question of law whether summons or application can be moved by the (1) Company, (2) Creditor, (3) member with a view to proposing compromise or arrangement between Company and Creditors and Members under Section 391 of the Companies Act, 1956 (hereinafter referred to as "the "act") in case the Company is being wound up or can it be filed in such a situation exclusively by. the liquidator alone ?

( 2 ) IN the present case, the summons have been moved by Messrs. National Steel and General Mills (1) Limited (hereinafter referred to as the Company ), under Section 391 of the Act proposing a scheme of arrangement between the Company and ifs unsecured creditors, and in support of such summons the affidavit of Shri D. B. Sharda, erstwhile Director of the Company has been filed. The Company has been wound up under the orders of the Court dated August 1, 1988.

( 3 ) the reference has been made to this Bench for the reason that two views have been expressed by this Court, in regard to the maintainability of the application/summons filed by the Company, creditor or member, in case the Company is being wound up under Section 391 of the Act. At this stage it will be relevant to point out that the summons in this case have been moved by the Company, but for the purpose of maintainability of the application/summons, in the case of the Company being wound up, the Company, creditor, member have been placed in the same and equal footing in Section 391 of the Act. There is no dispute, however, before the winding up process begins Company/creditor/member has every right to commence. the proceedings under Section 391 of the Act.

( 4 ) MAHINDER Narain, J. in the present reference and in CP 42/85 decided on October 26, 1987 (Dr. Prithpal Singh Chhabra and Ors. v. M/s. Eastern Linkers Pvt. Ltd.) (l) has held that in case the Company is being wound up, it is only the Liquidator who can move or compromise and arrangement undersection 391 of the Act and the Company, creditor or member cannot maintain such application! summons. According to the learned Judge, after the Company is ordered to be wound up, the Company members are termed as contributory within the definiton of Section 428 of the Act and the members of the Company are termed as such during the life time of the Company only, i. e. , before it is wound up and contributors have been given no right to move summons/application under Section 391 of the Act. The relevant portion dealing with the reasoning in support of this proposition which finds place in judgment of October 26, 1987 may be reproduced below :

"these two words members" and "contributory" are not synonymous. The word "member" in the Companies Act deals with the status of a particular individual, or legal person prior to winding up of the company, and the word "contributory" deals with the status of an individual, or a legal person after the order of winding up of the company. The other provisions under which this application has been filed in Section 391 of the Companies Act. Section 361 of the Companies Act is in the Chapter which is prior to the Chapter on winding up. Section 391 postulates making of compromises and arrangements between company and creditors, or any class of them, and between the company and its members, or any class of them Section 391 does not enable any "contributory" to file a petition under Section 391. What it permits to be done is that after a winding up order has been passed, or the liquidator has been appointed, the liquidator is permitted to file the application for such compromise arrangement. In other words, after an order of winding up, a "contributory" is not permitted by Section 391 to file a petition by way of a compromise or arrangement between creditors and the company or the company and its members. "

( 5 ) ON the other hand, B. N. Kirpal, J. of this Court in Rajdhani Grains and Jaggery Exchange Ltd. (1983-54 Comp. Cases 166) decided o