( 1 ) THIS Petition under Section 391 (1) of the Companies Act (herein after referred to as the act) has been filed by Arvind Mills Limited (herein after referred to as the "company" ), seeking sanction to the Scheme of Restructuring of its debts, floated by the creditors. THE Company was incorporated on 1-6-1931 as a Public Limited Company to carry on business of spinning, weaving, manufacturing, dealing in cotton or other fabrics, substances and the preparation, dyeing or colouring of any of the said substances and the sale of yarn cloth or other manufactured fabrics and products and to carry on the business namely cotton spinners etc; that the Company had the authorised issued and subscribed share capital running into crores of rupees and issued equity shares of Rs. 100,54,99,450. 00 with redeemable cumulative and non-convertable preference shares etc; that the Company and its associated textile companies employed over 10,000 persons in and around the city of Ahmedabad making them a largest private sector employer in the State of Gujarat; that the petitioner Company earned profit for pretty long time; that the Company obtained borrowings/credits from various Banks and financial institutions to finance its business needs and as on 31-3-2000 the total debt of the Company mounted to approximately $ 593 million or Rs. 2,700-00 crores; that 64 percent of that is from on-shore lenders and balance from off-shore lenders. That during the period between years 1997-2000 the Company started making loss and was confronted with falling denim price and increase in manufacturing cost. The changed supply and demand structure in the industry, world-wide intensified price competition and as a result there was steep fall in the Companys sales realisation. That, on account of sharp increase in fuel expenses, significant cost and time overrun in certain projects, pre-operative expenses due to longer period of trial production and translation loss on dollar debt due to the depreciation of Indian rupees, the company did not generate adequate operational cash to service its debt during the Financial Year 2000. That the petitioner Company felt the need for rescheduling and restructuring of its debts. That the Company proactively sought a debt restructuring in a comprehensive manner that could prevent it from seeking repeated roll-overs from several lenders at differing terms. That the Company held meetings with its lenders to formulate its debt restructuring and lenders elected representatives to form a Steering Committee in order to implement the restructuring process in an efficient manner. On 14-11-2000 the Steering Committee approved the restructuring plan for launch to all lenders. That the detailed terms of the restructuring were incorporated in Term Sheet which was despatched to all lenders on 25-1-2001 for their approval. A large majority of the existing lenders have approved the term Sheet incorporating the detailed terms of the restructuring.

( 2 ) THE Company filed Company Application No. 160 of 2001 for requisite directions for convening meeting of the various classes of Creditors of the Company. Vide order dated 13-6-2001 the Court directed the Company to convene meeting of its various classes of creditors for the purpose of considering and if thought fit approve with or without modifications, the arrangement embodied in the Scheme of Arrangement. The order further directed Mr. A. L. Shah, Advocate and failing him Mr. A. C. Gandhi, Advocate to act as Chairman of the meeting of the Classes of Creditors of the Company, i. e. unsecured creditors, working capital lenders and secured creditors of the Company and to report the result thereof to this Court. Necessary notices of the meeting together with copy of the Scheme, explanatory statement and form of proxy were individually sent to each of the creditors of the company; that on 13-7-2001 meeting of each of the class of creditors of the Company was held at the Registered Of