N.K.Sud, J.

1. In this reference, we are called upon to interpret Sub-section (2) of Section 391 of the Companies Act, 1956 (for short "the Act") and determine its true meaning and import.

2. This provision reads as under: -

"(2) If a majority in number representing three-fourth in value of the creditors, or class of creditors, or members, or class of members, as the case may be, present and voting either in person or, where proxies are allowed under the rules made under Section 643, by proxy, at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the Court, be binding on ail the creditors, all the creditors of the class, all the members or all the members of the class, as the case may be, and also on the Company, or in the case of a company which is being wound up, on the liquidator and contributories of the company."

3. Company Petition No. 138 of 2003 is a petition under Sections 391(2) and 394 of the Act for sanctioning the Scheme of amalgamation of companies: namely, Swift Formulations Private Limited and Mukur Pharmaceuticals Company Private Limited, with another company: namely, Ind-Swift Limited.

4. As per the provisions of Sub-section (2) of Section 391 of the Act, a majority in number representing three-fourth in value of the creditors/shareholders present and voiting at the meeting, has to agree to this arrangement. In this case, the meetings of unsecured creditors/share-holders of the transferee company were held on 22.4.2003. The meeting of unsecured creditors was attended by 17 creditors representing credit of the value of Rs. 13,48.77,556/-. The total value of unsecured creditors of this company is Rs. 27,19,01,000/-. The arrangement was unanimously approved. Similarly, in the meeting of the share-holders, 38 share-holders representing shares of the value of Rs. 1,25,17,560/- were present at the meeting. 37 share-holders voted for approval of the arrangement, whereas one share-holder holding 100 shares of the value of Rs. 1,000/-voted against it. However, the total value of the issued and subscribed share capital of this Company is Rs. 4,39,50,000/-.

5. When the petition came up for consideration before the Company Judge, a question arose as to whether the arrangement had been approved by the requisite majority as prescribed in Sub-section (2) of Section 391 of the Act or not? It was contended on behalf or the petitioners that since the arrangement had been approved by a majority representing three-fourth in value of the creditors/shareholders present and voting at the respective meetings, the requirement of Sub-section (2) of Section 391 of the Act stood fulfilled. In support of its claim, counsel for the petitioners had placed reliance on the judgment of the Calcutta High Court in re: Hindustan General Electric Corporation Limited, A.I.R. 1959 Calcutta 679, wherein it has been held that the "intention of the framers of this Section was that the majority of the three-fourth value must be of the persons, who were present and who took part in the voting." However, the Company Judge noticed that in CP No. 324 of 2002 in the matter of Euro Cotspin Limited, decided on 11.7.2003, it had been held that three-fourth majority envisaged in Sub-section (2) of Section 391 of the Act has to be of the total value of the creditors/share-holders present and voting at the meeting. Since the Company Judge entertained his doubts about the correctness of the view expressed in the case of Euro Cotspin Limited (Supra) he was of the view that the matter required consideration by a larger Bench for resolving the following question:-

"Whether majority in number as envisaged in Sub-section (2) of Section 391 of the Companies Act, 1956 should represent three-fourth of the value of total creditors/share-holders or of the value of creditors/share-holders actually present and voting in the meeting?"

6. Since in CP Nos. 8, 150, 203 and 223, of 2003, also the same question was inv