Set of standardized scores, questions requiring only a brief answer would be preferable.

Formal instances of informational interviewing

We shall consider only the formal instances of informational interviewing, those interviews which require careful preparation.

Procedures

Planning: When preparing for an informational interview, the first step is to decide what sort of information is to be sought. This involves two questions: what do we want to know? and how are we going to use the infOlmation? The answer to the first question dictates the subject-matter to be covered by the interview; the answer to the second detelmines the types of questiotions will be asked. From that analysns to be asked. We start, then, with a careful analysis of the topic or problem about which quesis should grow a list of topics and sub-topics which need to be covered during the interview and a subsequent list of questions covering those topics. The wording of questions should be appropriate to the ultimate use of the obtained infOlmation. Development of a news story, for example, necessitates procurement of detailed information; open ended questions thus would be the most useful type. If answers are to be rep0l1ed verbatim or coded into a set of standardized scores, questions requiring only a brief answer would be preferable.

Another decision to be made during the planning stage concerns who is to be interviewed. Occasionally circumstances will dictate that decision; if only one person possesses the information needed, that person must beinterviewed. However, if we are interested in consumer buying preferences, public voting behaviours, or other rather general categories of behaviour, we have to decide which of rather thousands of potential respondents we are going to survey. Gordol1 (1969) suggests four guidelines by which we might choose our intelviewees:

1. Who has the information we' need?

2. Who among these people is accessible-that is, which of them has the time, proximity, and so on that allow us to talk to her or him?

3. Who among the accessible informants is willing to give us the relevant information?

4. Who among the willing, accessible infonnants is most able to provide the information?

A variety of factors may affect the last-named consideration. The informant may have forgotten the information, repressed it because of its traumatic nature, distorted it because of bias or prejudice, or reached improper conclusions which affect the report. Each of these potential problems should be taken into account; where possible, the chosen respondents should have a minimum of these characteristics.

Intelviewers judge the interest, knowledge, and intelligence of a candidate by the questions she or he asks

List of behaviours rated offensive by professional interviewers.

Research by Goetzinger (1954) provides a list of behaviours rated offensive by professional interviewers. The list is rather lengthy: it includes dishonesty, lack of interest, belligerence or impoliteness, evasiveness, overconcern with salary, lack of concentration, lack ofinitiative, indecisiveness, arrogance, feelings of persecution, cynicism, intolerance or prejudice, lateness, limp handshake, unclarity of expression, lack of career planning, lack of acquaintance with the company, lack of maturity, poor moral standards, improper appearance, and overselling of self. While some of these may strike us as trivial, they nonetheless seem important to interviewers and consequently are worth our notice.

In addition to avoiding the behaviours, we can enhance our performances an interviewee by asking intelligent questions. Often intelviewers judge the interest, knowledge, and intelligence of a candidate by the questions she or he asks. We therefore would do well to have in mind several reasonable, carefully thought out questions which would both provide useful infOlmation to us and demonstrate our competence to the intelviewer.

If at the close of the interview no decision has been made concerning our hiring, we should follow up the interview with a personal letter expressing appreciation to the interviewer and sending any additional information which we think might be helpful. Again, this demonsn'ates our interest in the position while providing the intelviewer to respond.

Before leaving our consideration of the employment interview, we want to emphasize the most important element of that situation: honesty. If an interviewer becomes too concerned with selling the organization, or if an interviewee 'becomes too concerned with selling himself, deception, international or accidental, may occur with the result that the company, the employee, or both may ultimately be unhappy. Regardless of the role you are to play in an employment interview, you should be as open as possible, for only through an honest, compiete exchange of information will the best decision be made.

An operation, conducting a market surveyor opinion poll, and questioning a prominent person to develop a news story. This interview type ranges from the most informational requests for information to lengthy, prescheduled sessions of intensive questioning.

Appearance should conform to the expectations of the interviewer

Other principles concerning questioning
during an employment interview include:
1. Give the applicant adequate time to answer questions; do not pressure her unduly.

2. A void questions answerable by yes or no-they provide too little information.

3. A void trick questions unless they are absolutely necessary.

4. A void questions which might violate legislation concerning fair employment practices, such as What is your religion?

5. Allow the interviewee to ask questions.Closing. When ending the interview, either we will be
able to make the decision concerning whether the applicant is hired or we will not. IT we have the power to hire on the spot, and we have reached a decision concerning the candidate, that decision should be carried out: we should either offer the position or terminate consideration. Too often interviewers are reluctant to do the latter and instead use the old line, We'll call you. By keeping the candidate in suspense and perhaps giving her false hope, this procedure can only disappoint her and perhaps engender hostility toward our organization. If we do not have the power to make a decision on the spot, we should explain the situation as truthfully as possible, in such situations we should ,have prepared a standard explanation of the follow-'up procedure to give the candidate, and we should close as neun'ally as possible to avoid giving false impressions. Whatever the ultimate decision concerning a candidate, the letter sent her should be personalized and as pleasant as possible. We still want to maintain her goodwill toward the organization, and some day a position may open for which she is the best candidate available.
such matters, and they will ask us questions designed to detelmine the kinds of decisions we have reached.

First impression at the actual interview are crucial. Research summarized by Wright (1969) demonstrates that interviewers form impressions of the applicant very early in the interview and that those impressions typically determine the ultimate decisions. It is important, then that we be punctual, polite, pleasant, and appropriate in appearance. While we might argue that people ought not to be judged by appearance, the evidence we presented in our discussion of non-verbal communication demonstrates that judgments are l1).ade on precisely that basis. For practical reasons, then, appearance should conform to the expectations of the interviewer. This is not to say that you should sell out by sacrificing YO.ur values to conform to those of the organization; if you do not like the organization's requirements, you should apply somewhere else. If you do decide you want to become part of that organization, you should expect to conform to some of their expectations.

Idle chatter occasionally is effective in relaxing the interviewee and creating a good atmosphere,

If the applicant seems particularly nervous, an open-ended question may allow her time to relax

Before each interview the interviewer should review the information at hand concerning the applicant. The interviewer should read any application forms, resumes, and letters of recommendation to determine what information about the applicant she or he possesses and what additional data is needed. By so doing the interviewer will be better able to tailor the questions to the applicant and to avoid asking questions wnich solicit information already in hand.

Beginning: The applicant should be greeted warmly by name, and the interviewer should introduce himself so that the applicant knows what form of address she should use. When beginning the interview, the interviewer may engage the respondent in friendly conversation to "break the ice" or he may begin immediately to question her. Although idle chatter occasionally is effective in relaxing the interviewee and creating a good atmosphere, it often backfires. Tension and suspense may grow, valuable time may be wasted, and the interviewee may become suspicious of the interviewer's motives for engaging in small talk. Thus it generally is advisable to begin immediately with questioning. If the applicant seems particularly nervous, an open-ended question may allow her time to relax. If nervousness is not apparent, direct, restricted questions may be appropriate.

Questioning: The nature and use of question types has been detailed above, but further cautions are needed concerning the interviewer's behaviours. The fundamental principle underlying these 'action is this: the interviewee is trying to please the interviewer and will say and what she thinks the interviewer likes. This principle becomes crucial when we consider the interviewer's responses to the interviewee's answers. If he responds favourably to some behaviour, that behaviour probably will increase; if he responds negatively, the behaviour will disappear. As interviewers we must be aware of our own behaviours because of their potency in the interview situation; we should use those behaviours to encourage desired responses but not to condition the applicant's verbal behaviours.

Employment interview should be to provide honest, comprehensive information

Unsatisfactory employer-employee relationship
A candidate who successfully sells herself to a compan will be unhappy if that company discovers that she IS notqulified r fit for the position. Similarly, a company WhICh receIves an applicant in order to hire him will have an unhappy employee when the truth emerges. Thus the third purpose of the employment interview should be to provide honest, comprehensive information. The interviewer must allow the interviewee to decide whether he wants to join the company as it is ; the interviewee must allow the interviewer to decide whether to hire her as she is. Deception or omission by either party usually leads to an unsatisfactory employer-employee relationship.

Procedures: Taken chronologically, the steps of the employment interview include planning, beginning, questioning, and closing.

Planning: The first step in planning an employment interview is to determine the criteria by which applicant will be judged. Shouksmith (1968) emphasizes the importance of detelmining the "critical requirement" for a job and suggests that four to six factors or abilities be listed to assess interviewees. In hiring a receptionist, for example, we might determine that the factors most necessary for success are friendliness, politeness, attractiveness, and intelligence; we then would look for someone possessing those traits. The interviewer must know what kind of person she or he is seeking, and developing a list of critical requirements seems to be a useful method for specifying desired traits.

A second step on the planning stage involves selecting the types and sequence of questions to be llsed. This step is somewhat controversial; some writers argue that each interview should be tailored spontaneously to the

individual applicant. Research suggests, however, that many advantages lie with careful preparation. Wagner.(1949) and Mayfield (1964) both found that highly structured interviews allow the interviewer to make more reliable judgments among all the interviews she or he conducts; hence the interviewer is more likely to select the best candidate. Although some flexibility is necessary within each individual interview, the interviewer therefore should plan the general outline which the interview will follow.

Interview type from the viewpoints of both the interviewer and the interviewee

The Employment Interview

Employment interviews are among the most important types of interviews an organization conducts. These interviews, which according to Taylor occur at a rate of more than ten million per year, detelmine whether the organization hires the best individual available or whether they hire someone detrimental to the organization. For the interviewee, such interviews detelmine whether or not one is employed. Obviously, a bad employment interview can be disasu'ous both to the organization. who may hire the wrong person, and to the interviewee, who may end up unemployed. We shall therefore consider this interview type from the viewpoints of both the interviewer and the interviewee.

Altough the goal of the employment interview appears ObVlOus--to fIll or obtain a job-there are in fact some rther subtle purposes which ought not to be neglected. FIrst, the employment interview seeks information which cannot be presented in an applicant's resume or in a brochure describing the organization. The interviewer must make judgments about the applicant's personality, character and attitude-things difficult to ascertain from written documents. The applicant similarly must judge the climate of the organization, its attitudes towards its employees and the general public, the working situation, and so on, to determine whethr working there would be a pleasant experience. Again, brochures or organizational propaganda typically do not allow such judgments.

A second purpose of the employment interview is to create and maintain goodwill for the organization. Often the applicant's sole contact with a company is in an employment interview. If that experience is unpleasant, the interviewee's attitude toward the company probably will be unfavourable, as will the attitudes of other people with whom the interviewee has contact. Therefore, even though an appiicant is clearly unsuited for the available position, the interviewer must make the experience as pleasant as possible for the interviewee; failure to do so could
seriously undermine the company's public relations eff011s.

A third pmpose is the reverse of the first: to provide information. Too often applicants and interviewers take anattitude which might be characterized as: Well want him them to want us/me. This is dangerous attitude.

Quifltamensional sequence presents five ordered question types

Where these five sequence types are based upon the use of resu'icted or unrestricted questions, another type of sequence has been developed that takes into account the types of information the interviewer seeks. Constructed by George Gallup, the quifltamensional sequence presents five ordered question types, each signed to elicit pal1icular responses:

1. AWal'eness-What does the respondent know about the situation?

2. General Attitudes-What points of view is he aware of conceming that situation?

3. Specific Attitude-What point of view does he himself hold?

4. Reasons-Why does he hold that view?

5. Intensity-How strong is his attitude?

In infOlmational intelviews this sequence type seems quite useful in providing a comprehensive view of the respondent's knowledge about and feelings toward a certain situation.

Selection of a question sequence, then, is based largely upon our purpose in the interview and the interviewee's attitude toward us. A reluctant respondent may require use of an inverted pyramid sequence for aU or part of the interview period; a disagreeable interviewee may be persuaded through use of a diamond sequence. If infonnation is sought from a willing respondent, the tunnel or quintamensional sequences may be best. As interviewers we must assess the situation as quickly as possible and adjust our questioning accordingly.

Types of interviews

Interviews differ according to their pW"]Joses and settings, and each interview type presents unique problems and opportunities. We shall now consider in some detail several of the more common types of interviews: employment. informatjgnal, counselling, appraisaL disciplinary, persuasive, axis interviews. We shall review the pUl"]Joses of each type of interview and the procedures by which achievement of those pUl"]Joses migh t be facilitated.

Five types distinguishable by their use of restricted and unrestricted questions

Biased questions also are useful if we are trying to test the respondent. We can determine how independent he is, how well he responds under stress, or how prone he is to provid socially approved responses. For example, if we asked. Are you a sexist? or Are you prejudiced against women in business? he probably would answer no even if he did harbour such prejudices. If, however, we asked, Women really are too emotional to be good administrators, aren't they? we might elicit a true attitude which otherwise might have been suppressed. In any of these situations the biased question, properly applied, would be more useful than an unbiased inquiry.

Question Sequences

Our final consideration here is the order in which questions are to be posed during an interview. While a virtually infinite number of sequences could be identified,

we shall consider five types distinguishable by their use of restricted and unrestricted questions.

The first type of sequence, the pyramid, begins with unrestricted questions and builds upon them with questions of increasing restrictedness. We might begin by asking a general question about the interviewee's attitude toward work and then become increasingly specific by focusing on particular aspects of the interviewee's position, moving perhaps from conditions in general to her to his supervisors and to one paticular supervisor. Rather than focus immediately upon a specific topic which may be personal or difficult for the interviewee to discuss, then, this technique begins with unrestricted questions which are relatively easy to answer and gradually narrows down to more sensitive areas. If the respondent does not touch upon certain areas of interest, the pyramid may be useful in gaining that specific infalmation

A second sequence, the inverted pyramid, is the reverse of the first. The interviewer begins with specific restricted questions and gradually moves to more general:

unresnicted inquiries. This technique is pat1icularly useful when the respondent is reluctant to talk, for often one can be motivated by a restricted question in an area that interests one and, once one begins talking, can be directed toward more general considerations.

The third and fourth sequence types involve

combinations of the first two. The diamond sequence begins with restricted questions, moves to unrestricted inquiries, and then narrows again to a specific -topic through a series of increasingly specif?c questions. If, for example, we were counselling an employee, we might begin with a situation analogous to his. Through resnicted questions, his feelings and thoughts about that situation could be elicited and converted into general principles as the questions become increasingly open. Then, to apply those principles to the interviewee's own situation, a series of questions increasing in restrictedness would again focus the conversation. An alternative to this procedure is the hourglass sequence, in which unrestricted questions become increasingly resnicted and are then followed by questions which again become increasingly open. Suppose we are interviewing a supervisor who has been sharply criticized by her subordinates for her heavy-handed tactics. We might begin the interview with a discussion of human
motivation in general, gradually nan-ow the topic to her specific situation, and then become general again defining principles of appropriate managerial behaviour. This pe of sequence often is useful in changing both the specIfic behaviours and general attitudes of the interviewee.A fifth type of sequence is the tunnel. Interviews of ,his sort employ questions all of the same degree of
trictedness. If we are interested only in the spontaneous ;'

reactions of the interviewee, this sequence may be useful; if, however, we want in-depth information, attitudinal or behavioural change, or a sharing of deep emotions, one of the other formats would be more appropriate.

Aware of the nature and influence of biased questions

Question Bias

A second distinction among question types can be made on the basis of bias. Most of us probably are familiar with the story of the politician who publicly asked his opponent, "Have you stopped beating your wife?" Often questions such as these occur in interpersonal situations as well. You do want to join the union, don't you? and How do you feel about those stupid shop rules? are questions that carry as many leading implications as Have you stopped beating your wife? While questions like these may not produce serious problems in everyday conversation, they have definite impact in interviews. To conduct interviews effectively we must be aware of the nature and influence of biased questions.

As with restricted and unrestricted questions, unbiased and biased inquiries range along a continuum from very unbiased to highly biased. The examples used in the preceding section typify unbiased questions. Inquiries such as How do you feel about your job? say virtually nothing about the interviewer's own feelings; the question is stated neutrally. Somewhat more leading is the question. You like to work with machines, don't you? And, at the very biased end of the scale, Do you support our suike, or are you dirty pinko commie scab? Because these three

. questions vary in their revelations of the interviewer's feelings, they exert different degrees of pressure upon the interviewee to respond appropriately.

In deciding whether to use biased, moderately biased, or unbiased questions, we first must take into account our purpose in the interview. If we are seeking the interviewee's true feelings or attitudes, we probably would avoid biased questions If, however, we are trying to persuade the interviewee, biased questions can be extremely useful. Research in attitude change suggests that if we can get an interviewee to state a certain opinion, he is likely to adopt that opinion as his own. Thus, if the interviewee initially has no intention of SUPP011ing our strike but, because of social pressure, responded yes to our "dirty pinko commie scab" question, he would be much more likely to support the strike when it actually

occurs.

Explain briefly the powers of liquidator to disclaim onerous property

Disclaimer to be in Writing. The disclaimer shall be in writing and shall be made within 12 months after the commencement of the winding-up.

However, where any onerous property has not come to the knowledge of the liquidator within one month after the commencement of the winding-up, the power of disclaiming the property may be exercised at any time within twelve months after he has become aware thereof or such extended period as may be allowed by the Court.

The disclaimer shall operate to determine in respect of the property disclaimed, the right, interest and liabilities of the company as from the date of disclaimer. It shall also release the company and the property from liability, but it shall not affect the rights or liabilities of any other person in respect of that property.

Liquidator to Decide Disclaimer Within 28 Days. The liquidator shall not be entitled to disclaim any property when he has not taken any action on the application of any person interested in the property within 28 days requiring the liquidator to decide whether he will or will not disclaim [Sec. 535(4)].

Powers of the Court. The court, before or on granting leave to disclaim, may require notices to be given to persons interested in the property and may impose such conditions, as it thinks fit [Sec. 535(3)].

The court may also, on the application of any person who is, as against the liquidator, entitled to the benefit or subject to the burden of a contract made with the company, make an order rescinding the contract. The rescission shall be on such terms as to payment, by or to either party, of damages for the non-performance of the contract, or otherwise, as the court thinks just. Any damages payable under the order to any such person may be proved by him as a debt in the winding-up [Sec. 535(5)].

Further, the court may, on application by any person who claims any interest in any disclaimed property, make an order for the vesting of the property in the person entitled thereto [Sec. 535(6)]. However, where the property disclaimed is of a leasehold nature, the court shall not make a vesting order in favour of any person claiming under the company, whether as under-lessee or as mortgagee or holder of a charge except upon the terms of making that person

(a) subject to the same liabilities and obligations as those to which the company was subject under the lease in respect of the property at the commencement of the winding-up; or

(b) if the court thinks fit, subject only to the same liabilities and obligations as if

the lease had been assigned to that person at that date.

Injured Party Deemed to be a Creditor. Any person injured by the operations of a disclaimer under Section 535 shall be deemed to be a creditor of the company to the amount of the compensation or damages payable in respect of the injury and may accordingly prove the amount as a debt in the winding-up [Sec. 535(7)].

Powers of the Liquidator Without the Sanction of the Court Besides the powers as aforesaid

Powers of the Liquidator Without the Sanction of the Court Besides the powers as aforesaid, the liquidator shall have power:

(i) to do all acts to execute, in the name and on behalf of the company, all deeds,

receipts, and other documents, and for that purpose to use, when necessary,

the company’s seal;

(ii) to inspect the records and returns of the company on the files of the Registrar

without payment of any fee;

(iii) to prove, rank and claim in the insolvency of any contributory, for any balance against his estate, and to receive dividends in the insolvency, in respect of that balance, as a separate debt due from the insolvent, and rateably with the other separate creditors;

(iv) to draw, accept, make and endorse any bill of exchange, hundi or promissory note in the name and on behalf of the company, with the same effect with respect to the liability of the company as if the bill, hundi or note had been drawn, accepted, made or endorsed by or on behalf of the company in the course of its business;

(v) to take out, in his official name, letters of administration to any deceased contributory, and to do in his official name any other act necessary for obtaining payment of any money due from a contributory or his estate which cannot be conveniently done in the name of the company, and in all such cases money due shall, for the purpose of enabling the liquidator to take out the letters of administration or recover the money, be deemed to be due to the

‘liquidator himself;

(vi) to appoint an agent to do any business which the liquidator is unable to do

himself.

Contributory’s Right of Set Off

Can the amount due to a member by way of dividends, share of profits or otherwise be adjusted towards the amount due against him as a contributory? Section 426(1)(g) provides that a sum, as aforesaid, shall not be deemed to be a debt of the company (in liquidation) payable to a member and therefore it cannot rank in competition with the amount due to other creditors [Rajeshwar Prasad Vs. Simla Banking and Industrial Company Ltd. (1955) 25 Compo Cas. 476 (Punj.)]. Dividends due cannot be adjusted against amount due as contributory [Rajeshwar Prasad’s case (supra)].

19. State the (!>osition and powers of the liquidator in winding-up proceedings.

.9Lns. According to Section 457 of the Companies Act, 1956, the liquidator can exercise certain powers with the sanction of the Court. He also has certain powers which he can exercise on his own, i.e., without the sanction of the Court.

Powers of the Liquidator With the Sanction of the Court

These powers include:

(a) to institute or defend any suit, prosecution or other legal proceeding civil or

criminal, in the name and on behalf of the company;

(b) to carry on the business of the company so far as may be necessary for the

beneficial winding-up of the company;

(c) to sell the immovable and movable property and actionable claims of the

company by public auction or private contract, with power to transfer the

whole thereof to any person or body corporate, or to sell the same in parcels;

(d) to raise on the security of the assets of the company any money that may be

required; and

(e) to do all such other things as may be necessary for winding-up the affairs of

the company and distributing its assets.

• Non payment of salary to an employee-whether a debt

The High Courts of Madhya Pradesh, Andhra Pradesh and Bombay have offered different opinions. Whereas Madhya Pradesh and Bombay High Courts in Pawan Kr. Khullar v. Kaushal Leather Board Ltd. (1996 MP), and Indo French Time Industries Ltd. In re [2002] respectively have held that payment of salary to an employee is not a debt, the Andhra Pradesh High Court said that unpaid salary of an employee is also a debt -Capt. B.S. Damagry v. VIF Airway Ltd. (1998 AP).

· The inability to pay debts should be interpreted in the commercial sense of company being unable to meet current demands though the company may have large assets (Tripura Admn. v. Tripura State Bank Ltd. (1960). The company buried under heavy losses was ordered to be wound up though the demand was not immediately due as it was felt that t.o wind up such a company would be an act of social service by preventing directors enriching themselves at the expense of petty shareholders (Navjivan Trading Finance (P.) Ltd., In re (1978). However, the fact that liabilities exceed assets does not necessarily mean that the company is unable to pay its debts. It may still be in a position to meet the demands of the creditors as and when they are made. (ROC Punjab, Himachal Pradesh and

Chandigarh v. Atlas Transport (P.) Ltd. (1974).

6. Just and Equitable. The Court may also order for the winding-up of a company if it is of opinion that it is just and equitable that the company should be wound up. In exercising its power on this ground, the Court shall give due weightage to the interest of the company, its employees, creditors and shareholders and the interest of the general public. A few of the examples of ‘just and equitable’ ground on the basis of which the Court may order the winding-up are given below:

(i) When the Substratum of the Company Has Gone. The substratum of a company is deemed to be gone where its main purposes have failed or become impossible of achievement (Re Bleriot Aircraft Co.). However, a temporary difficulty which does not knock out the company’s bottom shall not be permitted to become a ground for liquidation (Re. Shah Steam Navigation Co.).

Explain the terms ‘reconstruction’ an ‘amalgamation’.

Who is a dissenting shareholder in case of amalgamation of companies?

Explain the provisions of the Companies Act with regard to the acquisition

of shares of dissenting shareholders. fC.A. (Final) May, 1986]

f1Lns .

(a) Meaning of Reconstruction

The term ‘reconstruction’, inter alia, indicates the process which involves (i) the transfer of undertaking of an existing company to another company, usually incorporated for the purpose. The old company ceases to exist. However, all the assets might not pass to the new company; (ii) the carrying on of substantially the same business by the same persons; (iii) the rights of the shareholders in the old company are satisfied by their being allotted shares in the new company.

A reconstruction is made for any of the following purposes:

(i) To Extend the Operations of the Company. If the shares are fully paid up and it is desired to raise further capital, the shareholders in the old company may be issued only partly paid shares in the new company so that by calling up the uncalled amount, the company would have the necessary funds for carrying on its business.

Also, if the company wants to do business which is totally unrelated to its objects, it may resort to reconstruction. The objects clause of the new company may include the business which it wants to pursue.

(ii) For Purposes of Reorganisation. It implies alteration or modification of the rights of shareholders or creditors or both.

There is also the concept of internal reconstruction, wherein the company continues to exist and operate with adjustments of rights of shareholders and/ or creditors, lender, etc. In such a reconstruction always some sacrifice is pn’!sent for members and creditors to enable the company to operate as a going concern.

Meaning of Amalgamation

Amalgamation is the blending of two or more undertakings into one undertaking, the shareholders of each blending company becoming substantially the shareholders of the other company which holds blended undertakings.

What is Debt

· ‘Debt’ means a determined or definite sum of money payable immediately.

It must be an undisputed debt. In case of a dispute, the dispute must be a gem,ine dispute.

· A contingent or conditional liability is not a debt unless contingency or condition

has already happened. * Application money due for refund or the interest thereon is not a debt. * The Punjab and Haryana High Court in the case of Dr. S.J. Sodhi v. c. T. Scan

Research Centre (P.) Ltd. (1995) and again in Pritam Singh Batra v. Deol Agro Oil Ltd. has held that the application money due for refund and the interest thereon is not a debt since the petitioner was not a creditor.

Intonations as to Compromise or Arrangement [Section 393]

Section 393 lays down the following rules regarding providing of information to the

affected persons under a scheme of compromise or arrangement:

1. Where a meeting of the creditors (or any class of creditors), or of members (or any class of members) js called under Section 391, the notice calling the meeting must be accompanied by a statement setting forth the terms of compromise or arrangement and explaining its effect. The statement must, in particular, state any material interest of the diredors, Managing Director or Manager and every trustee of debenture holders of the company, whether in their capacity as such or as members or creditors of the company or otherwise.

2. In case notice calling the meeting is given by advertisement, there must be included either such a statement as aforesaid or a notification of the place t

which and the manner in which creditors or members entitled to attend the meeting may obtain copies of such a statement as aforesaid. Such copies must be furnished by the company free of charge.

3. If default is made in complying with any of the above requirements, the company and every officer of the company who is in default, shall be punishable with fine, which may extend to Rs. 50,000”. The company and its officers can avoid liability if it can be proved that the default in sending the notice and the statement was caused by the refusal of a person responsible to supply the necessary particulars as to his material interests.

Approval of the Court: The Government company

Approval of the Court: The Government company shall approach the Central Government for consent/approval wherever the Companies Act, 1956 provides that the consent of the Court is to be obtained (vide Notification No. GSR 238 dated February 2,1978).

Cognizance of Offences: Sub-section (1) of Section 621 shall be applicable to a Government company with the omission of the words ‘the Registrar or by a shareholder of the company’. So no Court can take cognizance of any offence under the Companies Act, 1956 committed by a Government company or any of its officers in default unless a complaint is made by a person authorised by the Central Government to do so. Thus, discretionary powers are vested with the Central Government to lodge a complaint with the Court of law against a Government company.

Statutory Meeting and Statutory Report: Government companies have been exempted from holding a statutory meeting or filing a statutory report with the R.O.c.

under Section 165.