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Approval of scheme of amalgamation under section 394 of the Companies Act, 1956. Analysis: 1. The petitions were filed for approving the scheme of amalgamation under section 394 of the Companies Act, 1956, where Balaji Foods & Feeds Ltd. (the transferor company) was proposed to be merged with Venkateswara Hatcheries Ltd. (the transferee company). 2. Details of the equity share capital and main objects of both the transferor and transferee companies were provided. The transferor company faced significant losses due to various market factors, leading to the decision to merge with the financially sound transferee company to protect the interests of creditors, shareholders, and employees. 3. The scheme of amalgamation outlined the transfer of all assets and liabilities of the transferor company to the transferee company. It specified the treatment of profits, incomes, losses, and expenditures post-merger. Additionally, it detailed the conversion of equity shares of the transferor company into preference shares of the transferee company for the shareholders. 4. Meetings of equity shareholders of both companies were held to approve the scheme of amalgamation. The majority of shareholders in both companies approved the scheme in their respective meetings, ensuring compliance with the statutory procedure. 5. The official liquidator and the Regional Director, Company Law Board, did not raise objections to the scheme. Affidavits confirmed that the affairs of the transferor company were not prejudicial to the interests of members or the public. The Central Government did not oppose the petitions, indicating no objections to the proposed scheme. 6. The court found that the statutory procedure had been substantially complied with, and the scheme was approved by an overwhelming majority of equity shareholders in both companies. The court deemed the amalgamation just, fair, and reasonable, without being contrary to public policy, leading to the approval of the petitions. 7. The final order directed the transfer, vesting, and merger of the transferor company with the transferee company, effective from a specified date. The Registrar of Companies was instructed to take necessary actions to treat the companies as merged and publish the approved scheme in designated newspapers. Interested parties were granted the right to seek appropriate directions from the court if needed. 8. Both petitions were allowed, confirming the scheme of amalgamation and facilitating the merger of the two companies as per the approved terms. This detailed analysis covers the approval process, financial aspects, shareholder meetings, regulatory compliance, and final directives outlined in the judgment regarding the scheme of amalgamation under section 394 of the Companies Act, 1956.
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