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Issues:
Company petition for amalgamation under sections 391 and 394 of the Companies Act - Consent of shareholders and creditors - Objections raised by dissenting shareholders - Sanction of the proposed scheme of amalgamation. Analysis: The company petition was filed for the amalgamation of two companies, Shriniwas Fertilisers Ltd. (SFL) as the transferor-company and Khaitan Chemicals and Fertiliser Ltd. (KCFL) as the transferee-company under sections 391 and 394 of the Companies Act. The petition stated that both companies were under the same management and engaged in the fertiliser base business, seeking amalgamation to reduce administrative expenses and operate more effectively. Meetings of shareholders and creditors were convened as directed by the court, and the Chairman submitted a report confirming consent for the proposed amalgamation, except for a few dissenting shareholders. The Official Liquidator and Registrar of Companies also reviewed the scheme and found no prejudicial conduct in the affairs of the companies. The court noted that most shareholders and creditors had consented to the amalgamation, except for a few dissenting shareholders. Despite being given notice, the dissenting shareholders did not appear or submit objections. The court emphasized that the objections must specify their nature and sustainability, and in the absence of any illegalities, the wishes of the majority should prevail as per sections 391 and 394 of the Companies Act. The proposed merger was viewed as administrative and aimed at enhancing operational efficiency and reducing expenses without adversely affecting creditors' rights or shareholders' dividends. After considering the arguments of the parties and examining the case record, the court found no infirmities or illegalities in the proposed scheme of amalgamation. It was observed that the scheme was not designed to defeat creditors' or minority shareholders' rights, as the majority had approved it. The court granted sanction to the merger, overruling the objections raised by the dissenting shareholders/creditors and directing the implementation of the scheme. The court emphasized that the scheme safeguarded creditors' rights and shareholders' interests, ensuring that existing liabilities and dividend payments remained unaffected. A separate order was passed in accordance with the rules, and the petitioners were directed to pay the standing counsel's fees for the Central Government.
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