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Amalgamation under Chapter V of the Companies Act, 1956 with the transferee company seeking sanctioning of the scheme of amalgamation. Valuation of shares using different methods and objections raised by the Regional Director, Company Law Board, Kanpur regarding the exchange ratio. Approval of the scheme of amalgamation by shareholders of both companies and the role of the court in ensuring fairness and public interest. Analysis: The judgment pertains to a petition seeking amalgamation under Chapter V of the Companies Act, 1956, where the transferee company aims to amalgamate with the transferor company in accordance with the scheme of amalgamation. The court dispensed with the meeting of shareholders of the transferee company but required a meeting of creditors. The transferee company filed a petition for sanctioning the scheme of amalgamation, and notices were duly published as per court directions. The Regional Director, Company Law Board, Kanpur raised objections to the valuation methods used for determining the exchange ratio of shares between the companies. The Regional Director contended that different valuation methods should not be adopted for the shares of the respective companies. However, the court cited previous judgments allowing for the adoption of various valuation methods in the absence of fraud or mala fides. The court emphasized that as long as the shareholders of both companies unanimously approved the scheme of amalgamation and the exchange ratio, interference was not warranted. Previous court decisions were cited to support the principle that shareholders are the best judges of the exchange ratio, and their approval signifies fairness and reasonableness. Regarding public interest, the court highlighted that the Regional Director did not assert that the exchange ratio was contrary to public interest. The objections raised were related to potential adverse effects on the shareholders of the transferor company. The court noted that undervaluation, if any, primarily benefited the shareholders of the transferee company and did not impact public interest. Ultimately, the court sanctioned the scheme of amalgamation, declaring it binding on the shareholders and creditors of the transferee company. The effective date was determined, and compliance with filing requirements was mandated. The court concluded that there was no basis for interference, as the scheme was deemed fair and not detrimental to any party's interest or public interest.
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