9911796707
TMI Blog1992 (3) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised capital is 'Rs. 2 crores divided into 20 lakhs equity shares of Rs. 10 each. Its present issued, subscribed and paid-up capital is Rs. 1.50 crores divided into 15 lakh equity shares of Rs. 10 each fully paid up. The objects of the transferor-company are to manufacture and deal in rubber, tyres and materials which are being used or capable of being used in tyres, tubes and rubber industries and also to manufacture, produce, process, press, vulcanise, repair, retread, re-sole, mould, extrude, regenerate, combine, mix, export and import and deal in all types of tyres, semi-tyres, inner rubber, flaps, medical and dipper rubber products, rubber tiles, toys, rubberised cloth, rubber belts, 0 seals, V belts, moulded and extruded products of commercial, household and industrial uses. The transferee company was incorporated under the provisions of the said Act on May 23, 1985, at Bombay in the name of Vishal Tyres Ltd. with the liability of the members limited by shares. Thereafter, the name of the transferee company was changed to its present name on July 7, 1988. Its present authorised capital is Rs. 2 crores divided into 20 lakh equity shares of Rs. 10 each. The present iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to convene separate meetings of their respective equity shareholders on August 9, 1991, for the purposes of considering and if thought fit to pass with or without modification, the scheme of amalgamation. As directed by the said order dated July 10, 1991, notices of the said meeting were sent individually to all equity shareholders of the transferor company along with copy of the scheme of amalgamation, statement under section 393 of the said Act and a form of proxy. Similarly, as directed by the said order dated July 10, 1991, notices of the said meeting were sent individually to all equity shareholders of the transferee company along with copy of the scheme of amalgamation, statement under section 393 of the said Act and a form of proxy. In pursuance of the said order dated July 10, 1991, a meeting of the equity shareholders of the transferor company was held on August 10, 1991, at Amar Gian Grover Auditorium Lala Lajpatrai College Building, Near Haji Ali, Bombay 400 034. The meeting was attended by 189 equity shareholders either in person or by proxy. The value of the shares held by the number of members who attended the meeting came to Rs. 77,30,000. Out of 189 members, 187 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruments of whatsoever nature to which the transferor company is a party and subsisting or having effect on the appointed day, i.e. , April 1, 1991, shall be in full force and effect against or in favour of the transferee company, as the case may be, and may be enforced by or against the transferee company as fully and effectively as if instead of the transferor company, the transferee company had been a party thereto. It is further stated that on the proposed scheme of amalgamation becoming effective, the transferor company would be dissolved without winding up. Initially, one Kishore G. Nagda, a shareholder of the transferor company holding 100 equity shares of Rs. 10 each of the value of Rs. 1,000 who had voted against the proposed scheme of amalgamation at the meeting of the members of the company held on August 19, 1991, filed his affidavit, being the affidavit dated October 28, 1991, to oppose sanction being accorded by this court to the said scheme of amalgamation of the said two companies. However, at the hearing of the above petitions, the said K.G. Nagda withdrew his opposition and consented to sanction being accorded to the said scheme of amalgamation of the said tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... likely to be prejudicially or adversely affected in any manner whatsoever as a result of the scheme of amalgamation and as such the same should be sanctioned by this court. It is also stated in the said affidavit that the exchange ratio of 1 : 1 has been worked out and certified to be fair and reasonable by N.M. Raiji and Co., Bombay, a reputed firm of chartered accountants and the shareholders of both the said companies have overwhelmingly approved the scheme of amalgamation and the share exchange ratio and this court should sanction the scheme of amalgamation as proposed and should reject the objections raised by the Regional Director. The question for considering is whether the necessary sanction of the court should be accorded to the proposed scheme of amalgamation. Before the court sanctions a scheme under sections 391 and 394 of the said Act, the court should normally be satisfied about the following matters : ( i )that the resolutions are passed by the statutory majority in value and in number in accordance with section 391(2) of the said Act at a meeting or meetings duly convened and held. The court should not usurp the right of the members or creditors to decide whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the audited accounts are available. It is not correct to say that while valuing the shares of both the said companies, the said chartered accountants have disregarded the past earnings of both the said companies and have substituted the estimated future earnings of the companies covering the financial year up to March 31, 1994, with added weightage. The said chartered accountants who are expert valuers have adopted a combination of three well accepted methods to arrive at the fair value of the shares which methods are ( i ) the net worth method, ( ii ) the market value method and ( iii ) the earnings method. In all the said methods adopted by the said valuers the past results are considered. In the circumstances of the case it is incorrect to say that the approach of the said valuers had been contrary to the accepted principles of valuation of shares. There are no allegation of mala fides on the part of the said valuers; so also there are no all allegation of gross undervaluation. The proposed ratio of exchange was specifically placed before the members of the transferor company and was accepted. It is nobody's case that the majority of the shareholders of the transferor com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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