9911796707
TMI Blog1994 (10) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... reas the petitioner, Mahavir Weaves (P.) Ltd. in Company Petition No. 23 of 1994 is the transferee-company. They are respectively referred to as the transferor-companies and transferee-company in this judgment. The two transferor-compa- nies are sought to be amalgamated with the transferee-company. 3. The main objects of the transferee-company and the transferor- companies are also set out in the petitions. The main objects of transferor- company, Mahavir Fabrics (Surat) (P.) Ltd., inter alia, are to carry on business comprising all activities connected with manufacture and/or process of cotton, blended and synthetic yarn and cloth which include spinning, crimping, texturising, twisting, carding, combing, weaving, dyeing, printing and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered hereafter. The Official Liquidator who was required to submit his report under the provisions of section 394(1) has submitted his report, and he has no objection to the grant of scheme of amalgamation inasmuch as the affairs of the company have not been conducted in any manner prejudi- cial to the interest of the companies or to the public interest. 6. It would, therefore, be appropriate to consider now the objections of the Central Government as displayed in letter dated 26-9-1994, placed on record by the learned additional standing counsel. The objections con- tained in this letter are treated as the objections for the purpose of the same being considered by this Court without insisting upon any affidavit in reply in support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed in their resolution passing the scheme. It is the duty of the Court to examine the scheme and to see whether there has been compliance with the provisions of law. The scheme must conform to the standard of reasonable- ness, having regard to all the information that may be available. The commercial advantage, and the parties who stand to benefit there- by, are matters which cannot be left to the exclusive decision of the persons attending the meeting. It is further observed that the shareholders and creditors have approved of a scheme should normally carry great weight. The Court has, however, to examine the scheme with a view to see whether independent and honest member of the company while wisely acting in respect of his own inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration, come to the conclusion that the ratio of 5:2 for allotment of shares was fair and equitable, and that a scheme of amalgamation may be open to criticism, but unless it was affirma-tively shown that the scheme was unfair, the Court would not interfere. 9. Having heard the learned additional standing counsel on the aforesaid three authorities, it was pointed out to him that in none of the aforesaid three cases private limited companies were concerned. His attention was drawn to the fact that, in the present petition, the members are belonging to families and they have consented to the sanction of the scheme without there being any exception. Besides, the companies were having their operations almost intermingled with each ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flowing from the said decisions applies to the present matters with greater force. 10. The second objection reads : "it may further be submitted to the Hon'ble Court that as on the 'appointed date', viz., 1st April, 1993, the authorised share capital of the transferee-company is not sufficient to give effect to the said scheme. The appointed date, therefore, needs be suitably amended." With regard to the above objection, it has been submitted by Mr. Jayant Patel, the learned additional standing counsel, that the authorised capital of the transferee-company having not been increased as on appointed date, the scheme cannot be effected. In reply, it has been submitted by Mr. Soparkar that in no amalgamation matters, the share capital of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amalgamation highly depend upon the terms of the scheme of amalgamation proposed. In this view of the matter, and particularly, bearing in mind the statement made at the bar by Mr. Soparkar that the authorised capital has already been increased so as to give effect to the scheme of amalgamation by following due procedure of law, there is no reason why the sanction be not accorded. It is no doubt true when Mr. Jayant Patel, the learned addition- al standing counsel for the Central Government, submits that authorised capital has got to be increased so as to give effect to the scheme of amalgamation and if authorised capital is not increased, it is obvious that the scheme cannot be given effect to. Therefore, if, in fact, the authorised cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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