9911796707
TMI Blog1995 (8) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... The transfer was under section 394 of the Compa- nies Act, 1956 ('the Act'). Both the companies have filed the petitions with a prayer that the scheme of amalgamation of the two companies, namely, the transferee-company and the transferor-company be sanctioned. Petition No. 16 of 1994 is filed by the transferee-company while Petition No. 17 of 1994 is preferred by the transferor-company. Both petitions raise common question and are hence disposed of by this common order. 2. The transferee-company in this case was incorporated some time in September 1987. It was a private company. The registered office of the said company is situated at Hyderabad. The authorised capital of the company is Rs. 5 lakhs, divided into 50,000 equity shares of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the memorandum of association are : 1. To purchase, buy, sell, manufacture, prepare, build in all kinds and varieties of crown caps, all kinds of p.p. caps, bottle caps, seals and closures, cans, boxes, containers, metal components. 2. To purchase, buy, sell, prepare, trade in all kinds of plastic contain-ers, bottles, packing material bags, paper lamination, etc. 3. To form, fill and seal all kinds of material including food and beverages. 4. To print all or any of the packing material. It may be stated that the shareholders and directors of both the compa- nies are related to each other and hold 100 per cent of the equity shares in both the companies. Thus, the transferor-company and the transferee-company belong to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amation of the two companies has the following broad features : 1. From the transfer date, the undertaking of the transferor-company shall without further act or deed be transferred to and be vested or deemed to be vested in the transferee-company as per the provi- sions of the Act subject to all charges, liens, mortgages, lis pendens, if any. 2. If any suit or appeal or other proceedings of whatsoever nature by or against the transferor-company be pending the same shall not abate, be discontinued or be in any way prejudicially affected by reason of the transfer proposed. Such proceedings take into their sweep all types of litigation pending. 3. The transfer and vesting of properties and liabilities and the conti-nuance of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member may be entitled to under other provisions. The scheme also envisages that an account shall be taken of the assets and properties of the transferor-company as on the date of transfer. The difference between the valuation of the assets of the transferor-company on the one hand and the shares to be issued and allotted by the transferee-company and liabilities of the transferor-company on the other hand, shall be applied in the first instance in writing off the miscellaneous expenditure and debit balance of the profit and loss account if any, and the balance shall be treated as general reserve in the books of transferee-company. All the creditors of the transferor-company are to become the creditors of the transferee-company on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic interest. The Court has to consider the scheme as a whole and having regard to the general conditions in text and object of the scheme, the Court has to find out whether it is reasonable and fair. If the Court finds that the scheme of the amalgamation is beneficial to the members of both the companies and the affairs of the company which is going to be dissolved, i.e., the transferor-company, have not been conducted in any manner prejudicial to the interests of members or to the public interest then it is not for the Court to launch any minute investigation upon the commercial merits or demerits of the scheme. The collective wisdom of the shareholders of the company should normally not be interfered with. 6. Now, in the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. It appears that the transferee-company is financially pretty sound and there are no major liabilities which cannot be met. The transferee- company has undertaken to effectively execute the objects of the transferor-company. The very purpose of amalgamation is more efficient working by reducing the overhead expenses. At the cost of repetition it may be stated that the scheme is for the benefit of the shareholders. The shareholders in both the companies are of the same family. It is difficult to envisage any unfairness and unreasonableness in the proposed merger. It is needless to quote the principles laid down from time to time in the matter of granting permission for such amalgamation. They are pretty well-settled and I have extracted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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