9911796707
TMI Blog1996 (12) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... products etc. It is at present engaged in sale and manufacture of minerals, charcoal, machinery, etc. The main objects of the transferee company are manufacture of manganese, calcium carbide, etc. It is at present engaged in manufacture and sale of ferro alloys, sugar and machine building. The transferor company seeks to amalgamate with the transferee company as the result of amalgamation will benefit their optimum utilisation of raw materials, high value spares, consumables, high rate of electrical equipment, etc., resulting in saving of considerable amounts and helping expeditious and economical implementation of expansion projects. In the connected Company Application Nos. 173 and 174 of 1996, this Court directed convening of the meeting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as regards the residual lock-in period in respect of 6,07,900 shares of the transferor company which was a condition stipulated by the Securities and Exchange Board of India at the time of issue of shares to the public by the transferor company through the prospectus. Another objection is that consent of the secured and unsecured creditors of the transferor company has not been obtained. 3. The Registrar of Companies has filed a counter raising only one objection, viz., that the scheme is silent as regards the fair price at which the shares of the transferor company held in the transferee company will be disposed of. 4. The transferor company filed a reply to this, giving the particulars of the outstanding dues to the creditors, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n conducted in any manner prejudicial to the interests of its members or that of public interest, even on the merits, the Companies Act does not require any notice to the creditors of the transferor company. The proposal or amalgamation is widely advertised in newspapers and no creditor either secured or unsecured has filed any objection in this Court. Further, the creditors of the transferor company will not be prejudiced in any way as they will have a financially stronger company as their debtor. 6. Mr. C. Kodandaram relied on Coimbatore Cotton Mills Ltd., In re [1980] 50 Comp. Cas. 623 (Mad.); Telesound India Ltd., In re [1983] 53 Comp. Cas. 926 (Delhi) and Mafatlal Industries Ltd., In re [1995] 84 Comp. Cas. 231 (Guj.). In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Swamidurai did not pursue this contention further." (p. 644) 7. To the same effect is the decision of the Delhi High Court in Telesound India Ltd., In re [1983] 53 Comp. Cas. 927, which reads as follows: "Whether the creditors of a transferor company, and any other persons having interest in the transferor company, or interested in its business assets or any contract with it, other than the members of it, were entitled to vote on a scheme for its amalgamation with another, by virtue of the fact that on amalgamation, their interest may in some way be affected, in that on amalgamation they would all be compelled to deal, in substitution of the transferee company, with the amalgamated company, and in the case of formation of a new com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is being amalgamated, were not entitled as of right at any stage to participate in the process of the consideration or the sanction of any compromise or arrangement proposed between the company and its members, which may eventually result in the amalgamation of the company by its absorption in the other or by merger of the two to create the third. There is no provision of notice to the creditors of any such proceedings at any stage, either prior to the making of the order or subsequent thereto, except in so far as the creditors may have notice of it by public advertisement, although the creditors of a company, which is sought to be merged in any other, and completely absorbed in the transferee company would, by the process of amalg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany. In fact, by the proposed scheme of amalgamation the properties, movable or immovable, tangible and intangible, of the transferee company are not going to be affected. The creditors of the transferee company are not, in any way, going to be affected by the proposed scheme of amalgamation as the proposed scheme would result in the increase of all movable and immovable assets of the transferee company and it would not in any way result in transferring or vesting any of the properties of MIL to anyone else. As such, by the proposed scheme of amalgamation the class of creditors of the petitioner company is not going to be affected at all. Under section 391, on an application being made to the court, the court passes appropriate orders to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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