9911796707
TMI Blog1998 (4) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... der: "( i )To manufacture, process, produce, make, package, bottle, import, buy, sell, supply, stock, distribute, trade in and carry on business in and deal in all types of goods, food and beverage products including snack foods, fruit products, vegetables products, potato products, cereal products, milk and malted foods, aerated, non-aerated and soft drink beverages and mineral waters including caramel, sugar, syrups and concentrates required therefor, dairy products, coffee, tea, cocoa, spices, cashew and all types of crops and plants. ( ii )To undertake research in the fields of agriculture, horticulture, and plantation particularly to develop, grow, raise and process improved varieties of seeds and planting materials and to buy, sell, import, supply, stock distribute and deal in seeds and planting materials. ( iii ) To carry on trade or business of buying, selling, importing, expor-ting, supplying, stocking, distributing and dealing in all types of goods and products mentioned above." 2. On the other hand, the transferor Sunrise Products is a company which is inter alia engaged in the business of manufacture and production of soft drinks, an object which is akin to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rily explained as to why the capital base of only the transferee-company has been expanded by converting loans into capital and why a similar procedure was not followed in the case of the transferor-company. The learned counsel for the Regional Director has further contended that the affairs of the transferee-company were not being conducted in the public interest. On the other hand, the learned counsel appearing for the petitioner has submitted that the transferee company converted its debt liability into share capital thereby increasing its share capital from Rs. 10 lakhs to Rs. 8.10 crores in the first instance, and subsequently to Rs. 27.10 crores. Therefore, the assumption of the Valuer has been turned into reality. The learned counsel has also contended that the conversion of loans into equity cannot be found fault with. It is pointed out that the Regional Director in his affidavits filed on 3-11-1997 and 6-12-1997 failed to disclose that the loans had been actually converted by the transferee-company into share capital. The learned counsel has canvassed that the affidavits of the Regional Director suffer from concealment of facts. However, the learned counsel for the Regiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same. These facts are not disputed by the learned counsel for the Regional Director. It is also not disputed on both sides that there are only three shareholders of the transferee-company and one of them is Pepsico India Holdings Ltd. From the report of the Chairman dated 26-7-1997, all the three shareholders attended the meeting in person or through their authorised representatives. The shareholders approved the scheme of amalgamation unanimously. It is also not in dispute that there are only eight creditors of the transferee-company and seven were represented in the meeting through their authorised representatives. All the creditors present at the meeting approved the scheme unanimously. Thus, the shareholders and creditors of the company have not found any fault with the scheme of amalgamation. I am told by the learned counsel for the petitioner that the shareholders and creditors of the transferor-company have also approved the scheme of amalgamation and the Calcutta High Court has already sanctioned the scheme. Since the shareholders and creditors of both the companies did not find fault with the scheme of amalgamation and are satisfied with the exchange ratio as determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lent purposes or statutory formalities for convening and holding of the meeting of the shareholders and creditors of the transferee-company were not complied with or the scheme of amalgamation was not approved by them with requisite strength. All that has been pointed out by the learned counsel for the Regional Director is that the Valuer while fixing the share exchange ratio assumed the conversion of the debt liability of the transferee' company into its share capital. But criticism of the learned counsel is of no avail to him as the debt owed by the transferee-company has been actually and in reality converted into share capital. This being the share exchange ratio comes to 1:1. This calculation has not been disputed by the learned counsel for the respondent. The grievance of the Regional Director as already noticed is that upto the date of Valuer's report the loans had not been converted into share capital and the Valuer had assumed the conversion of the loan into share capital and on that basis he had arrived at the abovesaid share exchange ratio. Since as a matter of fact and undisputedly the loan has been subsequently converted into shares the grievance of the Regional Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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