9911796707
TMI Blog2002 (1) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... have also heard Mr. MA Kuvadia learned Official Liquidator. 2. These petitions are for approval of the scheme of amalgamation of New Vision Laser Centers Ltd. ( the Transferor-Company ) with the New Vision Laser Centers (Rajkot) Ltd. ( the Transferee-Company ). The scheme of amalgamation has been approved by shareholders of the transferee-company by giving their written consent. The shareholders and the secured creditors of the transferor-company have given written consent approving the proposed scheme. Hence, the meetings of the shareholders of both the companies and the creditors of the transferor-company were dispensed with as per orders dated 23-3-2001 in Company Application Nos. 82 and 83 of 2001. 3. After the petitions were ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is one legal objection which he is constrained to raise and that is violation of sections 77 and 42 of the Act. It is pointed out that the transferor-company was holding 4,99,980 shares in the transferee-company and that on account of the proposed amalgamation, the transferee-company itself will be holding 4,99,980 shares in the transferee-company. Section 77 provides that, no Company limited by shares, shall have power to buy its own shares, unless the consequent reduction of capital is effected and sanctioned in pursuance of sections 100 to 104. Similarly, section 42 provides that, except in the cases mentioned in the section, a body corporate cannot be a member of the company which is its holding company and any allotment or tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olders and thereafter to go for amalgamation with the transferee-company and in that case, the objection on the scope of alleged violation of sections 42 and 77 could not have been raised at all. It is submitted that if that could be done prior in point of time before amalgamation, there is no reason why the same cannot be done simultaneously as a part of the scheme of amalgamation. 8. In rejoinder, the learned Official Liquidator submits that the facts of the Delhi High Court s case in Himachal Telematics Ltd. ( supra ) were different and the ratio laid down therein is not applicable to the facts of the present case. It is further submitted that if 4,99,980 shares of the transferor-company in the transferee-company were transferred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of the Companies Act, 1956, then the Legislature in its wisdom ought to have added in the proviso to section 394 after the words, "public interest" "or anything inconsistent with other provision of this Act". That being not the situation, in the plain language of section 394, the Court cannot permit the respondent to read a further condition which has not been intended in the section. Three affidavits have been filed by the respondent, except taking objection to the scheme as being hit by the provisions of sections 42 and 77 of the Companies Act, it has not been mentioned how the scheme is against public interest. Rather in one of the affidavits filed by the respondent, the stand of the respondent is that scheme is otherwise in publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission of the learned counsel for the petitioners that the provisions of sections 391 to 394 are not controlled by the provisions of sections 42 and 77. 10. There is also substance in the submission of the learned counsel for the petitioners that the transferee-company could have reduced its capital to the extent of 4,99,980 and over and above 3,22,240 new shares, another 4,99,980 new shares could have been issued to those 20 shareholders in lieu of their holding in the transferor-company, and the practical result would have been the same. Hence instead of issuing 8,22,420 new shares in the transferee-company in favour of those 20 shareholders, the proposed amalgamation envisages issuance of 3,22,420 new shares and 4,99,980 existing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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