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TMI Blog2011 (3) TMI 1483X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany will however follow the Accounting Standard 14 notified by the Central Government in formalising the amalgamation. Appeal allowed. - C.P. NO. 4 OF 2010 - - - Dated:- 1-3-2011 - HRISHIKESH ROY, J. Baskar Sen, S.R. Kakrania, K.R. Surana and J. Khandelia for the Petitioner. R. Sarma for the Central Government. JUDGMENT Mr. Baskar Sen along with Mr. S. R. Kakrania and Mr. K. R. Surana, learned counsel appearing on behalf of the petitioner. Mr. R. Sarma, learned Assistant Solicitor General of India appearing for the Central Government. 2. This is an application under sections 391(1), 393 and 394 of the Companies Act, 1956, for sanctioning the scheme of amalgamation of the Bhuyankhat Tea Co. P. Ltd. (hereinafter refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at paragraph 11 of Part II of the scheme. It is further submitted that the accounting entries/adjustments, as a consequence of the scheme of amalgamation, are to be made as per Accounting Standard 14 notified by the Central Government under section 211(3A) of the Companies Act, 1956. The petitioner-company may, therefore, be directed by the hon'ble court to make suitable amendments in the scheme before sanctioning the scheme. (b) That there is no clause in the memorandum of association of the petitioner-company enabling it to amalgamate with any other company. The hon'ble court may therefore, be pleased to direct the petitioner-company to make suitable amendments in its memorandum of association, before sanctioning of the scheme." 7. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies Act would indicate that amalgamation would be a statutory right in certain cases and in other cases amalgamation would be resorted to by the company on the strength of specific power in the memorandum. For the purpose of the present appeal it need be only said that if a company by virtue of its power in the memorandum desires to amalgamate with another company without coming to a court of law such amalgamation would be valid and there could be cases where a company desiring to amalgamate would have to come to a court of law. The power to amalgamate may flow from the memorandum or it may be acquired by resorting to the statute. Section 17 of the Companies Act indicates that a company which desires to amalgamate with another company wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned by the court. The onus lies heavily on those who oppose the sanction of the scheme to show that the scheme is unfair, unreasonable or fraudulent . . . The contention of the Central Government that inasmuch as the memorandum of association of some of the petitioners does not contain express power to amalgamate with another company, the petition is not maintainable cannot be accepted. In this connection the judgment and decision of the Division Bench of this court in Hari Krishna Lohia v. Hoolungooree Tea Co. Ltd. AIR 1969 Cal 312, 314 ; [1970] 40 Comp Cas 458 may be taken note of. In the aforesaid decision the Division Bench held that the power to amalgamate is a statutory power and this power may be exercised notwithstanding the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statute. Section 17 of the Companies Act indicates that a company which desires to amalgamate with another company will take necessary steps to come before a court for alteration of its memorandum in aid of such amalgamation. The statute confers a right on a company to alter its memorandum in aid of amalgamation with another company. The provisions contained in sections 391 to 396 and 494 illustrate some instances of statutory power of amalgamating a company with another company without any specific power in the memorandum. The said principle seems to me also to be applicable in the present case if the objects clause in the memorandum of association of any of the companies is construed as not to specifically empower any of the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he jurisdiction of the Calcutta High Court have already been sanctioned by the said court. The petitioners have completed all the statutory formalities and the resolution for amalgamation is unanimously approved by the share-holders of the transferor company. The process appears to be fair and no fraudulent exercise is noticed in the present case. 12. Considering that statutory power of amalgamation is invoked in the present case under sections 391(1), 393 and 394 of the Companies Act, 1956, and having regard to the decision(s) of the Calcutta, Delhi and Bombay High Courts and the steps already taken, I feel that the proposed amalgamation should be sanctioned without requiring the transferor company to amend its memorandum by resorting to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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