Partap Gases And Chemicals (P) ... vs Achal Investment Ltd.
1996 Latest Caselaw 470 Del

JUDGMENT

Vijender Jain, J.

(1) This is a petition filed under Section 391 read with section 394 of the Companies Act 1956 for sanction of the scheme of arrangement/amalgamation of M/s.Partap Gases and Chemicals Private Limited (hereinafter referred to as 'Transferor Company') with M/s.Achal Investment Limited (hereinafter referred to as 'Transferee Company').

(2) The petitioner/transferor company was incorporated on 3.4.1973 and has its registered office at A-4, Kalindi Market, New Delhi. Its authorised share capital was Rs-5,00,00,000 divided in 50,00,000 equity shares of RS.IO.00 each. The issued, subscribed and paid up capital was Rs.4,04,32,000.00 divided into 40,43,200 equity shares of Rs. 10.00 . The main objects of the transferor company are (a) to carry on business of manufacturers and dealers of natural gases and other gases or kindred substances or any compound thereof by any process and of selling or supplying such gases, substances and compounds or any of them to such performances as the company may from time to time think desirable; (b) to carry on the business of manufacturers and dealers of saleable coke, coaltar, pitch, asphalutm, amonicur liquor and other residual products obtained in the manufacture of gases and manufacturing of Chemicals of all kinds and description and other allied items required and in particular all types of acids and nitrates and caustic soda and soda ash; (c) to amalgamate with any other company in or outside India, whose objects or any of them are similar to any object or objects of this company or whose business is similar to the business or any part of the business of this company, etc.

(3) The transferee company is a limited company and it was incorporated under on 7.10.1980 with a capital of Rs.5 crores divided into 50 lakh equity shares of Rs.10 each, of which 2,00,000 shares were issued and Rs.20,00,000 was paid up on each issued and has its registered office at 2/27, Sarai Jullena, Nemchand Complex, New Delhi. The main objects of the transferee company are (a) to carry on the business of finance, facilitate, encourage, promote and assist in the establishment and growth of industries and industrial undertakings subject to the provisions of 108-A to 108-H of the Companies Act. To take part in the formation, management, supervision and control of the business or operation of any company or undertaking and for that purpose to appoint and remunerate any Director, officer or other experts or agents. To sell or otherwise dispose of any of the property or investments of the company, not in the nature of stock in trade; (b) to carry on the business of a company established with the object of financing industrial enterprises within the meaning of Section 370 of Companies Act, 1956 and to make loans, give guarantees and provide securities to or on behalf of anybody corporate or other person whether promoted and/or managed by this company or not. to acquire, to take over, with or without consideration and/or carrying on the business share register and transfer agents, financial advisors, management consultants, valuers and/or data processing by themselves or in partnership with other companies, firms or other person, etc.

(4) The Board of Directors of both the transferor and transferee companies passed resolutions of arrangement/amalgamation of both the transferee and transferor comapnies. A copy of the scheme of amalgamation has been filed as Annexure 'A' to this petition. The petitioner/transferee company filed an application bearing C.A. No.376/95 under section 391 of the Companies Act, 1956 seeking a direction from this Court to convene and hold the meeting of the shareholders for the purpose of considering and if thought fit approving with or without modifications the proposed scheme of arrangement/amalgamation and to put it into effect.

(5) This Court appointed Ms.Ansuya Salwan, Advocate as Chairperson or failing her Shri R K Mehta, Superintendent of this Court, as Chairman for conducting the said meeting of the applicant company. On 18.9.1995 meeting of the shareholders of the applicant company was duly held in accordance with the order of this Hon'ble Court at 3:00 p.m. at A-4, Kalindi, New Delhi.

(6) The Chairperson submitted the report. It is stated that the scheme of arrangement/ amalgamation was unanimously approved by the shareholders of the applicant company in the meeting held for this purpose.

(7) On a notice sent to the Official Liquidator attached to this Court, he has submitted a report on 21.12.1995, inter alia stating therein that the affairs of the transferor company have not been conducted in a manner prejudicial to the interests of its members or of public interest and that the transferor company could be dissolved without the process of winding up.

(8) On a notice sent to the Regional Director, Deptt. of Company Affairs in terms of Section 394(1), Mr.S B Mathur, Regional Director, Northern Region, Department of Company Affairs, Kanpur, has filed an affidavit to the effect that the affairs of the transferor company do not appear to have been conducted in a manner prejudicial to the interest of its members or public interest. However, he has raised an objection with regard to exchange ratio. Mr.Benati, learned counsel for the petitioner, has contended that the objection of the Regional Director, Department of Company Affairs, regarding exchange ratio is not justified as the shareholders have unanimously approved the scheme of arrangement/amalgamation. He has further contended that even otherwise once a reputed valuer has valued the exchange ratio, this Court would not go into that question in the absence of any fraud or mala fide being alleged by the Regional Director. In support of his contentions, he has cited the case of Hindustan Lever Employees' Union vs.Hindustan Lever Limited & ors 1995 Supp (1) Scc 499. In my considered opinion when the transferor and transferee companies have agreed to exchange ratio, scheme of arrangement/amalgamation has been approved by the shareholders unanimously and in the absence of any allegation of fraud and mala fide, this Court would not embark upon an inquiry and interfere in the exchange ratio between the transferor and transferee companies.

(9) It is also stated that no investigation or proceedings under Sections 235 to 251 of the Companies Act, 1956 are pending against the petitioner company.

(10) Considering all the relevant facts and circumstances, the reasons set out by the petitioner in support of the amalgamation, the unanimous approval given by the shareholders and in absence of any objection from the Central Government or the Official Liquidator and in view of the decision of the Supreme Court referred to above, I hereby accord sanction to the said scheme of arrangement/amalgamation, Annexure 'A' (to the petition) providing for arrangement/amalgamation of the transferor company with the transferee company and declare that the said scheme shall be binding on all the members of the petitioner company w.e.f. the transfer date i.e.l.4.1994. It is open to any person interested to move this Court for appropriate directions as may be considered necessary in future.

(11) The petition is accordingly allowed and disposed of.