Gulmohar Finance Ltd. vs In Re and others

J.K. Mehra, J.—Gulmohar Finance Limited has moved this petition for sanction of the scheme of amalgamation of Cluster Heavy Engineering Pvt. Ltd., Everlite Plastics Pvt. Ltd., Bigway Electronics Pvt. Ltd., Sakar Impex Pvt. Ltd., Anupam Industrial Resources Ltd., Square Software Pvt. Ltd. and Ankur Mercantile Pvt. Ltd. (hereinafter referred to as the "transferor companies") with Gulmohar Finance Ltd. (hereinafter referred to as the "transferee company"). It has also been claimed that the proposed scheme will result in economies of scale, reduction in administrative and procedural work, better and more productive utilisation of various resources and will enable the undertakings concerned to effect internal economies and optimize productivity and profitability.

It is also claimed that there are no proceedings pending under sections 235 to 251 of the Companies Act, 1956, against either the transferor company or the transferee company.

Notice was issued to the official liquidator and the Central Government through the Regional Director of the Company Law Board, Northern Region, Kanpur and publication was also made in the "Statesman" (English) and "Vir Arjun" (Hindi). None from the public has come forward to contest the petition for amalgamation.

C.A. No. 381 of 1994 was moved by the transferee company with a prayer to fix the meetings of the shareholders and creditors of all the companies, both transferor and transferee companies to approve the scheme of amalgamation. It was also claimed that the scheme of amalgamation was approved by the board of directors of the companies and accordingly, the meetings were fixed for May 11, May 13, May 16, May 18, May 20, May 23, May 26, May 27, 1994.

It has, inter alia, been pleaded that meetings of the shareholders and creditors of the companies were held in pursuance of the order of this court to consider the scheme of amalgamation, which has been approved by them.

The official liquidator has filed a report stating therein that the affairs of the transferor company have not been conducted in a manner, prejudicial to the interests of its shareholders or its creditors or to public interest and the transferor company may be dissolved without the process of winding up.

An objection on behalf of the Central Government has been raised that there is no proper valuation and the share transfer ratio. As such, it is not possible for the Central Government to ascertain whether they have adopted the correct ratio. It has been pointed out on behalf of the applicant that the provisions of rule 85 of the Companies (Court) Rules, 1959, are not attracted because there is no reduction of share capital being resorted to as a consequence of this scheme. It is further pointed out that the companies have practically no creditors. In that view of the matter, this objection cannot be sustained. There is no other objection raised on behalf of the Central Government.

Dr. A. K. Doshi, Regional Director, Northern Region, Deptt. of Company Affairs, has filed an affidavit sworn on March 24, 1995 stating therein that the affairs of the transferor and transferee companies have not been conducted in a manner prejudicial to the interest of its members or public interest.

I have heard counsel for, the petitioner and have also gone through the record.

As already referred to, the scheme of amalgamation of the transferor company with the transferee company has been approved by the shareholders and creditors of both the companies and both the official liquidator and the Regional Director, Northern Region, Company Law Board, both have not found any objection to the scheme of amalgamation being approved.

Considering all the facts, I am clearly of the view that a case is made out for sanction of the scheme of amalgamation.

Keeping in view all these facts, I sanction the scheme of amalgamation and declare that the same shall be binding on all the shareholders and creditors of the transferee company and all the shareholders and creditors of the transferor companies and all the assets, liabilities and reserves of the transferor companies shall, vest in the transferee company.

The registry shall draw up a formal order in accordance with law. Copy of the formal order be filed with the Registrar of Companies within thirty days of this order.