Allowed

Venture Finance and Development Corporation Limited v. -

Telangana HC24 Aug 2012CP/71/2012

Case brief

AI extract

What is this about?

The Court sanctioned a scheme of amalgamation between Advaita Energy Advisors Pvt. Ltd. and Venture Finance and Development Corp. Ltd. under Sections 391 and 394 of the Companies Act, 1956. The Court held that holding meetings of shareholders and creditors was unnecessary as all stakeholders had consented or been paid. It also rejected objections regarding double fees for share capital. The scheme

What did the court decide?

Scheme of amalgamation between the two companies was sanctioned under Sections 391 and 394 of the Companies Act, 1956.

Venture Finance and Development Corporation Limited… — Company and Corporate | Telangana HC (2012)

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THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN COMPANY PETITION Nos.70 AND 71 of 2012

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COMMON ORDER:

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Company Petition No.70 of 2012 is filed by Advaita Energy Advisors Private Limited (hereinafter called the ‘transferor company’), and Company Petition No.71 of 2012 is filed by Venture Finance and Development Corporation Limited (hereinafter called the ‘transferee company’), seeking sanction of this Court, under Sections 391 and 394 of the Companies Act, 1956 (the Act), to the proposed scheme of amalgamation between the transferor and the transferee companies.

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The transferor company is a Private Limited Company incorporated on 05.07.2007. Its registered office is situated at Hyderabad in the State of Andhra Pradesh. Its main objects are to carry on the business of acting as managers, advisors, administrators, agents, consultants, technical and industrial consultants for energy producers, suppliers, traders, to provide and render advice on planning development, research, design, plant operation etc. The objects also include providing investment, private equity or debt funds for power suppliers, producers and any other activities concerned with the production and supply of power and energy for both conventional and non-conventional methods. The authorised share capital of the transferor company is Rs.5,01,00,000/- divided into 50,10,000 equity shares of Rs.10/each. Its issued, subscribed and paid-up capital is Rs.5,01,00,000/- divided into 50,10,000 equity shares of Rs.10/each. The Board of Directors, at its meeting held on 21.01.2012, unanimously approved the scheme of amalgamation of the transferor with the transferee. For the financial year ending

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30.03.2011, the transferor company suffered a loss of Rs.51,97,104/-. For the period 01.04.2011 to 20.02.2012, the transferor company suffered a further loss of Rs.3,47,673/-.

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The transferee company is a Public Limited Company incorporated on 26.08.1996. Its registered office is also situated at Hyderabad in the State of Andhra Pradesh. Its main objects include to carry on and to undertake the business of finance, housing finance, bill discounting, bridge loan, hire purchase, leasing, hiring all kinds of plant and machinery and equipment; and to carry on the business of investments in all kinds of securities including shares, stocks, debentures, deposits, units, applying for shares in promoters quota, firm allotments and government securities etc. The authorised share capital of the transferee company is Rs.24,00,00,000/- divided into 2,40,00,000 equity shares of Rs.10/- each. Its issued, subscribed and paid-up capital is Rs.24,00,00,000/- divided into 2,40,00,000 equity shares of Rs.10/- each. The Board of Directors, at its meeting held on 21.01.2012, unanimously approved the scheme of amalgamation of the transferor with the transferee. For the financial year ending 31.03.2011, the transferee company earned a profit after tax of Rs.8,33,398/-. For the period 01.04.2011 to 20.02.2012, the transferee company made a profit of Rs.1,28,13,377/-.

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Before sanctioning a scheme of arrangement, the Court must be satisfied that the statutory provisions are complied with; in case a meeting, of the members or a class of members or of the creditors or a class of creditors, is called for, the class is fairly well represented; and the scheme of arrangement is such as a man of business would reasonably approve. It is the commercial wisdom of the parties to the scheme, who have taken an informed decision about the usefulness and propriety of the scheme

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supporting it by the requisite majority vote, that has to be kept in view by the Court. The Court would not act as a court of appeal and sit in judgment over the informed view of the parties to the compromise as it has neither the expertise nor the jurisdiction to delve deep into the commercial wisdom exercised by the creditors and members of the company who have ratified the scheme by the requisite majority. The Company Court’s jurisdiction to that extent is peripheral and supervisory and not appellate. The supervisor cannot ever be treated as the author or the policy-maker. The propriety and the merits of the compromise or arrangement has to be judged by the parties who, as sui juris with their eyes open, and fully informed about the pros and cons of the scheme, arrive at their own reasoned judgment and agree to be bound by such a compromise or arrangement. The Court cannot scrutinise the scheme to find out whether a better scheme could have been adopted by the parties. (Miheer H. Mafatlal v. Mafatlal Industries Lt d^[1] ) .

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Under Section 391 of the Act, where a compromise or arrangement is proposed between a Company and its members, the Court may, on the application of the company or of any creditor or member of the company, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Court directs. Sub-section (2) provides that, if a majority in number representing three-fourths in value of the creditors, or class of creditors, or members, or class of members, as the case may be, present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the said compromise or arrangement shall, if sanctioned by the Court, be binding on all the creditors and all the members of the

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Company.

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When a scheme of amalgamation/merger of a company is placed before the Court for its sanction, the Court should, in the first instance, direct holding of the meetings in the manner stipulated in Section 391 of the Act. Thereafter, even if the proposed scheme is approved by a majority of the concerned members or creditors, the Court should, before sanctioning such a scheme, satisfy itself that the company, or any other person moving an application for sanction under sub-section (2) of Section 391, has disclosed all the relevant matters mentioned in the proviso to the said sub-section. The first proviso to Section 394 of the Act stipulates that no scheme of amalgamation of a company, which is being wound up, with any other company, shall be sanctioned by the Court unless the Court has received a report from the Company Law Board or the Registrar to the effect that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest. Similarly the second proviso to the said Section provides that no order for the dissolution of any transferor company under clause (iv) of sub-section (1) of Section 394 of the Act shall be made unless the official liquidator has, on scrutiny of the books and papers of the company, made a report to the Court that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest. Thus, Section 394 of the Act casts an obligation on the Court to be satisfied that the scheme of amalgamation or merger is not prejudicial to the interest of its members or to public interest. (Sesa Industries Limited v. Krishna H. Bajaj^[2] ) .

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This Court, by order in Company Application No.38 of 2012 dated 07.03.2012, dispensed with the convening of the meeting of

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the shareholders, and the creditors of the transferor company, (creditors representing secured loans, unsecured loans and creditors under the head “current liabilities”) as all the shareholders had furnished letters of consent to the proposed scheme of amalgamation; and the creditors had either been paid their dues or had conveyed their no objection to the scheme of amalgamation. Likewise, this Court, by order in Company Application Nos.39 and 320 of 2012 dated 19.03.2012, dispensed with the requirement of convening of the meeting of the shareholders and the sundry creditors of the transferee company as the shareholders and the creditors had given their consent to the proposed scheme of amalgamation. In the aforesaid order, this Court noted that the transferee company did not have either secured or unsecured loans; and the creditors under the head “current liabilities” were either paid off or had given their consent to the proposed scheme of amalgamation. In view of the orders passed by this Court in the company applications referred to hereinabove, the requirement of holding the meeting of the shareholders of both the transferor and the transferee companies is unnecessary.

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On the question whether, in a scheme of arrangement between the company and its members, a meeting of the creditors or a class of creditors must be held, it is necessary to note that the expression “as the case may be” finds place both in subsections (1) and (2) of Section 391. If the words “as the case may be” in Section 391(1) is construed as requiring the Court to order the meeting of only the members, in a Scheme of arrangement between the Company and its members, and only a meeting of the Creditors in a Scheme of arrangement between the Company and its Creditors, then should the expression “as the

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case may be” in Section 391(2) not be read as to bind only the members where a meeting of the members is held and the creditors where a meeting of the creditors is held? The safeguard in the provision, of ¾ of the members or creditors in value voting in the meeting to approve the scheme, is that the wishes of a majority of the class should prevail, and the dissenting minority of 1/4^{t h} or less of the class should not be permitted to derail the scheme of arrangement unless, of course, the Court, on examining the scheme, finds that the objection of the minority is justified. If no meeting of the creditors is required to be held, in a Scheme of arrangement between the Company and its members, then, in the absence of ascertaining whether 3/4^th in value of the creditors approve the scheme or not, would the Court be justified in statutorily imposing such a Scheme of arrangement on the creditors, even though their consent has not been obtained or their wishes ascertained? If it were held that not holding the meeting, and ascertaining the wishes of the creditors, would result in the Scheme of arrangement not to bind them, would the very purpose of sanctioning the Scheme by the Court not be defeated, and approval of the Scheme not be an exercise in futility? If, on the other hand, the view, that a meeting of the creditors/members must necessarily be held in all cases irrespective of whether the Scheme of arrangement is between the Company and its members or the creditors, is accepted would that not render the words “as the case may be” in Section 391(1) mere surplusage?

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On this issue, one view is that the creditors are not entitled, as of right, to participate in the process of consideration of sanction of the Scheme, as the Companies Act does not contain a specific provision for notice being given to the creditors at any stage either prior to the making of the order or subsequent thereto,

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except in so far as the creditors may have notice of it by public advertisement, (Union of India v. Asia Udyog Pvt. Lt d^[3] ) , and that the legislature has cast a duty on the Court to ascertain whether the Scheme affects the interests of the creditors to such an extent that holding of their meeting is essential and, if the Court were of the view that the interest of the creditors were adversely affected, it could refuse to sanction the scheme unless their consent has been obtained. (Ansal Properties and Industries Ltd., In r e^[4] ) .

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Another facet of this view is that, under Section 391 of the Act, a compromise or arrangement is either between a company and its creditors or between a company and its members. An arrangement, in the nature of amalgamation, is the result of an agreement between the amalgamating company and its members, as well as a corresponding agreement between the transferee company and its members, and there is, therefore, no provision for the participation of persons other than the members of the two companies to vote on an arrangement of amalgamation proposed between a company and its members. (Nava Bharat Ferro Alloys In r e^[5] ; Mafatlal Industries Ltd., In r e^[6] ; Coimbatore Cotton Mills Ltd and Lakshmi Mills Co. Ltd., In r e^[7] ; and Telesound India Ltd., In r e^[8] ) . However, a different view was taken by the Bombay High Court, In Re ICICI Bank Limite d^[9] , and it was held that Section 391(1) gives a discretion to the Court to convene a meeting of the creditors or any class of them; the Court would exercise the discretion by convening a meeting of creditors, if the creditors are likely to be adversely affected by an arrangement between the Company and its members; attending the meeting

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and voting are steps of participation in the process of consideration of the Scheme; if the creditors have no right of hearing at the time of hearing of the petition under Section 391, the only way of ascertaining whether the creditors are affected or not would be through the wishes of the creditors which may be expressed by them in a meeting which the Court is entitled to convene under sub-section (1) of Section 391; and, therefore, the Court would exercise its discretion as a matter of course to convene a meeting of the creditors of the Company under subsection (1) of Section 391 unless the Court is, prima facie, satisfied that the interests of the creditors are not likely to be adversely affected by the scheme. As noted hereinabove, as all the creditors reflected in the Balance Sheet as at 31.03.2011 have either been paid or have consented to the scheme, holding a meeting of the creditors is unnecessary.

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Under the proviso to Section 391(2), no order sanctioning any compromise or arrangement shall be made unless the Court is satisfied that the company has disclosed to the Court, by affidavit or otherwise, all material facts relating to the company, such as the latest financial position of the company, the latest auditor's report on the accounts of the company, the pendency of any investigation proceedings in relation to the company under Sections 235 to 251, and the like.

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In paragraph 16 of both the company petitions, it is stated by the transferor and the transferee companies that no investigation or proceeding is pending under Sections 235 to 237 or any other provisions of the Companies Act, or under any Act against them. The latest financial position of the transferor and transferee companies, and the auditors report on the accounts of the company, are the Balance Sheets as at 31.03.2011 and the

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auditors reports of the accounts of both the companies for the year ending 31.03.2011.

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A combined reading of the first and second provisos of Section 394(1), with Section 394-A of the Act, shows that the scheme of amalgamation would not be sanctioned unless the court has considered the report of the Official Liquidator or the representation of the Central Government, as the case may be. Section 448 of the Act provides for the appointment of an official liquidator for each High Court. The principal function of the official liquidator is, undoubtedly, in relation to the winding up of the company, but that does not mean that the official liquidator has not been entrusted any other functions under the Act. Section 448 merely prescribes the manner and mode of appointment of the official liquidator and, once such an appointment is made by the Central Government, it is for the Legislature to clothe the official liquidator with any other duty which it considers expedient and necessary. The second proviso to sub-section (1) of Section 394 of the Act demands submission of the report from the official liquidator in cases of dissolution of the company without winding

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up. (Sumani Pvt. Ltd's cas e^[10] ) .

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An Official Liquidator acts as a watchdog of the Company Court reposed with the duty of satisfying the Court that the affairs of the company, being dissolved, have not been carried out in a manner prejudicial to the interests of its members and the interest of the public at large. In essence, the Official Liquidator assists the Court in appreciating the other side of the picture before it, and it is only upon consideration of the amalgamation scheme, together with the report of the Official Liquidator, that the Court can arrive at a final conclusion that the scheme is in keeping with the mandate of the Act, and that of public interest in general. For

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examining the questions as to why the transferor-company came into existence; for what purpose it was set up; who were its promoters; who were controlling it; what object was sought to be achieved by dissolving it and merging it with another company, by way of a scheme of amalgamation, the report of an official liquidator is of seminal importance and, in fact, facilitates the Company Judge to record his satisfaction as to whether or not the affairs of the transferor company had been carried on in a manner prejudicial to the interest of the minority and to the public interest. (Sesa Industries Limite d² ) .

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In his report No.119 of 2012 dated 25.05.2012, the Official Liquidator would state that he had, vide letter dated 03.05.2012, called for the statutory books and other relevant information from the transferor company, and the information/documents called for were furnished on 21.05.2012. The Official Liquidator would refer to the capital structure and the objects of the transferor company, and note that, under clause (B) 27 of Memorandum of Association of the transferor company, the objects included amalgamation with any company or companies having objects altogether, or in part, similar to those of the transferor company. He also notes that letters of consent have been furnished from the creditors (representing secured and unsecured loans). The Official Liquidator concludes that, basing on the information made available, he was of the opinion that the affairs of the company appeared to have not been conducted in a manner prejudicial to the interest of the members or to public interest.

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In his report dated 04.07.2012 filed on behalf of the Central Government, the Regional Director (South Eastern Region), Corporate Affairs, Hyderabad would submit that under para 11.7.1 of the proposed scheme of amalgamation, upon the scheme being

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sanctioned by the Court, the authorized capital of the transferor company shall stand transferred to and added to the authorized share capital of the transferee company; the transferee company was required to comply with the provisions of Sections 95 and 97 of the Act; as per the report dated 15.06.2012 of the Registrar of Companies, Andhra Pradesh, Hyderabad both the transferor and transferee companies were regular in filing statutory returns; and no investigation or proceeding was pending against both the companies.

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Section 97 of the Act provides for notice of increase of share capital. Under sub-section (1) thereof, where a company increases its share capital beyond the authorised capital, it is required to file with the Registrar a notice of the increase of capital within thirty days after passing of the resolution authorising the increase; and the Registrar is required to record the increase, and make alterations as may be necessary, in the company's memorandum or articles, or both.

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The objection of the Regional Director, (South Eastern Region), Corporate Affairs, Hyderabad, in effect, is that on amalgamation, the authorized share capital of both the companies stands increased; and, as such, they are required to put the Registrar of Companies on notice which would include payment of the prescribed fee for the increased authorized share capital.

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In Re: Magnaquest Solutions Private Limite d¹¹ , after placing reliance on Saparna Infotech Ltd. v. Relinfo Limited (Judgment in C.P. Nos. 149 and 150 of 2001 dated 04.01.2002); Krishnan Products Pvt. Ltd. v. Krishna Poly Packs Pvt. Ltd. (Judgment in C.P. Nos. 68 and 69 of 2005 dated 13.8.2007); R.K.S. Motors (P) Ltd., In R e¹² ; and In Re Kemira Laboratories Limited (Judgment in O.S.A. Nos. 24, 44 and 46 of 2005 and C.P.

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Nos. 144, 145 and 146 of 2003 dated 25.01.2007), this Court held as under:

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“On the scheme of amalgamation being sanctioned by the Court, the rights, property and liabilities of the transferor become the rights, property and liability of the transferee company and, as a consequence thereof, the right which the transferor has to issue share capital and the existing liability in the form of its authorized capital stand transferred to and are vested in the transferee company. Since the authorised capital of the transferor, which is transferred to and stands vested in the transferee, has already been subjected to payment of the prescribed fee, absence of a specific provision either in the Companies Act, 1956, or the Rules made thereunder, requiring the transferor to again seek approval of the Registrar of Companies or to pay fees on such authorized capital, the contention, that approval of the Registrar must again be sought and fees paid all over again, must necessarily be rejected.”

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In Re Kemira Laboratories Limited, a Division Bench of this Court held as under:

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“No good reason has been shown why the two merged companies should be required to pay fees again, on the same authorized capital on which the prescribed fee has already been paid by the transferor Company (Jaypee Cement Ltd .¹³ ) . An order can be passed, under Section 391 of the Companies Act itself, regarding increase of the authorized share capital by merger of the authorized capitals of the two companies, (Vasant Investment 14 Corporation Limited v. Official Liquidator and Jaypee Cement Ltd.).”

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This objection of the Regional Director does not, therefore, merit acceptance.

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While the Court, called upon to sanction a scheme of amalgamation, would not act as a Court of appeal and sit in judgment over the informed view of the concerned parties to the scheme, as the same is best left to the corporate and commercial wisdom of the parties concerned, it is clear that the Court, before whom the scheme is placed, is not expected to put its seal of approval on the Scheme merely because the majority of the shareholders have voted in favour of the scheme. Since the Scheme, which gets sanctioned by the Court, would be binding on

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the dissenting minority shareholders or creditors, the Court is obliged to examine the scheme in its proper perspective together with its various manifestations and ramifications to find out whether the scheme is fair, just and reasonable to the concerned members, and is not contrary to any law or public policy. The expression “public policy”, though incapable of precise definition, connotes some matter which concerns the public good and the public interest. (Sesa Industries Limited² ; Hindustan Lever Employees' Union v Hindustan Lever Ltd.,¹⁵ ; Central Inland Water Transport Corporation Limited. v. Brojo Nath Gangul y¹⁶ ) . Before according its sanction to a scheme of amalgamation, the Court has to see that the provisions of the Act have been duly complied with; the statutory majority has acted bonafide and in good faith, and are not coercing the minority in order to promote any interest adverse to that of the latter comprising the same class whom they purport to represent; and the scheme, as a whole, is just, fair and reasonable from the point of view of a prudent and reasonable businessman taking a commercial decision. (Sesa Industries Limited² ).

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The Court cannot abdicate its duty simply because the statutory majority has approved it and there is no opposition to the scheme of amalgamation in Court. It must scrutinize the scheme to find out whether it is an arrangement which can, by reasonable people conversant with the subject, be regarded as beneficial to those who are likely to be affected by it. In pursuit of such an enquiry the Court is not tied down by any rigid principles or straitjacket formulae. No enumeration contained in judicial decisions of the factors which can be taken into account, howsoever precise, can be treated as exhaustive so as to limit the scope of the inquiry

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which, having regard to varying circumstances, might differ from case to case. The burden lies on the petitioner-company to show that the scheme of amalgamation is fair, reasonable, workable and is such that a man of business would reasonably approve. The Court would, of course, take into account the fact that it has been approved by a big majority vote, but it would not shirk its duty to scrutinize the scheme. (Bank of Baroda Ltd. v. Mahindra Ugine Steel Co. Ltd.¹⁷ ) . When it exercises the power, conferred on it by Section 391(2), to sanction the scheme of compromise or arrangement the Court, by its act, is imposing the scheme on the dissenting members of that class. Before taking such an action, it would be open to the Court to examine the scheme before imposing it on the unwilling/dissenting members of the class. Even if all the statutory formalities are duly carried out, the Court has still the discretion either to sanction or refuse to sanction the scheme. (Mahindra Ugine Steel Co. Ltd.¹⁶ and Bengal Hotels P. Ltd. In r e¹⁸ ) .

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The amalgamation must fulfil some felt need, some purpose, some object and that must have some co-relation with public interest. The Court is charged with a duty to ascertain whether the affairs, of both the transferor and the transferee, have been carried on not only in a manner not prejudicial to its members but also that it is not against public interest. The expression “public interest” must take its colour and content from the context in which it is used. (Union of India v. Ambalal Sarabhai Enterprises Lt d¹⁹ ) . The Indian law, a departure from the English law, enjoins a duty on the Court to examine objectively whether the merger is, or is not, violative of public interest. What would be in public interest cannot be put in a strait-jacket. It is a dynamic concept which keeps on

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changing. It has been explained in Black’s Law Dictionary as:-

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“Something in which the public, the community at large, has some pecuniary interest, or some interest by which their legal rights or liabilities are affected. It does not mean anything so narrow as mere curiosity, or as the interests of the particular locality which may be affected by the matters in question. Interest shared by citizens generally in affairs of local, State or national Government.”

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It is an expression of wide amplitude. A scheme, valid and good, may yet be bad if it is against public interest. The basic principle of the satisfaction, that the scheme is not contrary to public interest, is none other than the broad and general principles inherent in any compromise or settlement entered into between the parties that it should not be unfair or contrary to public policy or unconscionable. In amalgamation of companies, Courts have evolved the principle of “prudent business management test” or that the scheme should not be a device to evade the law. (Hindustan Lever Employees' Union¹⁵ ). No court of law would ever countenance any scheme of compromise or arrangement if it finds that it is an illegal scheme or is otherwise unfair or unjust to the class of shareholders or creditors for whom it is meant. The fairness of the scheme, qua the disputing minority shareholders or creditors, also has to be kept in view by the High Court while putting its seal of approval on the scheme.

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The High Court should examine whether the proposed scheme of compromise and arrangement is violative of any provision of law and is not contrary to public policy. For ascertaining the real purpose underlying the scheme with a view to be satisfied on this aspect the Court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously x-ray the same. The High Court has also to satisfy itself that the members or class of members or the creditors or class of creditors, as the case may be, were acting bona fide and

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in good faith and were not coercing the minority in order to promote any interest adverse to them. It must also ensure that the scheme as a whole is also just, fair and reasonable from the point of view of prudent men of business taking a commercial decision beneficial to the class represented by them for whom the scheme is meant. (Miheer H. Mafatlal¹ ). Unless the scheme is shown to be contrary to any law or is such as to shock the conscience of the court or is patently unfair to the members or creditors or any class of them, or is against public interest or against public policy, the Court should not come in the way of business by rejecting a bona fide scheme under Section 391. (Zee

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Interactive Multimedia Ltd., In rei n²⁰ ) .

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Clause 4 of the scheme provides for transfer of the undertaking; and, under Clause 4.1, upon the scheme becoming effective, the entire undertaking of the transferor company would, without any further act or deed, stand transferred and be vested in the transferee company. Clause 5 relates to transfer of rights and obligations under contracts, deeds and other instruments; and all bonds, agreements to which the transferor company was a party shall be in full force and effect against or in favour of the transferee company. Clause 7 relates to transferor company’s staff, workmen and employees; and, thereunder, upon the scheme becoming effective, all staff, workmen and employees on the permanent rolls of the transferor company, immediately before the transfer of the undertaking, shall be deemed to have become the staff, workmen and employees of the transferee company as if they are in continuous service or uninterrupted by reason of the transfer of the undertaking; and the terms and conditions of their employment not being less favourable than those subsisting immediately before the transfer. Clause 11 deals with

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consideration. Clause 11.1 provides that, upon the scheme becoming effective, in consideration thereof the transferee company would allot 100 equity shares of Rs.10/- each for every 278 equity shares of Rs.10/- each paid up and held by such shareholder whose name appears in the register of members of the transferor company. Clause 12 relates to cancellation of shares. Clause 15 provides that the scheme would become effective subject to approval, including sanction of this Court, under Sections 391 and 394 of the Act; and the certified copies of the Court being filed with the Registrar of Companies, Andhra Pradesh.

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Both the transferor and the transferee companies, in their objects/benefits of the proposed scheme of amalgamation, would state that the amalgamation would result in better and efficient utilization of resources resulting in synergy of operations and economies of scale; it would have better administrative and managerial control for the management as the merger of the companies would ensure synergy in administration and management; the transferee company would derive and avail the benefit of assets and reserves of the transferor company which would increase its financial strength, and the ability to make larger investments and help in expeditious and economical implementation of its proposed projects and, thereby, enhancing the value of its business; the transferee company would have improved capital structure which would enable it to access the capital market at better terms and afford easier access to other resources at a lower cost; and the proposed amalgamation, in general, would have beneficial results for the companies, shareholders, employees and all concerned.

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In view of the aforesaid objects of the scheme, it cannot be

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said that the scheme of amalgamation, if approved, would be against public interest. I consider it appropriate, therefore, to sanction the scheme of amalgamation. As required under Section 394 (3) of the Act, read with Rule 81 of the Company (Court) Rules, 1959, the transferor company shall file a certified copy of the order of this Court, with the Registrar of Companies for its registration within thirty days from the date of the order.

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RAMESH RANGANATHAN, J

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Date: 24.08.2012 USD

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