C.P.No.220 of 2001 has been filed by M/s.Ajith Dairy Industries Ltd., under Secs.391 and 394 of The Companies Act, 1956, hereinafter called the transfer company, praying this Court to approve the scheme of amalgamation as annexed with the company petition and as approved by the equity share holders of the transferor company and to dissolve the transferor company without being wound up and for their incidental reliefs.
2. This Court ordered publication of the company petitioner and notice to the Central Government. Affidavit of service has been filed along with the publications. The Central Government has been served and a common affidavit has been filed by the Regional Director, Department of Company Affairs in this company petition as well as in C.P. No.221 of 2001 filed by the transferee company.
3. C.P. No.221 of 2201 has been filed by M/s.Hatsun Agro Products Limited hereinafter called the transferee company under Secs.391 to 394 of The Companies Act, 1956, praying this Court to approve the scheme of amalgamation set out in the annexure filed along with petition as approved by the equity share holders of the transferee company and for other consequential and incidental reliefs.
4. In this company petition also, this Court ordered notice to the Central Government besides publication in the newspaper in which the convening of the meeting has been published, returnable on 29.10.2001. The transferee company has filed an affidavit, besides publications to show compliance. On behalf of the Union of India, the Additional Central Government Standing Counsel has filed an affidavit filed by the Regional Director, Department of Company Affairs, Chennai, in terms of Sec.394-A of The Companies Act, 1956.
5. Heard Mr.R.Murari, learned counsel appearing for the petitioner in both the company petitions and Mr.M.T.Arunan, learned Central Government Standing Counsel for the Central Government.
6. This Court also considered the report submitted by Mr.M.Sriram, the chairman appointed by this Court for the meeting of the equity share holders of the transferor and transferee companies. As seen from the report of the Chairman, the meeting of enquiry share holders was convened and the enquiry share holders of both the companies have unanimously passed a resolution approving the scheme of amalgamations in separate meeting of general body convened for the purpose. There was not objections from any quarter. All the equity share holders have been served with notice, besides the scheme as approved by the Directors along with the notice.
7. The transferor company, M/s.Ajith Dairy Industries was initially incorporated on 22.12.1993 in the name of R.P.S. Dairy Farms Limited. The name of the said Company was changed to Ajith Dairy Industries Limited and a fresh certificate of incorporation consequent to change of name was issued by the Register of companies. The transferor company has is registered office at No.5-A, Vijayaragha Road, T.Nagar, Chennai. The main objects of the transferor company are to procure, process and market milk and milk products in the trade name of 'Gomatha'. The authorised share capital of the transferor company as on 31.3.2001 being 55 lakhs equity share of Rs.10 each and the subscribed paid up shares being Rs.36,00,020 equity shares of Rs.10 each and total subscribed paid up to share capital being Rs.3,60,00,200.
8. The transferee company was incorporated under the provisions of The Companies Act, 1956, with effect from 7.7.1995 and it was converted into a public limited company with effect from 11.8.1995. The transferee company also has its registered office at No.5-A, Vijayaraghaava Road, T.Nagar, Chennai. The Board of Directors of the transferor company and transferee company in their respective Board meeting approved a scheme of amalgamation to be effective from 1.4.2001. In the said scheme the transferor company together with its respective assets and liabilities are to be amalgamated with the transferee company. The said scheme of amalgamation has been approved by the equity share holders of the transferor and transferee companies in their general body meetings held separately. It is seen that both the companies are engaged in similar line of business and it is advantageous for them to procure and market milk and milk products. It is also stated that the transferor company a well established company has substantial financial strength. The transferee company being a relatively new company and in which the transferee company has only recently acquired a controlling interest, would be requiring financial support in the initial stages, which could be made available only on amalgamation.
9. It is seen for the petition that the transferor company was originally held by Mr.R.P.Saranyan and his family members. The administrator of RPS Benefit Fund Limited in respect of which winding up the proceedings are pending before this Court invited offers for the purchase of the share held by Saranyan group who held 81% of the equity share capital in the transferor company.
10. The salient features of the scheme being the undertaking the business of the amalgamating company, namely the transferor company, shall with effect from the appointed date, shall stand vested with the transferee company with all estate band interest of the transferor company as going concern, but subject to all charges, if any, affecting the same of any part thereof. the scheme provides for amalgamation and continuance of the same line of business by the transferee company. The transferee company takes all the liabilities and assets of the transferor company and the share holders of the transferor company shall be entitled to be allotted one equity share of Rs.10 each in the capital of the amalgamated company credited as fully paid up for every ten fully paid equity share of Rs.10 each held by them in the amalgamating company. The scheme as approved by the equity share holders of the transferor company and the transferor company provides for every contingency and no one has been given undue preference or a discriminatory treatment.
11. On behalf of the Central Government, an affidavit has been filed. It is pointed out that the interest if the employees of the transferor company is protected. It is also pointed out that equity capital of the transferor company, that the transferee company holds 81% of the equity capital in the transferor company or it may be deemed to be a subsidiary of the transferee company, but that will not in any manner bear the scheme being approved.
12. The points that arise for consideration are:
Whether the scheme as proposed and approved by the equity share holders of the transferor and transferee company are made in good faith, fair and reasonable morality or detrimental to the creditors or members of pubic interest or has violated any statutory provisions or is in violation of any of the provisions of The Companies Act.
Whether the scheme as approved by the Equity share holders deserve to be approved as prayed for.' 13. On a consideration of the scheme as approved by the equity share holders of the transferor and transferee company, this Court its of the considered view that all the equity share holders of the transferee and transferor company as a whole have approved the scheme and the scheme as provided, in no manner violates any of the provisions of The Companies Act or any other statutory provision. All the procedure prescribed by the statutory provision has been complied with and requisite meetings as contemplated by Sec.391-A required by the statutory provisions of the Companies Act has been complied with. The scheme has been approved unanimously by all the share holders, who attended the meeting and it is an absolute majority decision.
14. As required by Sec.393(1)(a), the scheme has been placed before the equity share holders in the meeting as contemplated by Sec.391(1) of the Act. So also all the required materials were placed before this Court as prescribed by Sec.391(2) of the Act. This Court is also satisfied with the scheme and it is violative of any of the provisions of law not it is contrary to public policy. The scheme as a whole is found to be just, fair and reasonable from the point of view of prudent mind of businessman, taking a commercial decision beneficially to all the equity share holders. In the circumstances, this Court is justified in sanctioning the scheme.
15. The learned counsel for the petitioners took the Court through the various clauses in the scheme and on objective examination, this Court finds that the provisions under the scheme in no way violates public interests or any other statutory provision or provisions of The Companies Act. The scheme as proposed is not contrary to public interest.
16. While applying th law laid down by the Apex Court in Miheer v. Mafatlal Industries Miheer v. Mafatlal Industries (1997)1 S.C.C. 579 and Hindustan Lever Limited Employees Union v. Hindustan Lever Limited Hindustan Lever Limited Employees Union v. Hindustan Lever Limited (1995)1 S.C.C. (Supp.) 499, this Court is satisfied the scheme as proposed by the Board of Directors and as passed by the General Body Meeting and resolved unanimously by the equity share holders, deserves to be sanctioned as they
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satisfy the tests laid down by the said two pronouncements. 17. In the circumstances, both the company petitions are ordered as prayed for. This Court sanctions the scheme of amalgamation as approved by the equity share holders of both the companies. 18. This Court further directs that the transferor company be dissolved without being wound up subject to the Official Liquidator, on the scrutiny of books and papers of the companies making a report to the Court as required by proviso to Sec.394 and the transferor company complying with the requirement of Rule 86 of The Companies (Courts) Rules. The scheme as sanctioned shall be binding on the transferor and transferee company, their equity share holders and all creditors from the effective dates set out in the scheme and binding on everyone concerned with the companies. 19. The transferee company shall pay a sum of Rs.3,500 (Rupees three thousand five hundred only) to the Additional Central Government Standing Counsel as his fees within two weeks from today.