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In Re : Thirumbadi Rubber Co. Ltd.

    Company Petition No. 25 of 2013 c/w M.C.A. No. 12 of 2013

    Decided On, 04 September 2013

    At, High Court of Kerala


    For the Petitioner: P.B. Sahasranaman, V. Ramakrishnan, T.S. Harikumar, K. Jagadish, Rajesh Subramanian, Advocates.

Judgment Text

1. All the shareholders of the transferor and transferee company have unanimously approved a scheme for amalgamation. The reasons of amalgamation have been succinctly stated in paragraph 13 of the company petition which can profitable be extracted hereunder:

"The transferor and the transferee companies are in the same line of plantation business. The transferor company is engaged in the business of tea, coffee, minor produce. The transferee company is also a plantation company engaged in the business of rubber plantations. Both the transferor and transferee companies are public limited listed companies. The shares of the transferor and the transferee companies are listed on the Madras Stock Exchange Ltd., and the Coimbatore Stock Exchange Ltd. Some of the shareholders and director of the transferor company are also shareholders and directors of the transferee company. There is a commonality of interest in ownership and management of both the companies. The scheme will contribute to furthering and fulfilling the objects of the companies concerned and in the growth and development of their business. The scheme of amalgamation will enable the two companies to consolidate their business activities and combine their resources for further growth and development of their business. The merged entity would have a higher net worth and hence can raise funds for expansion/development. The combined entity will have better financial leverage to take advantage of the market situation. Since both companies operate in the plantation industry, there is duplication of overheads. By combining the operations, the resulting amalgamated company will have substantial reduction in the overheads. There would be a better synergy of operation, control and cost effectiveness. The shareholder value of the combined entity would improve considering that the combined entity would have higher profitability and net worth. The scheme is thus expected to have beneficial results for the companies, their shareholders and all concerned."

2. Clause 12 of the scheme indicates that the provisions of section 31 of the Companies Act, 1956, have been complied with substantially. Even otherwise section 391 of the Companies Act is complete by itself and is in the nature of a single window scheme. The decisions in Doosan Babcock Engineering and Services India P. Ltd., In re [2011] 166 Comp Cas 41 (Delhi) and Mekaster Valves and Engineering Services P. Ltd., In re [2009] 149 Comp Cas 593 (Guj) are opposite. The High Court of Judicature of Madras has alr

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eady sanctioned the scheme as evident by annexure A10. The scheme is definitely in the interest of members and creditors of the company and I accordingly grant sanction. The registry shall issue order in the appropriate statutory firm. 3. The company petition is disposed of.