D.A.DESAI - (1.)Kril Standard Products Private Limited petitioner (hereinafter referred to as the transferor company) has filed this petition under sec. 391(2) read with sec. 394 of the Companies Act praying for an order sanctioning the scheme of arrangement for amalgamation of the transferor company with Art Leather Private Limited Bombay (hereinafter referred to as the transferee company) and for making consequential orders as envisaged by sec. 394. The transferor company was incorporated on 23rd October 1964 with a nominal capital of Rs. 5 lacs divided into five thousand equity shares of Rs. 100.00 each and the entire nominal capital was issued and subscribed and the equity shares are fully paid shares. The transferor company was formed with the principal object of manufacturing producing assembling preparing converting repairing etc. injection Moulding machines apparatus and the accessories spare parts etc. relating thereto. The company also for some time carried on business of preparing and selling artificial leather cloth waterproof cloth etc. The principal activity of the transferor company however was of manufacturing Blow Moulding and Injection Moulding machines. The transferor company is a private limited company and by December 1971 all its equity shares were purchased and held by the transferee company and its nominees with the result that the transferor company has become wholly owned subsidiary company of the transferee company.
(2.)The transferee company was incorporated on 4th September 1948 and at present it is engaged in the manufacture of tracing cloth processing of book binding cloth acting as purchasing agents of Cable Corporation of India Limited and is also doing money lending business for which it has got the necessary licence under the Bombay Moneylenders Act. The transferee company appears to have recently reduced its manufacture of tracing cloth and processing of book binding cloth. It has surplus fund in the amount of about Rs. 13 lacs. The transferee company is also a private limited company. The authorised capital of the transferee company is Rs. 10 lacs divided into 10 0 equity shares of Rs. 100 each. Its issued subscribed and paid up capital is Rs. 6 30 0 consisting of 6300 equity shares of Rs. 100 each fully paid The equity shares of the transferee company are held by the members of Thackersey family.
(3.)The directors of the transferor company at their meeting held on 22nd day of December 1971 unanimously adopted a resolution proposing a scheme of arrangement for amalgamation of transferor company with the transferee company. The purpose sought to be achieved by the proposed amalgamation is to provide liquid funds for the expansion of the production and manufacture of injection and blow moulding machines by the transferor company. The transferor company has been recently able to enter into an agreement with foreign collaborators M/s. U.S.M. Corporation of United States. Pursuant to this collaboration agreement the activities of the transferor company are to be diversified and expanded which would need additional liquid finance. The transferee company has surplus funds to the tune of Rs. 13 lacs and if the transferor company is amalgamated with the transferee company the transferee company would be able to use its surplus liquid finance for expanding the activities of the transferor company. In order to bring cohesion in management and to provide for liquid funds for expanding production which was hitherto undertaken by the transferor company and for diversification of the activity of the transferee company the directors proposed an arrangement for amalgamation. Similarly the directors of the transferee company at the meeting held on 23rd December 1971 unanimously adopted a resolution to put forth the scheme of arrangement for amalgamation of the transferor company with the transferee company.
;