PHALTAN SUGAR WORKS LTD Vs. STATE

JUDGEMENT

(1.) THESE are two petitions under ss. 391 and 394 of the Companies Act, 1956, whereby the petitioners in Company Petition No. 684 of 1981 have prayed for being amalgamated with the petitioners in Company Petition No. 685 of 1981. The petitioners in Company petition No. 684 of 1981 are the Swastik Textile Mills Ltd. I propose to refer to them as 'the transferor company'. The petitioners in Company petition No. 685 of 1981 are Apte Amalgamations Ltd. (formerly called 'Phaltan Sugar Works Ltd.') which I propose to refer to as 'the transferee company'.

(2.) THE facts necessary for the disposal of these petitions can be stated shortly. The authorised capital of the transferee company is Rs. 2,00,00,000 (rupees to Crores only). The paid -up capital of the transferee company is Rs. 82,50,000 (rupees eighty -two lakhs fifty thousand only). The transferee company was incorporated on March 8, 1933, and its main business was to manufacture sugar. At one time, the transferee company had vast agricultural lands from which it was obtaining a good part of its requirements of sugarcane, but it is now dependent in supplies of sugarcane from the Maharashtra State Farming Corporation. The transferor company was incorporated as a public limited company on October 22, 1946. The transferor company carries on business in Bombay mainly of processing of textile goods. It was considered desirable by the management of the two companies that the two companies should be amalgamated by the amalgamation of the transferor company with the transferee company in order to carry on these business in a better manner. A scheme was formulated for such amalgamation and agreed to by the requisite majority of the members of the transferor company and the transferee company and the present petitions were made to this court for sanctioning the scheme of amalgamation. The requirements of ss. 391 and 394 of the Companies Act, 1956, have been duly carried out. The official liquidator has made a report stating on the basis of the finding recorded by M/s. Chandabhoy and Jassoobhoy, chartered accountants, that the affairs of the transferor company had not been conducted in a manner prejudicial to the interest of its members or public interest. This report was submitted in accordance with the provisions of s. 394 of the Companies Act. It may be mentioned that M/s. Chandabhoy and Jassoobhoy were the auditors appointed to scrutinise the books and papers of the transferor company and to submit report to the official liquidator, after investigating into the affairs of the transferor company. There is no objection by any of the shareholders or creditors of either of the said two companies to the amalgamation sought by them. There is, however, an objection raised by Mr. Rao, who appears for the Union of India, pursuant to the notice issued under s. 394A of the Companies Act. It is this objection which has to be considered in disposing of this petition.

(3.) THE relevant portion of s. 20 in Part A of Chap. III of the MRTP Act runs thus : 'This Part shall apply to - (a) an undertaking if the total value of - (i) its own assets, or (ii) its own assets together with the assets of its interconnected undertakings is not less than twenty crores of rupees - ... Explanation. - The value referred to in this section shall be - (i) in the case of an undertaking referred to in clause (a) or clause (b), as the case may be the value of its assets on the last date of its financial year which closes during the calendar year immediately preceding the calendar year in which the question arises as to whether this part does or does not apply to such undertaking; and (ii) in the case of an interconnected undertaking, the value of its assets on the last day of its financial year which closes during the calendar year immediately preceding the calendar year in which the question arises as to whether this part does or does not apply to the undertaking referred to in clause (a) of clause (b).'