- (1.)THESE two petitions have been filed under Sections 391 and 394 of the companies Act (I of 1956), and as they relate to a scheme for the amalgamation of the two companies, they are being dealt with together. The Cotton Agents (Rajasthan) Limited, hereinafter called the 'transferor company', and Shree Vijay luxmi Trading Company Limited, hereinafter called the 'transferee company' were both private companies at the time of their registration. They however became public companies by virtue of Section 43-A of the Companies Act. Both the companies have a share capital of Rs. 5,000/- each, with shares of Rupees 100/each. In the case of the transferor company, the shares have been paid to the extent of Rs. 50/- each, so that its subscribed capital is Rs. 2 1/2 lakhs. The shares of the transferee company have been fully paid up and its subscribed capital ic therefore Rs. 5 lakhs. The articles of association of both the companies prohibit an invitation to the public to subscribe to any shares or debentures or debenture stocks of the companies and the v also prohibit the transfer of the shares to a person who is not a member so long as any member or any person selected bv the directors, as one who should be admitted to the membership of the company, is willing to purchase them. There is of course no such prohibition for the transfer of shares by a member to his family. Both the compa-nies have been carrying on their business, and their balance-sheets have been placed on the record. It also appears that the nature of the business of the two companies is not dissimilar. It has been urged in this court that both the com-panits deal in shares and securities and they are mainly financiers and investors.
(2.)AS has been stated, both the companies have prayed for their amalgamation under a scheme of amalgamation (Ex. 2 ). Under it, all the properties, rights and powers of the transferor company are to be transferred to and vest in the transferee company. So also, all the liabilities and duties of the transferor company are to be transferred to the transferee company. The scheme provides further that the transferee company shall allot to every member or nominee or nominees of every member of the transferoi company who shall require it so to do, 2 fully paid up equity shares of Rs 100/- each for every 3 equity shares of Rs 100/- each paid up to Rs. 50/- per share held by him. The shares so allotted are to rank pari passu with the existing equity shares of the transferee company. While presenting this scheme of amalgamation, the petitioners have made it clear that there are no debenture holders of the two companies and that there arc no creditors of the transferor company it has also been stated that there are a few creditors of the transferee company but they have no objection to the scheme of amalgamation. Lists of shareholders of the two companies have been filed There are only 6 shareholders of the transferor company, while there are 8 shareholders of the transferee company.
(3.)ON the presentation of the petitions, this court made a detailed order for the holding of meetings of the members of the two companies directing. inter alia, that notices of the meetings shall be given personalty to all shareholders and advertised in the newspapers. Notices were also ordered to be given to the registrar of Companies and the Central Government The chairman of the meetings has made his reports. It appears that 5 out of 6 shareholders of the transferoi company representing 4,200 shares, of the value of Rs. 2,10,000/-, attended the meeting. Four shareholders representing 850 shares of the value of Rs. 85,000/attended the meeting of the transferee company. Both the meetings havo unanimously approved the scheme of amalgamation. On receipt of the chair-man's report, the petition was ordered to be advertised for hearing in this court and notices were also given to the Official Liquidator and the Central Government. No objection has been filed by any shareholder or creditor. It may also be mentioned that the Official Liquidator has. on scrutiny of the books and papers of the company, made a report under the second proviso to Sub-section (1) of Section 394 that the affairs of the transferor company have not been conducted in a manner prejudicial to the interest of its members or the public.
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