Santosh Hegde, J. - (1.) (C.A. No. 4796/97) : This appeal with permission of this Court has been filed by the appellant against a judgment of the High Court of Gujarat at Ahmedabad whereby a cross-objection filed in O.J. Appeal No. 16 of 1994 in Company Petition No. 22 of 1994 by Mafatlal Industries Limited (MIL) the appellant in the connected appeal herein was dismissed, confirming certain finding given by the learned Company Judge in Company Petition No. 22 of 1994 in a petition seeking sanction of Amalgamation Petition under Section 391 of the Companies Act.
(2.) Brief facts necessary for the disposal of this appeal are as follows :- The appellant herein is a Public Limited Company having its registered office in Mumbai. Certain shares of M.I.L. were allotted to the appellant. The allotment of the said shares was challenged by 3 members of the M.I.L. in 2 suits in City Civil Court, Ahmedabad being Suit No. 3181 of 1987 and Suit No. 3182 of 1987. The appellant herein was not a party in that suit. The plaintiff in that suit obtained an order of interim injunction from the City Civil Court, Ahmedabad, inter alia directing MIL to maintain status quo in respect of the allotment of shares, said order was made on 27-6-1987. During the currency of the said interim order the MIL made a Rights Issue which doubled the holding of the appellant herein bringing the title holding of the appellant in MIL to about 3% of the total shareholding. MIL made an application for approving a Scheme of Amalgamation before the Company Court of the Gujarat High Court under Section 391 of the Companies Act in the month of November, 1994. It is seen from the record that the said Scheme had received approval of more than 94% of shareholders of the MIL which is much beyond the statutory requirement under the Companies Act. In the said petition for approving the Amalgamation Scheme, the first respondent herein questioned the allotment of shares by MIL to the appellant herein. Though, such allotment was made very much earlier to the proposed Amalgamation Scheme. The contention of the 1st respondent before the Company Court was that the shares allotted to the appellant were, intra alia, in contravention of the injunction issued by the City Civil Court. It is to be noted at this stage that the appellant was not a party to the proceedings before the Company Judge, in the proceedings for approval of the Scheme under Section 391 of Companies Act. The learned Company Judge whose jurisdiction under Sections 391 to 394 was limited to either approving or not approving the Scheme filed before him for amalgamation, by his order dated 14-11-1994 sanctioned the said Scheme on Amalgamation, he also came to the conclusion that even if the votes cast by the appellant were to be excluded from consideration the proposed Scheme had the support of the requisite majority in the General Body of the MIL. Hence, the objection of the 1st respondent in regard to the proposed Scheme of Amalgamation was not sustainable. However, the learned single Judge gave a finding that the allotment of shares in favour of the appellant was in breach of the injunction order of the City Civil Court.
(3.) Against the said order, the 1st respondent herein and MIL filed original appeal (OJ No. 16 of 1994) and cross appeal before the Division Bench of the said High Court. Even in the said appeal the appellant was not made a party. The Appellate Bench dismissed the challenge of the 1st respondent for the grant of approval to the Amalgamation Scheme but confirmed the findings of the trial Court that the allotment of the shares in favour of appellant by the MIL was in contravention of the injunction order. The approval of the scheme of amalgamation has since become final.;