Mathew, J. - (1.) This appeal is from an order dated 30-6-1973 passed by the Government of India dismissing an application filed by the appellant on 5-5-1972 under Section 23 (4) of the Monopolies and Restrictive Trade Practices Act 1969 (hereinafter referred to as the 'Act') for acquiring 100 per cent share capital of Shahjahanpur Sugar Private Ltd.
(2.) The appellant is a public limited company and is a subsidiary of United Breweries Ltd. and other companies interconnected with it. The appellant's undertaking consists of a sugar factory and a distillery for manufacture of liquor at Rosa. Shahjahanpur and another distillery at Asansol. The appellant's sugar factory at Rosa had been facing difficulties for some years on account of inadequate supply of sugarcane and to ensure regular and adequate supply of sugarcane, the appellant proposed to float a company with a share capital of Rs. 50 lakhs for the purpose of taking over the sugar unit of the appellant and for working it as an undertaking of the company to be formed. The proposal was that the appellant would be entitled to an allotment of 100 per cent shares in the new company and a further sum of Rs. 15,77,093/ - as consideration for transfer of the sugar unit. According to the appellant, its object in getting 100 per cent shares in the new company was to offer the shares to cane growers later on.
(3.) The appellant wrote a letter to the Secretary of the Company Law Board on 15l0-1971 stating that since the new company would be a subsidiary of the appellant, the approval of the Company Law Board under Section 372 of the Companies Act would not be necessary, in view of the provisions of clause (d) of sub-section (14) of the said Section. The Central Government in the Ministry of Industry and Company Affairs replied by a letter dated November 1, 1971, that the provisions of section 372 (2) of the Companies Act would be applicable to the acquisition of the shares by the appellant in the company proposed to be formed. The appellant, therefore, applied for permission under S. 372 of the Companies Act to acquire the 100 per cent shares of the new company upon its incorporation. The appellant was also told by the Central Government in its letter dated 5-1-1972 that Sections 22 and 23 of the Act would prima facie be attracted and that the appellant should file a separate application under the relevant section. The appellant had already intimated the Central Government, Department of Company Affairs on 17-11-1971 that the provisions of Sections 21, 22 and 23 of the Act would not apply to its proposal to acquire the shares of the company proposed to be formed for taking over the sugar unit of the appellant. However, the appellant filed an application dated 5-5-1972 purporting to be under Section 23(4) of the Act. The new company proposed to be set up by the appellant was incorporated on June 15, 1973 under the name of Shahjahanpur Sugar Private Limited. By order dated July 2, 1973, the Central Government in the Department of , Company Affairs rejected the appellant's application under Section 372 (4) of the Companies Act for investing Rs. 50 lakhs in the equity shares of the capital of Shahjahanpur Sugar Private Limited. By another order dated 30-6-1973, the Central Government, in the Department of Company Affairs also rejected the appellant's application under Section 23 (4) of the Act. As already stated this appeal is against the latter order under Section 55 of the Act.;