PATHERYA, J. - (1.) THIS is an application for sanctioning the scheme of amalgamation between petitioners Nos. 1 to 4 and petitioner No. 8 and the scheme of arrangement between petitioner No. 8 and petitioners Nos. 5, 6 and 7. Petitioners' case:
(2.) PURSUANT to order passed the chairpersons were appointed to conduct the meeting of the shareholders of petitioners Nos. 1 to 4 and 8. Advertisements were issued in the respective dailies intimating all shareholders the dates of the meetings. Meetings of the shareholders of both petitioners Nos. 1 to 4 and 8 were held under the chairmanship of the chairpersons appointed by this hon'ble court. Meetings of the petitioners Nos. 5, 6 and 7 were dispensed with pursuant to the order passed. The schemes were put to vote and were passed unanimously without any modification. This will appear from the report of the chairperson filed in respect of the petitioner companies. Thereafter, once again advertisements were issued in the dailies with notice to the Central Government. It is after the second round of advertisements that an affidavit has been filed by the Central Government and objections have been raised. Case of the Central Government: The Central Government has raised several objections which are as follows: As per clause 10(a) of Part -Ill, Part -IV and Part -V of the Scheme, Estates A, B and C of petitioner No. 8 is to vest in petitioners Nos. 5, 6 and 7. Such vesting is in an out right sale without allotting shares to the shareholders and therefore is likely to result in loss of revenue. The second objection raised is with regard to non -furnishing of details of the properties, its book value or market value in the scheme. The third objection relates to the valuation report prepared which recommends allotment of shares at a high premium. The fourth objection relates to avoidance of payment of stamp duty upon transfer of properties to petitioners Nos. 5, 6 and 7. The shares of the subsidiary companies can be sold by the board of directors at any price and without the approval of the shareholders. The transfer of properties under the scheme is to avoid payment of stamp duty and for no other reason. The fifth objection raised is with regard to the appointed date of the scheme of amalgamation and scheme of demerger being subsequent to the balance -sheet relied upon. Therefore, the details of assets and liabilities of the petitioners as on the appointed dates were not known to the shareholders. The sixth objection raised is regarding the method of valuation and the percentage of the holding company being increased beyond the permissible limits. The seventh objection raised is with regard to the insufficiency of the authorised share capital of the transferee company for allotment of shares. The eighth objection raised is with regard to the increase of share capital without payment of fees to the Registrar and adjustments which should be made as per the accounting standards prescribed by the Institute of Chartered Accountants of India, New Delhi. Therefore, for all the said reasons the scheme of amalgamation and the scheme of arrangement ought not to be sanctioned. Petitioner's reply:
(3.) COUNSEL for the petitioner submits that all requirements of Section 391(1) and Section 391(2) have been complied with. Advertisements have been published regarding the holding of meetings and the sanctioning of scheme. Meetings have been held under chairpersons appointed by court in the case of petitioners Nos. 1 to 4 and 8. The scheme of amalgamation and the scheme of arrangement have been approved by the majority shareholders as will appear from the chairperson's report. From consent letters given by the shareholders of petitioners Nos. 5, 6 and 7 approval is also evidenced. No shareholder has challenged the said scheme of arrangement. There is no allegation of violation of any statutory provision. There is compliance of Sections 391, 392 and 394 of the Companies Act, 1956. Each of the objections raised has been considered in earlier decisions and negatived.;