Salil Kumar Datta, J. - (1.) This is an appeal against the judgment and order dated February 21, 1973, passed by T. K. Basu J., whereby the rule obtained by the respondent on an application under Article 226 of the Constitution was made absolute. According to its case, the petitioner-respondent, a company, was incorporated under the laws of the United Kingdom as a subsidiary of Venesta Ltd., a company similarly incorporated, for the purpose of acquiring its foil business (hereinafter referred to as " the undertaking ") with an authorised share capital of 100 divided into 100 shares of 1 each. Out of the said shares, 2 shares as fully paid up were issued to Venesta Ltd. and the remaining shares were unissued. By and on the basis of an agreement dated December 31, 1959, the respondent purchased the undertaking as a going concern for consideration and under the terms and conditions mentioned therein. In pursuance of the agreement, the assets were taken over at their book value plus 8,63,000 being the surplus on revaluation of plant and buildings with liabilities and the residue of the consideration was paid and satisfied by the issue to Venesta Ltd. of 98 shares of 1 each of Venesta Foils Ltd. credited as fully paid up.
(2.) By and on the basis of another agreement dated November 30, 1961, India Foils Ltd., a company similarly incorporated as a subsidiary to Venesta Foils Ltd., purchased and acquired from the said company with effect from January 1, 1961, as a going concern that part of its undertaking comprising the Indian business consisting of manufacture and sale of aluminium foils and foil products carried on at its factory at Kamarhatty near Calcutta. The Indian business consisted, inter alia, of buildings, plant, machinery, raw materials at their book value shown in the books of the respondent on the date of transfer. As a part of the agreement, India Foils Ltd. took over all liabilities of the Indian business including a liability of 2,04,328. The residue of the consideration for the sale and purchase was satisfied by the issue of 998 shares of 1 each credited as fully paid up of India Foils Ltd. in favour of the Venesta Foils Ltd., out of the authorised capital of 1,000 on 1,000 shares (of 1 each), two shares as fully paid up having been already issued in its favour earlier.
(3.) The agreement between Venesta Ltd. and Venesta Foils Ltd. came into effect on January 1, 1960, and the assets and liabilities of Venesta Ltd. were brought into the accounts of the respondent. The book value of such assets taken over were entered in its books of account and the excess of the net value over the aggregate of liabilities taken over and the sum of 98 paid in shares, amounting to 46,68,966, was credited in the share premium account in the books of the respondent, Venesta Foils Ltd.;