APEX INVESTMENT PRIVATE LIMITED Vs. PROMAIN LIMITED

JUDGEMENT

(1.) By this petition under Section 391 (2) and Section 394 of the Companies Act,, 1956 (hereinafter referred to as the Act). M/s.Apex Investments Pvt. Ltd. (hereinafter referred to as the transferor company)and M/s. Promain Ltd. (hereinafter referred to as the transferee company)have jointly prayed for sanction of a scheme of amalgamation whereby thetransferor company proposes to transfer its entire assets and liablities to vest inthe transferee company to achieve best results of investments and finance activities of both the companies.The transferor company is a private limited company duly registeredand incorporated on 5th of May 1973 under the Act. The authorised capitalof the company originally was Rs. 5 lacs divided into 5,000 equity shares ofRs. 100.00 each. The share capital was increased to Rs. 10 lacs vide resolutionpassed in the Extra-ordinary General Meeting on 26th of February 1974. Later,by another resolution passed in Extra-ordinary General Meeting held on 26thof May 1988, it was further increased to Rs. 20 lacs divided into 20,000equity shares of Rs. 100.00 each. Since its incorporation in 1973, the companyhas been carrying on business of an investment company.

(2.) The transferee company is a public limited company registered andincorporated an 29th of October 1965 under the provisions of the Act. Theauthorised share capital of the company was Rs. I lakh originally divided into50,000 equity shares of Rs. 100.00 each, 30,000 Redeemable Cumulative Preference Shares of Rs. 100.00 each and 20,000 unclassified shares of Rs. 100.00each. On 28th of February 1983, vide special resolution passed at the 17thAnnual General Meeting, the share captial of the company was converted andthe paid-up value of the share was sub-divided. The same now stands as Rs. 1crore divided into 7.00,000 equity shares of Rs. 10.00 each, 30,000 RedeemableCumulative Preference Shares of Rs. 100.00 each. Objects of the company, asenumerated originally in the Memorandum and Articles of Associationinter alia, were to manufacture, hire, sell and lease out machines and plantsetc., to lend money, and to act as aninvestment company. By a special resolution passed at the 13th Annual General Meeting held on 26th of March 1979General Financing and Investments were specified as the main objects of thecompany. Thereafter the company has been carrying on the business of generalfinance and investments only.

(3.) The salient features of the Scheme are that with effect from thedate of transfer, the undertaking of the transferor company shall vest in thetransferee campany. Every holder of one equity share of Rs. 100.00 of the transferor company shall get 20 equity shares of Rs. 10.00 each of the transfereecompany. The employees of the transferor company shall become the employees of the transferee company. The liabilities of the transferor companyshall be taken over by the transferee company; and all pending proceedingsby or against the transferor company, all obligations, rights and claims, byor against the transferor company shall be that of the transferee company.