CHAUDHRY METAL INDUSTRIES PRIVATE LIMITED Vs. STATE

JUDGEMENT

(1.) In this petition under Sections 391 and 394 of the Companies Act, 1956, moved by the petitioner company concerning a proposed scheme of arrangement and amalgamation between the petitioner and M/s. Choudhari Metal Industries Private Ltd. I had passed an order on 19th April, 1976, sanctioning the compromise, but making allowance for some further orders to be passed under Section 394 when information had been obtained. The matter was processed in the Registry for drawing up a formal order in form No. 41 and the question of drawing up a formal order in form No. 42 was deferred. The report from the Registry was that there were certain defects in the scheme as sanctioned which had passed un-noticed and furthermore, the transfer date was mentioned as 30th April, 1974 and it had not been indicated as to when the scheme would come into operation. Furthermore, it was pointed out that the petitioner company was merging into M/s. Choudhary Metal industries (P) Ltd., which had its registered office in West Bengal. The effect of the order would have been that the company's assets would go to another company which was outside the jurisdiction of this Court and therefore, further orders may be difficult to pass. Though I do net fully agree "with the Registry's view, I saw the possibility of an eventual conflict and so I directed the matter to be relisted before the Court for passing an order which would finally dispose of the petition in every respects, i.e., I wanted to pass an order which would dispose of the petition both under Section 391 and Section 394 of the Companies Act, 1956 In order to pass this composit order, I have to give some of the grounds which have already been mentioned in the judgment dated 19th April, 1976. Inspite of the repetition involved, I think this is an appropriate case in which certain observations have to be made regarding the procedure to be adopted in cases of this type.

(2.) When the petition was originally moved before the Court, notice was issued to the Central Government and the Court also directed that a meeting of the share-holders of the transferee company should be held at Calcutta. I have referred to the order dated 4th March, 1975 and subsequent orders concerning this matter. A resolution of M/s. Choudhari Metal Industries (P) Ltd., was passed on 27th February, 1975, and an affidavit concerning the same has been filed. It is the affidavit of Shri Chanderakant U. Kamdar dated 26th March. 1975. It is stated therein that pursuant to the orders of this Court passed on 19th December, 1974, a meeting of the share-holders of M/s. Choudhari Metal Industries (P) Ltd.. was called for 27th February, 1975, to consider the proposed scheme of arrangement and the amalgamation between the petitioner company and M/s. Choudhuri Metal Industries (P) Ltd. The resolution was passed by the meeting and reads as follows :-

(3.) This affidavit, therefore, shows that the proposed scheme of arrangement and amalgamation between the two companies has obtained the approval of the transferee company by reason of the resolution just reproduced having been passed by the share-holders of the company. This fact was not noticed in the order dated 19th April, 1976, and is reproduced now in order to examine the full legal effect of the proposed scheme of reconstruction and amalgamation.