MALAYALAM PLANTATIONS (INDIA) LTD. Vs. ABC

JUDGEMENT

(1.) This is a petition filed under sections 391 to 394 of the Companies Act for amalgamation of the two companies, which are the petitioners herein. The petitioners are Malayalam Plantations (India) Ltd. (hereinafter referred to as the 1st petitioner) and Harrisons & Crosfield (India) Ltd. (hereinafter referred to as the 2nd petitioner). The petitioners filed MCA 33 of 1983 for directions to convene a meeting under section 391 of the Companies Act. This Court allowed that petition, and directed that a meeting of the members of the two companies may be held as specified in the order dated 9.8.1983. Accordingly, the meeting was held and the Chairman of the meeting filed reports which are produced along with this petition marked as Annexures K&L. The scheme for arrangement and amalgamation is produced along with the petition is Annexure C. The meeting in respect of the 1st petitioner-company was held on 28th Sept., 1983. In the meeting of 564 members of the company entitled together 13,47,960 shares and the total value of the shares is Rs 1,34,79,600; it was resolved by a majority of 13,13,160 against 34,575 that the scheme of arrangement and amalgamation should be approved and agreed to. The meeting of the 2nd petitioner- company, which was held on the same date, was attended either personally or by proxy by 137 members of the company entitled together 1,52,940 shares valued at Rs 15,29,400. It was unanimously resolved that the scheme of arrangement and amalgamation should be approved and agreed to. Accordingly, the petitioners have filed this petition for sanction of the scheme of arrangement and amalgamation and for consequential orders.

(2.) Notice to the Central Government was issued under section 394 of the Companies Act. Notice of hearing was published in newspapers as per rules on 20.1.1984 and on other dates. In those publications, the date of heaing was shown as 20.2.84. It was also mentioned in the notices, as required under rule 34, that every person who intends to appear whether to support or oppose the petition, shall serve on the petitioners or their Advocates, notice of his intention not later than two days previous to the date of hearing. There was no appearance on the date of hearing. The petition was being adjourned from time to time at the instance of the petitioners in order to enable them to produce the clearance under section 23 of the Monopolies and Restrictive Trade Practices Act, 1969. The clearance was obtained on 17.8.1984 and the order was filed in Court on 29.8.84. Meanwhile, on 10.8.84, Advocate Sri M Ramanatha Pillai filed a vakalath on behalf of two shareholders, namely Marykutty John and K K Pauly. Subsequently, they filed application 203 of 1984 on 23.8.84 prayiny that they may be allowed to intervene in this petition. On that petition, it was ordered that the petitioners will also be heard in CP 13 of 1983. (They are hereinafter referred to as interveners Nos I and 2). Two other shareholders, namely, Mathew Philip and Philip Mathew, filed application No 207 of 1984 on 23.8.84 praying to allow them to intervene in this petition. That petition was also allowed, and they will be referred as interveners Nos. 3 and 4. Accordingly, the interveners were also heard in this matter.

(3.) The question that has to be decided is whether the amalgamation proposed is to be sanctioned. The main objections that the interveners raise can be grouped under four heads: The first objection is that the companies who have filed this petition do not come within the expression 'company' as defined in section 390 (a) of the Companies Act in so far as they are not liable to be wound-up under this Act. The second contention is that the exchange ratio for the transfer of shares is not properly arrived at. Thirdly, it was contended that the objectives of the two companies are different; and therefore, in case the amalgamation is allowed, the functioning of the 1st petitioner company will be ultra vires its memorandrum and articles. The 4th contention is that the amalgamation ought not be sanctioned in the absence of a proper report of the official liquidator under the second proviso to section 394.