LAWS(MAD)-1995-4-67

SUGARCANE GROWERS AND SAKTHI SUGARS SHAREHOLDERS ASSOCIATION KAVINDAIPPADI Vs. SAKTHI SUGARS LIMITED ERODE

Decided On April 17, 1995
SUGARCANE GROWERS AND SAKTHI SUGARS SHAREHOLDERS ASSOCIATION, KAVINDAIPPADI Appellant
V/S
SAKTHI SUGARS LIMITED, ERODE Respondents

JUDGEMENT

(1.) M/s. Sakthi Sugars, Limited, the respondent herein, was registered on 12th May, 1961 as a Public Limited company. The authorised capital of the Company is Rs. 20,00,00,000/- divided into 1,50,00,000 lakhs equity shares of Rs. 10/- each and 5,00,000/- Redeemable Cumulative Preference shares of Rs. 100/- each. The issued capital as on 31-3-1993, was 11.98 crores rupees and as on 31-3-1994, Rs. 15.48 crores. The subscribed and paid up capital as on 31-3-1993 was Rs. 11.86 crores and Rs. 15.36 crores on 31-3-1994.

(2.) M/s. Sakthi Soyas Limited is a public Limited Company, registered on 26-3-1986 with an authorised capital of Rupees 11,00,00,000/- divided into 90,00,000/- equity shares of Rs. 10/- each and 2,00,000 redeemable cumulative preference shares of Rs. 100/ -each. The issued, subscribed and paid up capital as on 31-3-1993 and 31-3-1994 is Rs. 8.15 crores. Herein after this company will be referred as 'the transferor company'.

(3.) In a meeting of the Board of Directors of the respondent company, held on 27-2-1994, it was decided to amalgamate the transferor company with the respondent as it was considered to be advantageous and beneficial to both the companies. In the opinion of the Directors such merger will enable the respondent to deversify its activities into a very good area with enormous potential for growth and also the transferor company to get adequate financial help. Similarly, in a meeting held on 29-3-1994, the Board of Directors of the transferor company decided to amalgamate the same with the respondent for the same reason. It should be mentioned that both the companies have a common Managing Director and they belong to the same group (Sakthi Group of Companies). The transferor company filed C.A. No. 263 of 1994 in this Court for necessary directions for convening and conducting an extraordinary General Meeting of the share-holders to consider the proposed Scheme of Amalgamation. The respondent filed C.A. No. 264 of 1994 for similar direction. By order dated 8-4-1994, the Court directed convening of meeting of the Equity Shareholders of the respective companies for the purpose of considering the scheme and appointed Sri. N.V. Kumar, Advocate, Coimbatore, as Chairman, of the Meeting. Pursuant thereto, notices were sent to all the equity share- holders along with copies of the proposed scheme of amalgamation besides Statement under S. 383 of the Companies Act as well as Forms of Proxy. The Notice was also published in one issue of 'News Today' and one issue of 'Malai Murasu'. The meeting of the transferor company was held on 13-5-1994 and of the respondent company on 20-5-1994. Resolutions were passed in both the Meetings approving the Scheme of Amalgamation subject to the approval of the Financial Institutions and such other necessary approvals. The respective Board of Directors was authorised to take all such steps as may be necessary or desirable to give effect to the Scheme of Amalgamation. It was also resolved to accept such alterations, modifications and or conditions, if any, which may be proposed, required or imposed by this Court while sanctioning the Scheme. The Advocate Chairman filed a report in the Court on 21-5-1994.