KAVERI ENTERTAINMENT LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) ADMIT. 1. 1 Heard finally by consent of parties.

(2.) THE facts that are relevant and necessary for deciding these two appeals are that Kaveri Entertainment Ltd. , which is the appellant in Appeal (L.) No. 314 of 2003 (hereinafter referred to as 'kaveri') is a company incorporated under the Companies Act, and so in Zee Telefilms Ltd. (hereinafter referred to as 'zee Telefilms') which is the appellant in Appeal (L.) No. 313 of 2003, Kaveri is a wholly owned subsidiary of the Zee Telefilms. The authorised, issued, subscribed and paid up capital of Kaveri as on 31 March 2002, i. e. , the date of the last audited balance-sheet is as under:<FRM>JUDGEMENT_37_TLMHH0_2003Html1.htm</FRM>

(3.) THE entire capital of Kaveri is held by Zee Telefilms and its nominees. The Board of directors of Kaveri passed a resolution deciding to approve a scheme of amalgamation of Kaveri with Zee Telefilms. The shareholders of Kaveri by letter dated 1 June 2002, gave their no objection to the scheme of amalgamation. Company Application No. 430 of 2002 was moved by Kaveri before this court. By that application, Kaveri sought an order of the court dispensing with the requirement of holding meeting of the shareholders of Kaveri for the purpose of approving the scheme of amalgamation on the ground that 100 per cent of equity shareholders in value of Kaveri have accorded their consent to the scheme of amalgamation. In paragraph 19 of the affidavit filed in support of Company Application No. 430 of 2002 -- it was stated that Kaveri had 53 unsecured creditors aggregating to Rs. 3,91,37,455 and that there are no secured creditors. It was stated that Kaveri is a profit-making company and that it has not defaulted on its obligation to make payment to the creditors. At Exh. F to the affidavit a statement was given, wherein a summary of the unsecured creditors was given. A perusal of Exh. F to the affidavit shows that unsecured creditors up to Rs. 25,000 are 30 in number and they represent 0. 49 per cent of the total amount outstanding against Kaveri. Creditors from Rs. 25,001 to Rs. 50,000 are five in number and they represent 052 per cent of the total amount outstanding. There are six creditors from Rs. 50,001 to Rs. 1 lakh and they represent 1. 24 per cent of total amount outstanding. There are six creditors from Rs. 1,00,001 to Rs. 10 lakhs and they represent 4. 12 per cent of total amount outstanding. It further shows that from Rs. 10,00,001 to Rs. 25 lakhs, there are two creditors and they represent 7. 43 per cent of total amount outstanding and from Rs. 25,00,001 and above there are four creditors, who represent 86. 11 per cent of total amount outstanding. It was further stated in paragraph 19 that under the scheme of amalgamation, the rights of existing members and creditors of Kaveri are not sought to be affected in any manner save as expressly provided in the scheme. Paragraph 19 of the affidavit filed in support of Company Application No. 430 of 2002 reads as under: