EICHER LTD Vs. STATE OF MP

JUDGEMENT

(1.) THIS is a Company Petition filed by the petitioner-Company called "eicher Motors Limited" (hereinafter referred to as "transferee Company or "eml" for brevity) under Section 391 R/w Section 394 of the Companies Act for according sanction by this court for the scheme/arrangement embodied in the composite scheme of arrangement (Ex. 'g') entered into between the three companies viz. , Eicher Limited (for short called "el", "eml") and Malbros Investment Limited (for short called "malbros" ). In terms of the scheme of arrangement which is essentially in the nature of merger/demerger of undertakings, it is proposed to transfer the Automobile undertaking of 'el' to 'eml' and merger amalgamation of Malbros with EL. As stated supra the detailed terms/conditions of the proposed merger/demerger are set out in the scheme of amalgamation/composition in Ex. 'g'.

(2.) THE amalgamation/merger is sought essentially on the grounds, inter alia that it will facilitate synergies of the size and financial leveraging of the business of the automobile undertaking, that it will result in consolidation of the investment business of EL and would serve in best interest of EL as well as Melbros and their respective shareholders, that it will be in the interest of all shareholders of three companies referred supra, all other stake holders of all the three companies as also their creditors. It is also considered that the restructuring proposed under the scheme would enable focussed business proposal for the maximization of benefits to all stake holders and creating opportunity for future consolidation. In substance therefore, the amalgamation is proposed to enable the companies to help in improving their marketing share, self-dependency and competitive edge. It is also likely to result in bringing benefits of avoiding of intermediately cost, consolidation of resources, reduction in administrative expenses, overheads, duties payable including any kind of charges etc. It is felt that these are essentially the factors which are considered to be the one beneficial for the business of companies in their longer run in future years to come.

(3.) THIS court while deciding the earlier Company Petition No. 1 /2004 filed by the petitioner Company i. e. , EML as contemplated by Section 391/394 of the Act appointed Shri B. L. Pavecha, Senior Counsel as Chairman and failing which Mr. Ashok Garg, Senior Counsel to act as a Chairman. Accordingly Mr. Pavecha convened the meeting of shareholders as also that of creditors on 27-3-2004 after following due procedure prescribed under the Act and the Rules framed thereunder and as directed by this court in its order dated 9-2-2004 passed in Co. P. No. 1/2003 for issuance of notices to shareholders and creditors. The chairman has then submitted his report dated 31-3-2004 (Ex. 'i') in terms of Rule 78 of the Company Court Rules, 1959.