JALPAIGURI TEA CO LTD Vs. STATE

JUDGEMENT

(1.) This is an application under Sections 391, 392 and 393 of the Companies Act for sanction of an amalgamation proposed in the scheme which has been passed at the meetings of Jalpaiguri Tea Co. Ltd. and Bijoynagar Tea Co. Ltd. By the said scheme the whole of the undertaking of the petitioner No. 1, Jalpaiguri Tea Co. Ltd., is proposed to be merged and/or amalgamated with the petitioner No. 2, Bijoynagar Tea Co. Ltd., and the Jalpaiguri Tea Co. Ltd. is proposed to be dissolved without winding up under Sections 391 and 394 of the Companies Act. Jalpaiguri Tea Co. Ltd. was incorporated under the provisions of the Indian Companies Act on 29th May, 1879, as a company limited by shares and is an existing company within the meaning of the Companies Act, 1956. The registered office is at No. 11, Government Place East, Calcutta, and the authorised capital of the said company is Rs. 7,00,000 divided into 28,000 shares of Rs. 25 each; the amount of paid up capital is Rs. 7,00,000. The objects of the company for which the company was incorporated were, inter alia, as follows :

(2.) Petitioner No. 2 was incorporated on 24th June, 1925, under the provisions of the Indian Companies Act; registered office was also situate at No. 11, Government Place East; authorised capital is Rs. 20,00,000 divided into 80,000 equity shares of Rs. 25 each and the amount of paid up capital is Rs. 8,69,125. The objects of this company are various and have been set out in the memorandum annexed to the petition. I need not refer in detail to the said objects except the clause which provides, inter alia, as follows:

(3.) Jalpaiguri Tea Co. Ltd. is a subsidiary of the petitioner No. 2, Bijoynagar Tea Co. Ltd. It is the common case that originally the Jalpaiguri Tea Co. Ltd. had no power in its memorandum within its objects to amalgamate with any other company, either express or implied. The memorandum of Jalpaiguri Tea Co. Ltd. also is clear and it cannot be contended that originally it had power either express or implied to sell or dissolve the whole of the undertaking for amalgamation with any other company. Bijoynagar Tea Co. Ltd, also had no specific power to take over the undertaking of any company or to enter into scheme of amalgamation now sought to be proposed. It may, however, be contended that the clauses of Bijoynagar Tea Co. Ltd. contained an implied power specially in view of the clause which has been referred to hereinbefore. That, however, does not really solve the problem because what is being proposed by the scheme is taking over by the Bijoynagar Tea Co. Ltd. of all the assets and property of the Jalpaiguri Tea Co. Ltd. and consequent sale and dissolution of the Jalpaiguri Tea Co. Ltd. Therefore, it is important that the Jalpaiguri Tea Co. Ltd. should have that power in its objects either to sell the whole of the undertaking or to enter into this kind of scheme or arrangement. Subsequently resolutions were passed by the two companies altering the memoranda of associations and bringing within their objects the power to enter into compromises now being proposed. Two orders were passed on 18th September, 1972, by this court in Company Petition No. 333 of 1972 and Company Petition No. 334 of 1972 and the said alterations have been confirmed, but the certified copy of the said memorandum was filed with the Registrar of Companies under Section 18(3) on 3rd May, 1973. This application was made on 4th October, 1972. After this application was presented the court by an order dated 28th August, 1972, in Company Application No. 230 of 1972 directed the holding of meetings of the two companies. Such meetings have been held on 30th September, 1972. The meeting of the ordinary shareholders of the petitioner No. 1, that is to say, Jalpaiguri Tea Co. Ltd., was attended by ten ordinary shareholders in person and thirteen ordinary shareholders by proxy and/or through their authorised representatives and the total number of their shareholdings was 18,060. 12 shareholders of the company holding in the aggregate 3,780 ordinary shares had appointed one Mr. Rabindra Nath Mitra as their proxy to attend the said meeting, The chairman of the said meeting rejected the said proxies inasmuch as these were not in accordance with the prescribed forms of proxy sent to the shareholders. The chairman, however, permitted the said Mr. Rabindra Nath Mitra to participate in the voting at the said meeting. The scheme of amalgamation was read out and explained by the chairman as appears from the report of the chairman annexed and filed in this proceeding and was approved, according to the chairman, by requisite majority. The meeting of the shareholders of Bijoynagar Tea Co. Ltd. was held on 30th September, 1972, and was attended by twenty ordinary shareholders in person and eight ordinary shareholders by proxy or through their authorised representative and the total number of their shareholdings was 18,233. The scheme of amalgamation was approved at the said meeting unanimously, according to the report of the chairman. The said scheme approved by both the companies as mentioned hereinbefore is conditional upon the following :