MCLEOD RUSSEL (INDIA) LTD., IN RE Vs. ABC

JUDGEMENT

(1.) This application has been filed under section 391(2) read with section 394 of the Companies Act, 1956 ('the Act') for sanction of a Scheme of Amalgamation of Mcleod Russel (India) Ltd. and Faith Investments Ltd., ('transferor companies'), with Eveready Industries India Ltd., (the 'transferee company'), whereby all the properties, rights, claims of the transferor companies, together with their undertakings, duties and obligations are proposed to be transferred and vested in the transferee-company on the terms and conditions set out in the said Scheme. Appearing for the petitioners, Mr. S.B. Mukherjee submitted that the financial standing of the transferor and transferee companies was beyond reproach. Mr. Mukherjee urged that the excess of assets over liabilities as far as Mcleod Russel (India) Ltd. was concerned was Rs. 5,61,23,37,434 that of Faith Investments Ltd. was Rs. 10, 39,76,223 and that of the transferee company, Eveready Industries India Ltd., was Rs. 2,99,90,48,000.

(2.) Mr. Mukherjee then submitted that Faith Investments Ltd., is a wholly owned subsidiary company of Mcleod Russel (India) Ltd., and the transferor companies and the transferee company were all under the same management. According to Mr. Mukherjee, while Mcleod Russel (India) Ltd., is engaged in the business of sale of tea produced at its various tea estates in Assam and West Bengal, the business of Faith Investments Ltd., is that of an investment company and the transferee company is engaged in the manufacture, production, sale of electrical batteries, starters, lamps, mechanical devices and appliances of different kinds and agriculture-based products. The transferee company is also engaged in the mining, manufacture, use, production and sale of various kinds of metals and minerals and alloys.

(3.) Mr. Mukherjee submitted that, although the transferor and transferee companies were engaged in different trades and business activities, they were all under the same management and, in fact, the transferee company is a subsidiary of Mcleod Russel (India) Ltd., while Faith Investments Ltd., is a wholly-owned subsidiary company thereof.