JUDGMENT

S.B.MAJMUDAR

(1) LEAVE granted.

(2) BY consent of the learned advocates of parties this appeal was taken up for final hearing. We have heard the learned advocates of parties. The appeal is being disposed of by this judgment.

(3) THIS appeal by special leave arises out of the judgment and order of a division bench of the High court of Gujarat in Original Jurisdiction Appeal No. 16 of 1994 decided on 12/7/1996. The division bench by the said impugned judgment dismissed the appeal of the appellant and confirmed the order of the learned Single Judge in Company Petition No. 22 of 1994 and sanctioned a Scheme of Amalgamation of two public limited companies, namely, Mafatlal Industries Limited (MIL for short) being the transferee- Company with which Mafatlal Fine-Spinning and Manufacturing Company Limited (MFL for short) being the transferor-Company was to be amalgamated. The learned Single Judge granted requisite sanction to the applicant transferee-Company MIL to amalgamate in it the transferor- Company MFL under Section 391(2 of the Companies Act, 1956 (hereinafter referred to as the Act). In order to appreciate the grievance of the appellant who objected to the Scheme moved by the respondent- Company MIL, as ventilated before us by its learned Senior Counsel Shri Shanti Bhushan, assisted by the learned counsel Shri M.J. Thakore, it will be necessary to glance through a few relevant background facts. Background facts

(4) THE respondent-Company MIL which was the petitioner before the learned Single Judge has its registered office at Ahmedabad in Gujarat State. It was incorporated on 20/1/1913 under the name "The New Shorrock Spinning & Manufacturing Co. Limited" and its name was subsequently changed to "Mafatlal Industries Limited" as per the fresh Certificate of Incorporation dated 24/1/1974 consequent upon change of name, as sanctioned by the Registrar of Companies, Gujarat, Ahmedabad. The objects of the transferee-Company MIL as per its Memorandum of Association, inter alia, included activity of carrying on all or any of the businesses such as cotton spinners and doublers, wool, silk, flax, jute and hemp spinners and doublers, linen manufacturers, to work spinning and weaving mills, cotton mills, jute mills and mills of any other description. The authorised share capital of the respondent-Company was Rs. 1,00,00,00,000.00 (Rupees one hundred crores only) divided into 30,05,500 equity shares of Rs. 100.00 each and 69,94,500 unclassified shares of Rs. 100 each. The subscribed share capital of the respondent-Company as on 31/3/1993 was Rs.26.30 crores (Rupees twenty-six crores thirty lakhs only) divided into 26,90,000.00 equity shares of Rs. 100 each.

(5) THE respondent-Company commenced the business of textiles and had been carrying on the same since incorporation. The respondent-Company is a large multi-division, multi-locational company carrying on diversified activities including manufacturing and sale of textiles, dyes - intermediates and chemicals, professional grade connectors, plastic processing machineries and promoting various companies through Project Promotion Division.

(6) THE MFL being the transferor-Company was incorporated on 20/4/1931 under the Baroda State Companies Act and had been carrying on the business of manufacture and sale of textile piece goods and chemicals. Its registered office was situated at Mafatlal Centre, Nariman Point, Bombay. It was engaged in the manufacture and sale of textiles and fluorine-based a chemicals. There were three units of the Textiles Division situated at (1 Vejalpur Road, Navsari, (2 Mazagon, Bombay and (3 Lower Parel, Bombay and the unit of the Chemicals Division was situated at Bhestan, District Surat.

(7) THE authorised share capital of the transferor-Company as on 31/3/1993 was Rs.. 30 crores (Rupees thirty crores only) divided into 30,00,000.00 ordinary shares of Rs. 100.00 each. The subscribed sha