The judgment establishes the principle that the Company Court's role is to ensure compliance with statutory procedures and the interests of the shareholders, rather than to nitpick the scheme of amalgamation.

JUDGMENT - B.N. SRIKRISHNA, J.:---Appeals admitted.

2.Respondents waive service through respective Counsel. By consent, all three appeals are taken up for final hearing.

3.These three appeals under section 391(7) of the Companies Act, 1956 (hereinafter referred to as "the Act") are interconnected and arise out of three petitions under section 394 of the Act and hence they can be conveniently disposed of by a common judgment.

4.Appeal No. 2 of 2000 is directed against the Order of the learned Single Judge in Company Petition No. 1007 of 1998 dated 7th December, 1999 which is the principal judgment in which the learned Single Judge has given elaborate reasons for allowing the Company Petition No. 1007 of 1998. By two other orders of the same date, made in Company Petition Nos. 1008 and 1009 of 1998, the learned Single Judge, following his reasoning in the first order, allowed the petitions by short orders. Basically, what is under challenge in these three appeals is the reasoning of the learned Single Judge in the lengthy judgment in Company Petition No. 1007 of 1998. We shall, hereinafter, refer to the judgment of the learned Single Judge in Company Petition No. 1007 of 1998 as the judgment under appeal.

5.We have been taken through the judgment under appeal, and we find that the learned Single Judge has elaborately set out the facts of the three company petitions. It is not, therefore, necessary for us to set out or refer to the facts in detail. Nonetheless, we shall refer to the necessary and material facts to deal with the contentions that were urged in support of the appeals by the learned Counsel for the appellants.

6.The appellant is a trade union of Federation of the Employees of the company known as "BLUE STAR LIMITED" (B.S.L.). The appellant is registered as a trade union under the provisions of the Indian Trade Unions Act and claims to represent its member employees. B.S.L. was initially a company which did business in Air conditioners, but later developed a division known as "International Software Division" (I.S.D.) which was found to be very profitable in view of the boom in information technology. The company, for reasons of viability and cashing in on the boom in Information Technology, decided to spin off its extremely profitable I.S.D. into a separate company and transfer the ISD's assets to the said company. For this purpose, a scheme of amalgamation was proposed. The scheme of amalgamation made provision for protecting the interests of the employees of B.S.L., provided for reduction of the capital of B.S.L. by 25% and also for issuance of shares of the newly formed company "BLUE STAR INFOTECH LIMITED" (B.S.I.L.) in certain ratio. This scheme was approved by an overwhelming majority of the shareholders representing about 99.98% in value. It was also approved by the Financial Institutions who are creditors of the B.S.L. and hold about 9% stake in the shares of B.S.L. The scheme was however opposed by the appellant who is stated to represent shareholders of about 00.007% in value and creditors to the extent of about 50 lacs. We may mention here that as far as the creditors to the extent of 50 lacs are concerned, it was agreed by the respondent-company that their interests would be secured by a Bank Guarantee and such Bank Guarantee has been given so that creditors represented by the appellant are fully secured. The appellant thus represents shareholders who hold together shares in value of 0.007% to oppose the scheme on several grounds.

7.As a fall out of the scheme, an application under section 100 of the Companies Act was also made for reduction of the share capital of B.S.L. vide Company Petition No. 1009 of 1998.

8.A number of contentions were urged before the learned Single Judge to contend that the scheme was bad and could not be approved by the Company Court under section 394 of the Act. After considering all the contentions, the learned Single Judge was satisfied that there was no inherent flaw in the scheme a

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