JUDGMENT - D. G. KARNIK, J.:---Zee Inter Active Media Limited (hereinafter referred to as "the transferor company), who is the petitioner in Company Petition No. 1096/01 is proposed to be amalgamated with Siti Cable Network Limited (hereinafter referred to as 'the transferee company') under a scheme of arrangement proposed under sections 391 to 394 of the Companies Act. In Company Petition No. 1096/01, the transferor company seeks approval and sanction of the scheme.

2. In Comp. P. No. 1097 of 2001, the transferee company seeks approval of the scheme of the merger and amalgamation of the transferor company into it.

3. The transferor company has a paid up capital of only Rs. 700/- and it is a wholly owned subsidiary of the transferee company. The transferor company was incorporated on 5-5-2000 and certificate of commencement of business was granted to it on 7-6-2000. The transferor company however had not commenced commercial operations till the end of the accounting year 2000-2001, ending 31-3-2001. A statement has been made in the Directors Report dated 14-8-2001 of the transferor company that the company had not commenced operations during that year.

4. By an order dated 19-9-2001 of this Court (Coram : R.J. Kochar, J.) passed in Company Application No. 469/01, the convening and holding of the meeting of the equity share holders of the transferor company was dispensed with in view of the consent given by all the equity share holders of the transferor company. By the said order, holding of the meeting of the secured and unsecured creditors of the transferor company was also dispensed with.

5. By an order dated 19-9-2001 of this Court (Coram : R.J. Kochar, J) passed in Company Application No. 469/01 holding of the meeting of the secured and unsecured creditors of the transferee company was dispensed with; however, two separate meetings, one of equity share holders and another of preference share holders were convened on 19-10-2001. In the meeting of the equity share holders the scheme was approved subject to one modification viz. addition of Clause 5.3.3. in the draft scheme of amalgamation. The scheme was also approved in the meeting of the share holders with the same modification. A report of the Chairman of the meeting is annexed to Company Petition No. 1097/2001 as Exhibit-G.

6. The share holders of the transferor company also granted consent to the amendment of the scheme by addition of Clause 5.3.3 and gave a letter dated 22-10-2001 to the Board of Directors of the transferor company to that effect. Accordingly, scheme was modified and the modified scheme has been submitted for approval of this Court under section 391 of the Companies Act.

7. Notices of the two petitions were issued in Economic Times and Maharashtra Times, both dated 17-12-2001 and affidavits of publication have been filed. Notices of the petition were also issued to the Regional Director and the Official Liquidator.

8. The Regional Director appears through Shri C.J. Joy, Panel Counsel. Shri Joy states that the Regional Director has no objection for approval of the scheme.

9. Shri B.L. Meena, Official Liquidator is present in person who submits his report, dated 17-1-2002. In the said report, the Official Liquidator has certified that affairs of the transferor company have not been conducted in a manner prejudicial to the interest of it's members or to public interest. Official Liquidator submits that he has no objection for the sanctioning of the scheme.

10. At the hearing of the petition, Mr. B.A. Dilemma, Advocate appeared for two creditors of the transferor company, viz. R.P.G. Cables Limited and Ray Chem Limited and objected to the sanctioning of the scheme. Ms. S.D. Rane Advocate for the Modi Entertainment Network Limited and Doshi Brothers two creditors of the transferee company appeared and opposed the scheme. Shri Virag Tulzapurkar, Counsel for the petitioner submitted that he has no objection for the hearing of the creditors. Therefore, without goi

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