( 1 ) TWO issues of some importance arise in this the proposed transferee company's petition for sanction of a scheme of amalgamation. The registered offices of the transferor companies are situated in other states and the proposed transferor companies have applied for approval of the scheme from the appropriate High Courts.

( 2 ) THE first issue is as to whether the authorised capital of a transferor company merges into the authorised capital of the transferee company upon the scheme being sanctioned and implemented, along with the rights relating thereto. There are two aspects to such matter the first, whether following a scheme of amalgamation or complete merger the authorised capital of the transferor company gets added on to the authorised capital of the transferee company so that the post-amalgamation authorised capital of the transferee company swells by the amount of the authorised capital of the transferor company ; secondly, whether following such increase of the authorised capital of the transferee company, if permissible, the transferee company is not obliged to pay the additional fee for the increase in its authorised capital in terms of Schedule X to the Companies Act, 1956.

( 3 ) THE other issue is as to the treatment of the difference between the amount recorded as the additional share capital issued by the transferee company to the shareholders of the transferor companies in terms of the scheme and the amount of share capital of the transferor companies received by the transferee company in lieu whereof the additional shares of the transferee company are issued.

( 4 ) THE first limb of the principal issue in these proceedings, is, in effect, an issue as to the form, but this has a bearing on the second part of the issue. If by virtue of a scheme of amalgamation, all assets and liabilities of a transferor company merges into and vests in the transferee company and if the right to the unissued authorised capital is a property, the corollary may follow: the right accrued to a transferor company as to its authorised share capital upon payment of requisite fees therefor should also merge into and vest in the transferee company without the transferee company being required to pay additional fees for the consequential increase.

( 5 ) AUTHORITIES that rule the field, some as appealing in vintage as in flavour, have been placed by the petitioner to assert that the Act recognises the en masse journey of all properties and liabilities from a transferor company to the transferee following a scheme of amalgamation, such that there is only an imaginary existence of the transferor company thereafter.

( 6 ) COUNSEL for the petitioner has begun from the very beginning. The sixth and seventh editions of Black's Law Dictionary have been placed as to the definition of authorised share capital and the meaning thereof. Authorised capital or nominal capital is such value of shares that a company is authorised by its association documents to issue (Black's, 7th Ed. , page-200 ). Such definition in the later edition is not much at variance with the one found in the earlier edition of the book :

"authorised stock.-That amount of stock which the corporate character permits the corporation to issue. The shares described in the articles of incorporation which a corporation may issue. Modern corporate practice recognises authorisation of more shares than it is currently planned to issue. " (Black's, 6th Ed. , page 1416)

( 7 ) AUTHORISED or nominal capital is defined in the following words in words and Phrases Legally defined (3rd Ed. , Volume 1, page-219):

"nominal capital the word 'capital', as used in the Companies Act, 1948 [repealed; see now the Companies Act, 1985] and the statutes which it replaces, always means share capital in contradistinction to borrowed money, which is sometimes referred to as loan capital. It sometimes means the 'nominal' capital of the company, namely, that which is stated in the memorandum of association

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