( 1 ) BOTH these Company Petitions are filed under Section 391 read with Section 394 of the Companies Act 1956 for obtaining sanction of the Court to a Scheme of Amalgamation of Gujarat Nylons Ltd. Surat (hereinafter referred to as GNL) with Gujarat State Fertilizers Company Limited Baroda (hereinafter referred to as GSFC and for other consequential directions.

( 2 ) APPLYING well established principles of law discussed hereinabove and taking into account the facts and circumstances of the case the Company petitions are required to be allowed by the petitioners. However an objection is raised on behalf of the Gujarat Nylons Employees Union (Union of the Transferor Company) Affidavit-in-reply is filed by Shri H. B. Vasia Secretary of the Union of the Transferor Company opposing the amalgamation of the Transferer Company with the Transferee Company and in particular objection was raised against clause 12 of the Amalgamation Scheme which reads as under: (13) On the scheme being effective all employees of the transferer Company shall be deemed to have become employees of the transferee Company with effect from appointed date without breaking their services and they shall continue to be governed by the terms and conditions of their employment with the transferor Company. (Emphasis supplied)

( 3 ) I have heard Mr. K. S. Zaveri the learned Counsel appearing on behalf of the Union and he has raised the following contentions:1 Mr. Zaveri contended that before an action of the proposed amalgamation a meeting of the workers of the transferor Company must be held and they have right to object against the proposed amalgamation. Since the meeting is not held all actions taken by the company can be said to be illegal and contrary to law and they are required to be quashed. 2 Mr. Zaveri further contended that the Union has locus standi when the proceeding of amalgamation are pending in this Court and the Union can object against the granting of sanction of amalgamation by the court. 3 Mr. Zaveri also contended that if the employee of the tramsferor Company are deemed to be employees of the transferee Company with effect from the appointed day they cannot be governed by the terms and conditions of the company which is not in existence. 4 Mr. Zaveri has further contended that as soon as the amalgamation will take place with effect from the appointed day in view of the provision made in clause 12 of the Scheme they are required to be treated as employee of the Transferee Company. If that is the petition it is not only absurd but arbitrary irrational and unreasonable that there will be two classes of employees and two sets of rules and regulations for the purpose of granting benefits in favour of the workers who can be said to be similarly situated. Such an action would prejudicially and adversely affect the interest of the workers of the Transferor Company and this Court should not grant sanction to such a scheme. 5 Mr. Zaveri therefore submitted that clause 12 of the Amalgamation Scheme is self-contradictory and is required to be suitably modified by making a provision that employees of the Transferor Company may not be governed by the terms and conditions of the transferor company but must be treated on par with the workmen of the Transferee Company with effect from granting of sanction to the amalgamation scheme and all benefits which are available to the workers of the transferee company must ipso facto be extended to the workmen of the transferor company.

( 4 ) AN affidavit-in-reply is filed by the Company Secretary inter alia contending that the points raised in the affidavit-in-reply of the Secretary of the Transferor Company are not well founded. It is contended that the application was filed at the belated stage with sole motive of prolonging the proceedings before the court. On merits it was submitted that no condition adverse to the employees of the transferor company is being imposed nor their pay scales are being adv