JUDGMENT

M. M. DAS, J. : In this application under Sections 391 and 394 of the Companies Act, 1956, a sanction of the scheme of arrangement for amalgamation has been sought for.

2. By order dated 21.4.2006, after hearing the company petition, this Court directed to advertise the petition in the newspapers, i.e., “The New Indian Express” and “The Samaja”, fourteen days before 12.5.2006 to which date, the case was fixed. it was further directed to serve a copy of the petition as per Section 394A of the Companies Act, 1956 on the Regional Director, Department of Company Affairs, Central Government, which is a necessary party, for obtaining the opinion of the Regional Direc¬tor and the Official Liquidator was also asked to submit a report before this Court by the aforesaid date. On 19.5.2006, when the matter was taken up, the Registrar of Companies representing the Regional Director produced a copy of the letter of the Regional Director wherein objections were raised to paragraph-10 of the scheme of amalgamation. The Official Liquidator has also submit¬ted his report.

3. Mr. D. K. Ray, learned counsel for the petitioner submitted that the objection raised by the Regional Director is not tenable. Objection as made by the Regional Director in para¬graph-1.1 of his letter-dated 10.5.2005 is as follows :-

“It is submitted that the authorized share capital of a company can be increased only after complying with the relevant provisions of the Companies Act, 1956 and payment of fees to the Registrar of Companies and stamp duty to the State Government. It is, therefore, submitted that the aforesaid clause may not be allowed by the Hon’ble Court.

4. Mr. Ray relying upon the decisions in the case of Hotline Hol Celdings Pvt. Ltd. and others, 112(2004) Delhi Law Times 627 and the decision of the Allahabad High Court in the case of Juggilal Kamlapat Holding Ltd, J. K. Investment Ltd. And Kanpur Investments Ltd. decided on 22.8.2005 submits that the objection of the Regional Director to the effect that the author¬ized share capital of the transferee company having been in¬creased to Rs.3,05,00000/- (three crores and five lakhs), the same cannot be permitted without complying with the relevant provisions of the Companies Act, 1956 and payment of fees to the Registrar of Companies and stamp duty, is not acceptable, as both the transferor company and the transferee company have paid the prescribed fees of their respective authorized share capitals and by virtue of amalgamation, the increase has occurred as share holders have been combined. Thus, no further fee or stamp duty is payable.

5. The Delhi High Court has held in the case of Telesound India Ltd. (1983) 53 Company Cases, 926 that amalgamation of a company with another or an amalgamation of two companies to form a third is brought about by two parallel schemes of arrangements entered into between one company and its members and the other company and its members and the two separate arrangements bind all the members of the companies and the companies, when sanc¬tioned by the Court. Amalgamation is, therefore, an absorption of one company into another or merger of both to form a third, which is not a mere act of the two companies or their members but is brought about by virtue of a statutory instrument and to that extent has statutory genesis and character, and to that extent, it is distinguishable from a mere bi-lateral arrangement to merge or join in a common endeavour, an undertaking or enterprise.

6. The Allahabad High Court in the case of Juggilal Kamla¬pat Holding Ltd. (supra) has categorically negatived a similar objection of the Regional Director by relying upon several deci¬sions of the Bombay High Court. The Bombay High Court in the case of Vasant Investment Corporation Ltd. v. Official Liquida¬tor, Colaba Land and Mills Co. Ltd. (1981)51 Comp. Cas 20, has held as follows :

“The whole purpose of Section 391 is to reconstitute the company without the company being required to mak