The court has the discretion to sanction a scheme of amalgamation on such terms as it deems fit, considering the reasonableness, best interest of the companies, and compliance with statutory requirements.

T.N. Singh, J.

1. This common order shall dispose finally of two inter-linked petitions under Sections 591(1)(a), 392 and 394 of the Companies Act, 1956 (for short, "the Act"). On April 5, 1991, in these two quarters, notices were issued to the Registrar of Companies, Madhya Pradesh, Gwalior, and leave to serve the same on Shri N.P. Mittal, standing counsel of that respondent, was allowed. He was heard on June 29, 1991, when the matter was dealt with on that date in accordance with Rule 67 of the Companies (Court) Rules, 1959. A direction was made on that date for separate general meetings of the shareholders of the companies being held to consider the proposal of amalgamation of the two companies filing petitions separately in that regard in these two matters.

2. Shri R.A. Raman, advocate, was appointed as chairman of both the meetings. He submitted his report which was accepted and the order dated October 11, 1991, was accordingly passed. He reported that all formalities contemplated under the order dated June 29, 1991, were complied with in holding the meetings and that the requisite number of members present in each case of each of the companies, had unanimously approved the proposal of amalgamation. However, on the same date, directions were also made for notice of the petitions to go to the Central Government as contemplated under Section 394A of the Act ; the hearing date of the petitions, November 23, 1991, was fixed and it was directed that in two newspapers (English and Hindi) the notice in that regard shall be published. On January 31, 1992, objections came from the Registrar of Companies that the official liquidator is to be noticed and heard and that the transferor company had to obtain the requisite environmental clearance.

3. The official liquidator, Shri S.C. Gupta, appeared in person on March 25, 1992, when he was heard. At his suggestion, M/s. T.N. Unni and Co., chartered accountants, Indore, were appointed to prepare a report on the affairs of the petitioner, M/s. Spring Steels Ltd. (transferor company) after scrutiny of their books of account and other records and papers. On August 24, 1992, report dated August 20, 1992, of the official liquidator submitted on the basis of the enquiry made by M/s. T.N. Unni, was received in the registry and the matter was listed on September 5, 1992. Thereafter, on September 30, 1992, and November 4, 1992, the official liquidator was heard on his objections. It was found that the Registrar of Companies had to make his stand clear in respect of certain objections and, therefore, further hearing was deferred. On January 9, 1993, on an affidavit coming from the Registrar of Companies and his counsel, Shri N.P. Mittal, and the official liquidator, Shri S.C. Gupta, also being heard on final arguments made by the petitioner's counsel, hearing was concluded.

4. In both petitions, a common scheme of amalgamation is placed. It is exhibit C. The respective memorandum and articles of association of the two companies in each case is exhibit A. In each case, the managing director of the company has filed separately an affidavit stating facts in support of the scheme. These I have perused. The issued, subscribed and paid-up capital of the transferor company (petitioner Spring Steels Limited) is Rs. 35,16,700 while that of the transferee company (petitioner Gwalior Strips Limited) is Rs. 1,93,39,800. Both companies have their registered offices at Gwalior. In the memorandum of association of each of the companies, clause 9 authorises amalgamation with any other company or companies having similar objects, with or without liquidation of the company. The transferor company was incorporated on October 4, 1985, and the transferee company on April 22, 1984, One of the objects stated in the memorandum of the transferee company is to set up steel furnaces and continuous casting and rolling mill plant for producing steel and alloy ingots, steel and steel billets, and all kinds and sizes of re