In Re: Goldstone Softech Ltd.; in Re: Goldstone Engineering Ltd. - Court Judgment

Excerpt:
- cantonments act[c.a. no. 41/2006]. section 346 & cantonment fund (servants rules, 1937, rules 13, 14 & 15: [h.l. gokhale, ag. cj, p.v. hardas, naresh h. patil, r.m. borde & r.m. savant, jj] jurisdiction of school tribunal constituted under maharashtra employees of private schools (conditions of service) regulations act, (3 of 1978) held, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. the school tribunal constituted under section 8 of the maharashtra act cannot entertain appeals filed under section 9 by the employees working in schools which are established and administered by the cantonment board. teacher employed in the school run by cantonment board being covered under rule 2 (f) of the cantonment fund servants rules, 1937 can file appeal under rules 13, 14 and 15 to authorities provided therein against any order imposing any penalties etc. [deolali cantonment board v usha devidas dongre, 1993 mah. lj 74; 1993 lab ic 1858 overruled]. -- maharashtra employees of private schools (conditions of service) regulations act, 1978 [act no. 3/1978]. sections 9 & 2(21): jurisdiction of school tribunal whether a school run by cantonment board is not a recognised school within the meaning of section 2(21)? - held, the act is enacted to regulate recruitments and conditions of employees in certain private schools and provisions of the act shall apply to all private schools in the state whether receiving any grant-in-aid from the state government or not. private school is defined in section 2(2) of the act as a recognised school established or administered by a management other than the government or a local authority. recognised means recognised by director, the divisional board or state board. thus as far as the first part of the definition of being recognised is concerned, it includes, as stated above, four directors, the divisional boards and four state boards. the second part of this definition which comes after the comma refers to any officer authorised by director or by any of such boards. the question to be examined is whether school run by the cantonment board could be said to be one run by any such boards. a private school has to be recognised by the state or the divisional board or by any officer authorised in that behalf. when this phrase namely: recognised by any officer authorised by the director or by any such boards, is included in the latter part of section 2(21), such boards will be of the level of the state board or the divisional board. the boards referred to in the definition of the word recognised means the boards which deal with education at levels other than that of the level at which primary schools are operating. thus for being recognised, the school has to be recognised by the board and therefore, it has to be operating at a higher level i.e., secondary level. section 2(21) of the act defines the term recognised. the last clause therein is by any of such boards. the term such is defined in oxford dictionary as of the kind or degree indicated or implied by the context. therefore, the term such board will have to mean a divisional board of or the level of divisional board or the state board. the divisional board holds the examination and issues certificates after 10th and 12th standard examinations. the state board advises the state government on policy matters, ensures uniform pattern of secondary and higher secondary education, lays down principles for determining syllabi, prescribes text books, etc. the cantonment board does not discharge any of such duties nor is there any other board or body under the cantonments act discharging any such duties. the duties of the cantonment board are laid down in section 62 and amongst others, clause (xiv) lays down the duties of establishing and maintaining or assisting primary schools only. the cantonment board is not required to enter into the area of secondary education. therefore, school run by the cantonment board is a primary school and it is not a school recognised by any such board comparable to the divisional board or the state board. that being the position, it is not possible to accept it to be a recognised school for being a private school under the act. for the reasons state above, the school tribunal constituted under section 8 of the act cannot entertain appeals filed under section 9 by the employees working in schools which are established and administered by the cantonment board. [deolali cantonment board v usha devidas dongre, 1993 mah.lj 74; 1993 lab ic 1858 overruled]. - the merger would provide job security and improved job satisfaction of personnel at various levels due to strong financial position of the transferee company, and better benefits to the employees.orderkrishna saran shrivastav, j.1. these two applications are filed under section 394 of the indian companies act for approving the scheme of amalgamation of goldstone softech ltd. (for short 'transferor company') with goldstone engineering ltd. (for short 'transferee company').2. the authorised capital of the transferor company is rs. 25,00,000 divided into 2,50,000 equity shares of rs. 10 each and paid-up capital is rs. 23,68,000. the transferor company deals in buying, selling, hiring and letting on hire, leasing and taking on lease of office automation equipment, telecommunication equipments, tele-communication test equipment, electronic switching equipment, electronic equipment, computer hardware and software, computer peripherals, printed circuit boards, electronic computer systems, cable television systems, magnetic tapes, electronic control systems, process control systems and spare parts and accessories, etc. while the authorised capital of the transferee company is rs. 10,00,00,000 divided into 1,00,00,000 equity shares of rs. 10 each and issued, subscribed and paid up capital of transferee company is rs. 7,37,09,000. the main object of the transferee company is to carry on the business of manufacture, sell, export and to deal in assembly and improve all kinds of engineering, electronic and tele-communication components, devices, equipment and accessories including cable jointing kits, etc. it also intends to set up and to carry on business of information technology and to set up software development centres for undertaking on site and off-shore consulting services and systems, etc. the reasons for the proposed amalgamation have been more particularly set out in para 12 of the petition. some of the salient features of the scheme are to enable the transferor company to diversify into information technology business. the merger would provide job security and improved job satisfaction of personnel at various levels due to strong financial position of the transferee company, and better benefits to the employees. it would also enable the companies to raise adequate long term funds from financial institutions, banks, etc. the proposed amalgamation would be beneficial both to the transferor company and the transferee company as also to the creditors and the shareholders. all the assets and liabilities of transferor company would become the assets and liabilities of the transferee company. the transferee company shall allot one equity share of rs. 10 each fully paid-up for every one equity share of rs. 10 each fully paid-up held by the concerned member of transferor company.3. the transferor company had filed ca no. 756 of 1998 for dispensing with the meeting of the shareholders, and it was allowed on 18.1.1999. the transferee company had also filed ca no. 757 of 1998 for holding the meeting of the shareholders, and it was allowed on 18.1.1999. sri j.b. raju, advocate, was appointed as chairperson to hold meeting on 27.2.1999. notice of meeting was published in newspapers, and it was also sent to all the shareholders under certificate of positing. the meeting was held accordingly on 27.2.1999 at 11 a.m. and a unanimous resolution was passed for the proposed amalgamation. sri j.b. raju, advocate, has submitted his report on 5.3.1999. the petition filed in cp 25 of 1999 by the transferor company as also the petition filed in cp no. 26 of 1999 by the transferee company were advertised in one issue of news time as also in one issue of andhra prabha. the liquidator and the regional director of the company law board, chennai, were noticed. the liquidator filed his report in which it is stated that the transferor company has not been conducting its business and affairs in a manner prejudicial to the interest of its members and to the public interest. the regional director of the company law board in his report has stated that it is decided that no representation need be filed on behalf of the central government either to support or oppose the petition. therefore, it can be safely inferred that the regional director of the company law board has no comments to make, and he does not oppose and actually the proposed amalgamation, is not opposed by it.4. the transferor company has no creditors, while the transferee company has got two secured creditors, namely, the state bank of india and ifci. they have given their consent and no objection to the amalgamation through letter, dated 3.7.1999 and 8.7.1999, respectively.5. from the perusal of the record, it appears that the requisite statutory procedure has been complied with, that the scheme has been approved by the majority vote of shareholders, and that the secured creditors of the transferee company have given their consent for the proposed amalgamation. the shareholders of the transferor company have also filed affidavits through which they have approved the proposed amalgamation. the majority decision of the concerned class appears to be just and fair to the class as a whole. it does not appear that the proposed scheme of amalgamation is violative of any provisions of law and it does not appear to be against the public policy. the whole scheme appears to be just and fair and reasonable from the point of view of a prudent man of business. under these circumstances, both the petitions deserve to be allowed.6. in the result, it is ordered that the transferor company, i.e., goldstone softech ltd. be amalgamated with the transferee company, i.e., goldstone engineering ltd., with effect from 1.7.1998 as per the proposed scheme of amalgamation annexed with the petition with consequential reliefs as sought in the petition and, consequently, all the rights, liabilities and duties of the transferor company shall stand transferred and vested in transferee company, namely, goldstone engineering ltd., without any further act or deed and all the liabilities and duties of the transferor company shall also become the liabilities and duties of the transferee company, and, as a result, thereof, the transferor company shall stand dissolved without winding up, in view of the scheme of amalgamation being sanctioned.7. the petitioner-transferee company is directed to file a copy of the order with the registrar of companies within a period of thirty days and the registrar of companies shall treat the transferor company as dissolved with' effect from 1.7.1998. it is made clear that any person interested shall be entitled to apply to this court for any appropriate direction that may be necessary. costs as incurred. both the petitions are thus disposed of.

Judgment:
ORDER

Krishna Saran Shrivastav, J.

1. These two applications are filed under Section 394 of the Indian Companies Act for approving the scheme of amalgamation of Goldstone Softech Ltd. (for short 'transferor company') with Goldstone Engineering Ltd. (for short 'transferee company').

2. The authorised capital of the transferor company is Rs. 25,00,000 divided into 2,50,000 equity shares of Rs. 10 each and paid-up capital is Rs. 23,68,000. The transferor company deals in buying, selling, hiring and letting on hire, leasing and taking on lease of office automation equipment, telecommunication equipments, tele-communication test equipment, electronic switching equipment, electronic equipment, computer hardware and software, computer peripherals, printed circuit boards, electronic computer systems, cable television systems, magnetic tapes, electronic control systems, process control systems and spare parts and accessories, etc. While the authorised capital of the transferee company is Rs. 10,00,00,000 divided into 1,00,00,000 equity shares of Rs. 10 each and issued, subscribed and paid up capital of transferee company is Rs. 7,37,09,000. The main object of the transferee company is to carry on the business of manufacture, sell, export and to deal in assembly and improve all kinds of engineering, electronic and tele-communication components, devices, equipment and accessories including cable jointing kits, etc. It also intends to set up and to carry on business of information technology and to set up software development centres for undertaking on site and off-shore consulting services and systems, etc. The reasons for the proposed amalgamation have been more particularly set out in para 12 of the petition. Some of the salient features of the scheme are to enable the transferor company to diversify into information technology business. The merger would provide job security and improved job satisfaction of personnel at various levels due to strong financial position of the transferee company, and better benefits to the employees. It would also enable the companies to raise adequate long term funds from financial institutions, banks, etc. The proposed amalgamation would be beneficial both to the transferor company and the transferee company as also to the creditors and the shareholders. All the assets and liabilities of transferor company would become the assets and liabilities of the transferee company. The transferee company shall allot one equity share of Rs. 10 each fully paid-up for every one equity share of Rs. 10 each fully paid-up held by the concerned member of transferor company.

3. The transferor company had filed CA No. 756 of 1998 for dispensing with the meeting of the shareholders, and it was allowed on 18.1.1999. The transferee company had also filed CA No. 757 of 1998 for holding the meeting of the shareholders, and it was allowed on 18.1.1999. Sri J.B. Raju, Advocate, was appointed as Chairperson to hold meeting on 27.2.1999. Notice of meeting was published in newspapers, and it was also sent to all the shareholders under certificate of positing. The meeting was held accordingly on 27.2.1999 at 11 a.m. and a unanimous resolution was passed for the proposed amalgamation. Sri J.B. Raju, Advocate, has submitted his report on 5.3.1999. The petition filed in CP 25 of 1999 by the transferor company as also the petition filed in CP No. 26 of 1999 by the transferee company were advertised in one issue of News Time as also in one issue of Andhra Prabha. The liquidator and the Regional Director of the Company Law Board, Chennai, were noticed. The liquidator filed his report in which it is stated that the transferor company has not been conducting its business and affairs in a manner prejudicial to the interest of its members and to the public interest. The Regional Director of the Company Law Board in his report has stated that it is decided that no representation need be filed on behalf of the Central Government either to support or oppose the petition. Therefore, it can be safely inferred that the Regional Director of the Company Law Board has no comments to make, and he does not oppose and actually the proposed amalgamation, is not opposed by it.

4. The transferor company has no creditors, while the transferee company has got two secured creditors, namely, the State Bank of India and IFCI. They have given their consent and no objection to the amalgamation through letter, dated 3.7.1999 and 8.7.1999, respectively.

5. From the perusal of the record, it appears that the requisite statutory procedure has been complied with, that the scheme has been approved by the majority vote of shareholders, and that the secured creditors of the transferee company have given their consent for the proposed amalgamation. The shareholders of the transferor company have also filed affidavits through which they have approved the proposed amalgamation. The majority decision of the concerned class appears to be just and fair to the class as a whole. It does not appear that the proposed scheme of amalgamation is violative of any provisions of law and it does not appear to be against the public policy. The whole scheme appears to be just and fair and reasonable from the point of view of a prudent man of business. Under these circumstances, both the petitions deserve to be allowed.

6. In the result, it is ordered that the transferor company, i.e., Goldstone Softech Ltd. be amalgamated with the transferee company, i.e., Goldstone Engineering Ltd., with effect from 1.7.1998 as per the proposed scheme of amalgamation annexed with the petition with consequential reliefs as sought in the petition and, consequently, all the rights, liabilities and duties of the transferor company shall stand transferred and vested in transferee company, namely, Goldstone Engineering Ltd., without any further act or deed and all the liabilities and duties of the transferor company shall also become the liabilities and duties of the transferee company, and, as a result, thereof, the transferor company shall stand dissolved without winding up, in view of the scheme of amalgamation being sanctioned.

7. The petitioner-transferee company is directed to file a copy of the order with the Registrar of Companies within a period of thirty days and the Registrar of Companies shall treat the transferor company as dissolved with' effect from 1.7.1998. It is made clear that any person interested shall be entitled to apply to this court for any appropriate direction that may be necessary. Costs as incurred. Both the petitions are thus disposed of.