CA No. 55 of 2010, CP No. 94 of 2010. Case: Techno Electric & Engineering Co. Ltd. Vs Super Wind Project Limited. High Court of Calcutta (India)
| Case Number | CA No. 55 of 2010, CP No. 94 of 2010 |
| Counsel | Mr. S. N. Mookherjee, Sr. Adv., Mr. Ratnanko Banerji, Adv., Mr. D. N. Sharma, Adv. and Mr. Ritwik Haldar, Adv. |
| Judges | Sanjib Banerjee, J. |
| Issue | Companies Act - Section 394(1) |
| Judgement Date | May 06, 2010 |
| Court | High Court of Calcutta (India) |
Judgment:
Sanjib Banerjee, J.
The scheme put up for sanction envisages the first petitioner holding company merging into the second petitioner subsidiary. The first petitioner is a listed company and the relevant stock exchanges have not indicated any objection.
No one has appeared to oppose the scheme despite advertisements. The Central Government has filed a scheme wherein it has been indicated that the accounting following the scheme should be in accordance with Accounting Standard -- 14; that some shareholders of the transferor company had voted against the scheme at the statutory meeting; and, that the scheme envisages the merged entity to take up the name of the transferor company which is being immediately dissolved without winding up.
At the time that the petition was presented, an order was made requiring the report of the Official Liquidator under the second proviso to Section 394(1) of the Companies Act to be prepared. The Official Liquidator reports that neither he nor the auditor appointed for the purpose had found that the affairs of the transferor company had been carried on in a manner prejudicial to the interests of its shareholders or prejudicial to public interest.
Upon a doubt expressed by Court as to whether a company could merge into another and lend its name to the merged entity without the public at large and others transacting with the transferor company being misled, several authorities have been brought to Court. The petitioners rely on Palmer''s Company Precedents (16th Ed.) and a passage from page 891 of Part 2 thereof that recognises that upon a company going into liquidation or its business being taken up completely by another, it is usual for such company to allow the new or the larger entity to take up the first company''s name. The petitioners rely on several passages from Butterworths Company Precedents (2nd Ed.) including passages from paragraphs 5 and 6 appearing at pages 1516-17 of Volume 6 thereof. It is recognised that in course of reconstruction or amalgamation of a company for the formation of a new company or a merged entity it is not unusual for the name of the old or merging company being allowed to be taken up by the entity that emerges upon the...
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