R. C. MANKAD, J. ( 1 ) THIS appeal is directed against the judgment and order dated 12/09/1986 passed by the learned Company Judge in Company Petition No. 30 of 1986 sanctioning the scheme of amalgamation of Neomer Limited (Neomer for short) with Alembic Chemical Works Company Limited respondent No. 1 Company (respondent-Company for short ). The appellants are the shareholders of the respondent-Company. Some of them are also employees of the respondent-Company. ( 2 ) THE authorised capital of the respondent-Company is Rs. 8 0 0 0 divided into 7 90 0 equity shares of Rs. 100. 00 each and 10 0 9 redeemable cumulative preference shares of Rs. 100. 00 each. The issued and subscribed capital of the respondent-Company is Rs. 3 46 92 0 divided into 3 44 920 equity shares of Rs. 100. 00 each fully paid up and 2000 9% redeemable cumulative preference shares of Rs. 100. 00 each fully paid up. The respondent-Company is engaged in manufacture and sale of pharmaceutical and chemical products. It is also authorised by its object clause to undertake to manufacture produce use buy and sell and otherwise deal or traffic in natural man-made and synthetic yarns stable fibers mono-filaments multi-filaments etc. The respondent-Company had promoted Neomer which is engaged in manufacture of Polypropylene Staple Fibre (PSF for short ). Neomer is also authorised by its object clause to manufacture produce use buy sell and otherwise deal or traffic in natural man-made and synthetic yarns staple fibres mono-filaments multi-filaments etc. It is also authorised to amalgamate with any other Company. The authorised capital of Neomer is Rs. 5 0 0 0 divided into 30000 0 equity shares of Rs. 10. 00 each and 20 0 0 unclassified shares of Rs. 10. 00 each. The issued and subscribed capital of Neomer is Rs. 2 95 77 500 divided into 29 57 750 equity shares of Rs 10/- each fully paid up and a sum of Rs. 1 42 875 being the amount of forfeited shares aggregating to Rs. 2 97 20 375 Neomer had in accordance with the policy of the Government of India set up a factory to manufacture PSF in a backward area at village Panelav district Panchmahals which is a notified backward district in the Gujarat State. 1 42 875 being the amount of forfeited shares aggregating to Rs. 2 97 20 375 Neomer had in accordance with the policy of the Government of India set up a factory to manufacture PSF in a backward area at village Panelav district Panchmahals which is a notified backward district in the Gujarat State. It appears that Neomer had to face number of difficulties and the production of PSF could be commenced only in early 1977. The concept of Neomer was to introduce PSF having very low price to replace wool and shoddy yarn products. However with the steep increase in prices of petroleum products (basic raw materials) during the subsequent years the expectation of sales and profitability could not materials. It is stated that at the same time the Indian market was full oriented to the use of well established fibres like Nylon Polyester and Acrylic. The production of Neomer remained at a low level on account of the aforesaid constraints and it had included heavy losses. The financial position of Neomer became very adverse due to continuous losses suffered by it. The large cash losses affected its liquidity position. As on 31/05/1985 its liabilities were 720. 82 lacs of rupees as against the tangible assets of Rs. 537. 01 lacs Thus the liabilities of Neomer for outweighed its assets. It became evident that the production of PSF alone cannot revive Neomer and because of its poor financial position Neomer was neither able to borrow funds nor was able to raise on its own the necessary funds to modify and/or diversify its activities. Under the circumstances the financial institutions who were secured creditors of Neomer submitted a proposal of amalgamating Neomer with the respondent-Company. It was suggested that the proposed amalgamation would not only provide necessary support financially but also result in certain concessions and reliefs. It was hoped that amalgamation would revive Neomer by better utilisation of production facilities of existing product lines and additional product lines like polypropylene multi-filament yarn and polypropylene non-woven products. It was noticed that there was wide application of polypropylene filement yarn. the respondent-Company which is engaged in pharmaceutical line was also in need of some diversification for improving long term profitability. It was hoped that required diversification would be provided by Neomer pursuant to the amalgamation. It was noticed that there was wide application of polypropylene filement yarn. the respondent-Company which is engaged in pharmaceutical line was also in need of some diversification for improving long term profitability. It was hoped that required diversification would be provided by Neomer pursuant to the amalgamation. With the amalgamation the respondent-Company would be able to use the present infrastructure of Neomer for both existing and new product line and it was felt that resultant production would be more economical. The respondent-Company would also be able to use infrastructure for its own purpose. The financial institutions also agreed that if the proposed amalgamation ultimately went through certain other concessions like waiving of compound and penal interest and phased out repayment of term loans can be provided to the respondent-Company. If the amalgamation was approved under Sec. 72a of the Income Tax Act the respondent-Company would get benefit of carried forward losses. It was in the aforesaid background that the Board of Directors of the respondent-Company and Neomer decided to amalgamate Neomer with the respondent-Company with effect from 1/01/1983 and framed the scheme of proposed amalgamation. The specified authority accorded its a proval to the proposed amalgamation under Sec. 72a of the Income Tax Act. The Central Government also approved amalgamation scheme under Sec. 23 (2) of the Monopolies and Restrictive Trade Practices Act. ( 3 ) BY an order dated 6/12/1985 passed in Company Application No. 231 of 1985 the learned Company Judge directed the respondent-Company to convene meetings of equity shareholders preference shareholders depositors trade creditors. debenture holders and secured creditors of the respondent-Company for the purpose of considering the aforesaid scheme of amalgamation. Notices of the meetings were served individually to the members of each of the above class together with a copy of the scheme of amalgamation and explanatory statement as required by Sec. 393 of the Companies Act. Notice of the meetings was also advertised as directed by the Court by advertisement dated 23/12/1985 Meetings were held on 23/01/1986 and the Chairman Mr. Notice of the meetings was also advertised as directed by the Court by advertisement dated 23/12/1985 Meetings were held on 23/01/1986 and the Chairman Mr. R. B. Amin submitted his report of the meetings to this Court on 31/01/1986 The scheme of amalgamation was approved by the meeting of equity shareholders by majority 1240 equity shareholders of the respondent-Company including proxies holding 2 4 739 equity shares voted in favour of the proposed scheme of amalgamation being adopted and carried into effect 174 equity shareholders including proxies holding 452 equity shares votedagainst the proposed scheme of amalgamation. It would thus appear that 87. 90% of the equity shareholders present and voting had voted in favour of the scheme was 99. 78% of the total votes cast. 12. 1% of the equity shareholders present and voting had voted against the scheme and the votes cast against the scheme was 0. 22% of the total votes cast. Meeting of the preference shareholders of the respondent-Company unanimously approved the scheme of amalgamation. The scheme of amalgamation was approved by the majority of depositors who were present at the meeting Out of 785 depositors who were present of the meeting 772 voted in favour of the scheme of amalgamation which 6 voted against. Meetings of trade creditors debenture holders and secured creditors unanimously approved the scheme of amalgamation. ( 4 ) IT is not disputed that similar meetings of creditors and members or class of members of Neomer were also held under the directions of this Court and at these meetings the scheme of amalgamation was approved. Thereafter both the respondent-Company and Neomer made petition under Sec. 394 read with Sec. 391 of the Companies Act for amalgamating Neomer with the respondent-Company. In other words petitions were made to this Court for sanctioning the aforesaid scheme of amalgamation. The learned Company Judge has by his impugned judgment and order sanctioned the scheme of amalgamation. Being aggrieved by the judgment and order passed by the learned Company Judge the appellants have preferred this appeal. ( 5 ) THE appellants learned Counsel Mr. In other words petitions were made to this Court for sanctioning the aforesaid scheme of amalgamation. The learned Company Judge has by his impugned judgment and order sanctioned the scheme of amalgamation. Being aggrieved by the judgment and order passed by the learned Company Judge the appellants have preferred this appeal. ( 5 ) THE appellants learned Counsel Mr. K. B. Pujara raised following contentions opposing the amalgamation of Neomer with the respondents-Company: (1) The explanatory statement under Sec. 393 of the Companies Act sent along with the notice did not disclose sufficient particulars which would have influenced the judgment of the shareholders and creditors in supporting or opposing the scheme of amalgamation. (2) There was no fair and adequate representation at the meetings of the shareholders creditors etc. (3) The exchange ratio of the shares of 40: I was unrealistic and unfair to the shareholders of the respondent-Company and favourable to the shareholders of Neomer. (4) The scheme of amalgamation is not legal inasmuch as it provides for payment of dividend to the shareholders of Neomer with retrospective effect in violation of Sec. 205 of the Companies Act. (5) The scheme of amalgamation is against the interest of the workmen of the respondent-Company. ( 6 ) SO far as the first ground of challenge to the scheme of amalgamation was concerned Mr. Pujara submitted that there was noncompliance with the provision of Sec. 393 of the Companies Act inasmuch as the statement which was required to be sent along with the notice 25 required by clause (a) of sub-sec (1) of the said Section did not explain the effect of the terms of amalgamation. Mr. Pujara submitted that in the statement sent along with the notice it was necessary to state all the relevant and material facts having bearing upon the scheme of amalgamation so that the creditors and members would be in a position to apply their mind intelligently to the true merits or demerits of the scheme of amalgamation. In the instant case submitted Mr. Pujara following material particulars were not disclosed in the statement (I) Financial particulars assets and liabilities of Neomer as on 1983 (appointed date ). (II) Financial particulars assets and liabilities of Neomer as on the date of last audited balance-sheet i. e. 31-5-1985. In the instant case submitted Mr. Pujara following material particulars were not disclosed in the statement (I) Financial particulars assets and liabilities of Neomer as on 1983 (appointed date ). (II) Financial particulars assets and liabilities of Neomer as on the date of last audited balance-sheet i. e. 31-5-1985. (III) The loss or profit incurred by Neomer after 1-1-1983 (appointed date) till the date of meeting or atleast upto the date of last audited balance sheet i. e. 31-5-1985. (IV) Contingent liabilities of Neomer as on 31-5-1985 for future payment of gratuity amounting to Rs. 2 0 448 not provided for in the hooks of accounts. (v)Contingent liabilities of Neomer as on 31-5-1985 for import duty payable on stocks in bonded warehouses amounting to Rs. 2 59 448 not provided for in the books of accounts. (VI) Total number of shares of Alembic required to be issued to the members of Neomer and amount of dividend @ 15% thereon payable for the year ended on 31-12-1983. (VII) Alembics commitment on discharge the huge liabilities of Neomer to the financial institutions amounting to Rs. 286. 56 lakhs as on 31 for the term loans repayable in 8 equal half yearly instalments between 1st half of 1986 and 2nd half of 1989 i. e. to say repayment of Rs. 71. 64 lakhs each year from 1986 to 1989. (VIII) Alembics commitment to discharge Neomers liability of interest on Term Loans upto 31-12-1984 amounting to Rs. 165 88 lakhs which is to be repaid by payment of 50% that is to say Rs. 82. 79 lakhs on the date of receipt of approved from the High Court and be paying the balance of 50% in the following year. (IX) Alembics agreement to write off its investment of 2 81 400 equity shares in Neomer having a face value of Rs. 28. 14 lakhs. (X) Alembics agreement to write off the loan amount of Rs. 10 lakhs given to Neomer. (XI) Condition imposed by the Central Government in its order dated 20 granting approval under Sec. 23 (2) of MRTP Act that the tax savings arising out of amalgamation during the Financial Years 1984 to 1988 shall be utilised by Alembic for the revival of the undertaking of Neomer. (XII) The details as to how share exchange ratio of 1 share of Rs. 100. 00 of Alembic for 40 shares of Rs. 10. (XII) The details as to how share exchange ratio of 1 share of Rs. 100. 00 of Alembic for 40 shares of Rs. 10. 00 each of Neomer was arrived at. ( 7 ) OUT of these 12 material particulars Mr. Pujara laid emphasis only on the non-disclosure of material particulars or details regarding share exchange ratio of one share of Rs. 100. 00 each of the respondent-Company for 40 shares of Rs. 10. 00 each of Neomer. According to Mr. Pujara it was not sufficient to state merely the exchange ratio without furnishing the date or material as to how such ratio was worked out It may be mentioned here that the exchange ratio was arrived at on the basis of the report of M/s. Dalal and Shah Chartered Accountants of Bombay. Since this report did not disclose as to how the ratio was actually worked out the respondent-Company with the consent of the appellants was directed to the affidavit of the Chartered Accountant explaining as to how the ratio was worked out. Mr. Yogendra C. Amin partner of M/s. Dalal and Shah Chartered Accountants has in compliance with the above direction; filed his affidavit wherein he has explained as to how the ratio was worked out. The working sheet from the file of the Chartered Accountants has also been filed along with the affidavit. Mr. Pujara submitted that this affidavit of Mr. Amin and the worksheet do not satisfactorily explain as to how the ratio was worked out. Mr. Pujara submitted that different yardsticks were applied for working out the value of the share of the respondent-Company and that of Neomer. Mr. Pujara submitted the some yardstick should have been applied for working out the value of the shares of the respondent-Company and that of Neomer; and unless that was done the ratio which was worked out could not be said to be fair or reasonable. Under the circumstances there was material omission in the statement annexed to the notice as required by Sec. 393 of the Companies Act. Mr. Pujara urged that on account of failure to disclose the manner in which the share exchange ratio was worked out the creditors and shareholders could not have arrive at an informed or intelligent decision regarding the scheme of amalgamation. ( 8 ) SECTION 393 (1) (a) in so far as is relevant in the context of which Mr. Mr. Pujara urged that on account of failure to disclose the manner in which the share exchange ratio was worked out the creditors and shareholders could not have arrive at an informed or intelligent decision regarding the scheme of amalgamation. ( 8 ) SECTION 393 (1) (a) in so far as is relevant in the context of which Mr. Pujara had made the aforesaid submissions reads as under:"393 Where a meeting of creditors or any class of creditors or of members or any class of members is called under Sec. 391 - (A)WITH every notice calling the meeting which is sent to a creditors or members there shall be sent also a statement setting forth the terms of the compromise or arrangement and explaining its effect; "it will be seen that the aforesaid provision on which reliance is placed by Mr. Pujara provides that the notice calling the meeting must contain two things: (i) a statement setting forth the terms of the compromise or arrangement; and (ii) explaining its effect. There is Do dispute that along with the notice a statement setting forth the terms of the scheme was sent. The contention of Mr. Pujara however is that the provision has not been complied with on account of failure to explain the effect of the scheme in the statement. ( 9 ) THE question whether the details as to how the share exchange ratio had been arrived at were required to be stated in the statement sent along with the notice under Sec. 393 (1) of the Companies Act had come up for consideration before N. M. Miabhoy J. (as he then was) In Re. Sidhpur Mills Company Ltd. AIR 1962 Gujarat 305: ( 1961 GLR 681 ). Dealing with the contention similar to the one which was raised by Mr. Pujara the learned Judge observed that the first part of clause (a) of Sec 393 (1) requires not only that the terms of the scheme must be stated but it further requires that the effect of the scheme must be explained. Therefore observed the learned Judge the statement must contain not only the terms of the scheme but also further explain as to what its effect would be. The clause does not state in terms as to the effect on what has got to be mentioned in the statement. Therefore observed the learned Judge the statement must contain not only the terms of the scheme but also further explain as to what its effect would be. The clause does not state in terms as to the effect on what has got to be mentioned in the statement. Broadly speaking however it is quite clear that what has got to be explained are not the details of the scheme but the effect which the Scheme will have obviously on such matters as to the welfare of the Company and the welfare of its shareholders or creditors with whose interests the scheme purports to deal. The learned Judge went on to observe that effect means consequence a condition which arises as a result of a certain course of action. If there is anything in the scheme compromise or arrangement which is not quite obvious to a person reasonably acquainted with the facts of a case by merely reading the terms of the scheme then a duty is cast upon the persons concerned to mention what the consequences will he if the scheme is approved of. In other words it is only the consequence or the result which has got to be explained which would arise on account of the approval of the scheme. If something is implied in the scheme which not obvious the same must be brought to the notice of the shareholders. In the case before the learned Judge the statement had mentioned that the shareholders of one Company (Bombay Company) would be given 1 3 equity shares of an other Company (Sidhpur Mills Company) for each share held in the former Company (Bombay Company ). The learned Judge observed that that matter was self-evident and would be known to anyone who cared to read the statement. It was observed that no further explanation on that particular point was called for. The details as to the way in which the ratio was arrived at is not a matter relating to the effect of the scheme. That was a matter of detail and pertained to things required to be considered for fixing the ratio. ( 10 ) WITH respect we are in full agreement with the view of N. M. Miabhoy J. (as he then was ). That was a matter of detail and pertained to things required to be considered for fixing the ratio. ( 10 ) WITH respect we are in full agreement with the view of N. M. Miabhoy J. (as he then was ). The dictionary meaning of the word effect so far as is relevant for our purpose given in The Random House Dictionary of the English Language is as follows:`. . . . . . . result; consequence. . . . . . . `effect means `consequence (s); result; this has reference to something produced by action or cause. In other words effect is that which is produced and as observed by Miabhoy J. a condition which arises as a result of certain course of action. The aforesaid clause (a) of Sec. 393 (1) does not lay down as to effect on what has got to be mentioned in the statement. When it speaks of explaining the schemes effect it does not mean details of the scheme or the particulars of the effect consequence or result which would follow the scheme. The requirement is to state and explain the effect and not the details or particulars of the consequence or result. In other words the basis or working on which certain consequence or result of the scheme would flow from the scheme is not required to be stated. It is only the resultant effect of the scheme which is required to be stated. As observed In Re. Sidhpur Mills Company Limited (supra) if there is anything in the scheme of compromise or arrangement which is not quite obvious to a person reasonably acquainted with the facts of the case by merely reading the terms of the scheme then a duty its cast upon the persons concerned to mention what the consequence will be if the scheme is approved of. If something is implied in the scheme which is not obvious it must be brought to the notice of the creditors and shareholders. In the instant case the share exchange ratio is clearly mentioned in the scheme. In other words it is made clear that in case the amalgamation of Neomer with the respondent-Company is approved the shareholders of Neomer would be entitled to one share of the respondent-Company in exchange for 40 shares of Neomer. In the instant case the share exchange ratio is clearly mentioned in the scheme. In other words it is made clear that in case the amalgamation of Neomer with the respondent-Company is approved the shareholders of Neomer would be entitled to one share of the respondent-Company in exchange for 40 shares of Neomer. In what manner this exchange ratio was worked out is not a matter which was required to be stated in the statement contemplated under Sec. 393 (1) (a) once this effect of the scheme namely that the shareholders of Neomer would as a result of the amalgamation get one share of the respondent-Company in exchange for 40 shares of Neomer was stated there was sufficient explanation of the effect of the scheme to the shareholders of the respondent-Company so far as the share exchange ratio is concerned. How the share exchange ratio was worked out was not the effect of the scheme; but a detail which was not required to be stated in the statement. Once the share exchange ratio who clearly stated the shareholders of both the Companies that is the respondent-Company and Neomer would be put on alert and if they had any doubt regarding the share exchange ratio they could have demanded the details of the share exchange ratio and the working thereof. Once the effect of the scheme is explained a duty cast under clause (a) of Sec. 393 (1) is discharged and nothing more was required to be done for complying with the said provision. We therefore find ourselves unable to accept Mr. Pujaras contention that in absence of details regarding working of the share exchange ratio in the statement there was failure on the part of the persons concerned to comply with the provisions of clause (d) of Sec. 393 (1) of the Companies Act; and consequently the shareholders of the respondent-Company could not arrive at the informed decision whether or not to approve the scheme of amalgamation. ( 11 ) AS pointed out above Mr. Pujara though referred to nondisclosure of several particulars enumerated above in the statement sent along with the notice under Sec. 393 (1) (a) his main challenge to the statement was confined to the ground that failure to state details as to how share exchange ratio was worked out resulted in non-compliance with the said provision. Pujara though referred to nondisclosure of several particulars enumerated above in the statement sent along with the notice under Sec. 393 (1) (a) his main challenge to the statement was confined to the ground that failure to state details as to how share exchange ratio was worked out resulted in non-compliance with the said provision. In other words besides enumerating nondisclosure of particulars mentioned above in the statement Mr. Pujara did not elaborate as to how failure to mention the above particulars would render the statement not in conformity with the provisions of clause (a) of Sec. 393 (1 ). We have already dealt with the main contention of Mr. Pujara with regard to the details of the share exchange ratio and in our opinion for the reasons which we have already set out above it was not necessary to state or disclose particulars which are enumerated hereinbefore in the statement. The requirement of the said provision is to send along with the notice a statement setting forth the terms of the scheme and explaining its effect. The terms of the scheme are set out in the statement in question and the effect of the scheme has also been explained. The financial particulars of the assets and liabilities present or contingent of Neomer etc. were not required to be stated in setting forth the terms of the scheme or in explaining the effect of the scheme. The statement clearly brings out that Neomer had incurred heavy losses and its financial position had become very acute. It is also stated that it has not given any returns to its shareholders from its inception. These were the material facts which were disclosed in the statement and the shareholders and creditors of the respondent-Company could have called for more details about financial position of Neomer it they thought that such details were necessary to arrive at a decision regarding scheme of amalgamation. It was stated before us that the financial particulars assets and liabilities Neomer and balance-sheets of Neomer were kept open for inspection of the shareholders and creditors. It is not the case of the appellants that they were prevented from taking inspection of the balance-sheets of Neomer or that the details of the financial position of Neomer which they had asked for were not supplied to them. It is not the case of the appellants that they were prevented from taking inspection of the balance-sheets of Neomer or that the details of the financial position of Neomer which they had asked for were not supplied to them. The only grievance which is made before us is that particulars regarding financial position etc. were required to be stated in the statement sent along with the notice as required by Sec. 393 and in absence of these particulars in the statement there was failure to comply with the said provision. We are unable to accept this contention. This disposes of Mr. Pujaras contention regarding financial particulars particulars regarding the assets and liabilities of Neomer liability to pay dividend to the shareholders of Neomer and the respondent-Companys commitment to discharge liabilities of Neomer covered by particulars (i) to (viii) enumerated hereinbefore we also do not see any substance in Mr. Pujaras argument that the statement should have specifically mentioned that as a result of the amalgamation the respondent-Company would cease to hold 2 81 400 shares in Neomer and that the loan of Rs. 10 lacs given to Neomer would stand written off. These would be the obvious consequences of the amalgamation. The respondent-Company cannot own its own shares nor can it be its own creditor. We also do not think that it was necessary to state in the statement that the Central Government had while according approval under Sec 23 (2) of the Monopolies and Restrictive Trade Practices Act directed that tax savings arising out of amalgamation during the Financial Years 1984 to 1988 shall be utilised by the respondent-Company for revival of the undertaking of Neomer. The requirement of the said provision (Sec. 393 does not go so far as to cast a duty on the persons concerned to state particulars as urged on behalf of the appellants in the aforesaid statement. We therefore reject Mr. Pujaras contention that it was necessary to state the aforesaid particulars in the statement and failure to do so results in non-compliance with the aforesaid provision contained in Sec. 393 (1) (a) of the Companies Act. With respect we do not agree with the learned single Judge of the Calcutta High Court in the matter of In Re. Carron Tea Co Ltd (1966) II Comp. LJ 278 on which reliance was placed by Mr. With respect we do not agree with the learned single Judge of the Calcutta High Court in the matter of In Re. Carron Tea Co Ltd (1966) II Comp. LJ 278 on which reliance was placed by Mr. Pujara that in absence of details regarding working of the exchange ratio of shares the explanatory statement could not be said to conform to the requirements of clause (a) of Sec. 393 (1) of the Companies Act. ( 12 ) NEXT contention of Mr. Pujara was that there was no fair representation of the shareholders and different classes of creditors at the meetings held under the directions given by this Court on 6/12/1985 in Company Application No. 231 of 1985. This argument is based on failure to disclose particulars and share exchange ratio referred to above in the statement sent along with notice under Sec. 393 of the Companies Act. The argument is that had the particulars and the details of the share exchange ratio been specified in the statement more shareholders and creditors would have come forward to attend the Meetings. Failure to state particulars and details of share exchange ratio in the statement has resulted in absence of many shareholders and creditors who otherwise would have attended the meetings and therefore the meetings could not be held to be truly representative. Is already held by us above it was not necessary to state the particulars and the details regarding share exchange ratio in the statement. The statement contained terms of the scheme and it had also explained the effect of the scheme. There was therefore compliance with the provision of Sec. 393 (1) (a) It cannot therefore be urged that on account of non-compliance with the said provisions meetings were not truly fairly or adequately represented. The report of the Chairman of the meetings reveals that equity shareholders of the respondents-Company holding 2 4 739 out of 3 44 920 equity shares voted in favour of the proposed scheme of amalgamation. In other words 87. 90% of the equity shareholders present and voting voted in favour of the scheme and the votes cast in favour of the proposed scheme of amalgamation were 99. 78% of the total votes cast. So far as the preference shares are concerned the shareholders holding 391 preference shares out of 2 0 such shares unanimously voted in favour of the proposed scheme of amalgamation. 78% of the total votes cast. So far as the preference shares are concerned the shareholders holding 391 preference shares out of 2 0 such shares unanimously voted in favour of the proposed scheme of amalgamation. The depositors trade creditors and secured creditors also unanimously voted in favour of the scheme of amalgamation. We therefore do not find any substance in the contention that meetings of various class of members and creditors were not adequately fairly or truly represented. ( 13 ) IT was next urged that the share exchange ratio was unrealistic and unfair to the shareholders of the respondent-Company and favourable to the shareholders of Neomer. It was submitted that the Chartered Accountant who had determined the exchange ratio had not given adequate and convincing reasons for the manner in which the ratio was worked out and the Chartered Accountants had not worked out the value of the share of the respondent-Company and the value of the share of Neomer by the same yardstick. In other words according to Mr. Pujara different methods were adopted for valuing the share of the respondent-Company and that of Neomer and consequently the share exchange ratio was not fairly worked out. In support of this contention Mr. Pujara relied on a decision of the Rajasthan High Court In Re. Cotton Agents (Rajasthan) Limited AIR 1968 Raj. 311 . ( 14 ) THE share exchange ratio was determined by M/s. Dalal and Shah Chartered Accountants of Bombay. In their report dated 27/12/1983 the Chartered Accountants have stated the principles which they have followed in determining the value of the shares of the respondent-Company and Neomer and determining the share exchange ratio. It appears from the report that the valuation of the shares was made on the basis of standard method of valuation having due regard to the value of the shares of both the Companies as quoted on the Stock Exchange. Since the details of the working of the exchange ratio was not stated in the report with the consent of parties the Chartered Accountants were directed to give details regarding working of the share exchange ratio. In compliance with the directions given by this Court Mr. Yogendra C. Amin partner of M/s. Dalal and Shah Chartered Accountants filed his affidavit with regard to the valuation of the shares. It appears that the shares were valued by Mr. Amin. The affidavit of Mr. In compliance with the directions given by this Court Mr. Yogendra C. Amin partner of M/s. Dalal and Shah Chartered Accountants filed his affidavit with regard to the valuation of the shares. It appears that the shares were valued by Mr. Amin. The affidavit of Mr. Amin discloses that the share of the respondent-Company was valued both on the basis of the yield method and break-up method and the average value was worked out on the basis of the valuation arrived at by two methods. The average value worked out to Rs. 200. 00 per share. The value of the share of Neomer was also worked out on the basis of yield and break-up method but in absence of maintainable profits and having regard to the liabilities the value of the equity share of Neomer was worked out at nil under both the methods. However having regard to the reasonable recompense to pass on the benefit to the extent of 50% of tax saving to the shareholders the value of the share of Neomer was worked out at Rs. 5. 00 per share. As already adverted to above in arriving at the valuation of the shares the Chartered Accountants had given due regard to the values of the shares of both the Companies as quoted on the Stock Exchange. The stock exchange quotations in regard to the shares of the respondent-Company and Neomer at about the relevant time are placed on record. It appears that on 23/12/1982 the equity share of Neomer was quoted at Rs. 5. 25 p. while the equity share of the respondent-Company was quoted at Rs. 12 1/12/1982 It may be recalled that the scheme of amalgamation comes into effect from 1/01/1983 and therefore the aforesaid quotations would have relevance in valuing the shares of both the Companies. If the quotation of Rs 5. 25 p. for equity share of Neomer on 23/12/1982 is taken into account the value of its share at Rs. 5. 00 made by the Chartered Accountants does not appear to be unfair or unreasonable. It may also be mentioned that the equity share of Neomer was quoted at Rs. 4. If the quotation of Rs 5. 25 p. for equity share of Neomer on 23/12/1982 is taken into account the value of its share at Rs. 5. 00 made by the Chartered Accountants does not appear to be unfair or unreasonable. It may also be mentioned that the equity share of Neomer was quoted at Rs. 4. 50 p. on 3/01/1983 This also shows that the valuation of equity shares of Neomer made by the Chartered Accountants was not unfair or unreasonable it also cannot be said that different yardsticks were applied for valuing the shares of the respondent-Company and Neomer. As already pointed out above the value of the shares of both the Companies were worked out on the basis of yield method and break-up method. So far as Neomer was concerned the value of its shares turned out to be nil under both these methods. However since the respondent-Company was going to get the benefit of carried forward losses in payment of incometax that factor and the quotation in the stock exchange were taken into account in working out the value of equity share of Neomer. However for that reason it could not be said that different yardsticks were applied in valuing the shares. It cannot be gainsaid that as a result of the amalgamation the respondent-Company would acquire all the assets such as buildings factory plant and machinery of Neomer. It is not disputed that the market value of these assets as on the effective date of amalgamation that is January 1 1983 was high though actual working is not placed on record. Therefore taking all the factors into consideration we are not prepared to hold that the share exchange ratio determined by the Chartered Accountants is unfair or unreasonable. ( 15 ) IT was next urged on behalf of the appellants that the shareholders of Neomer will get the benefit of dividend with effect from 1/01/1983 which is appointed as the date on which the scheme of amalgamation was to come into force. It was submitted that the scheme of amalgamation would not become effective unless it was sanctioned by the Court. The scheme is sanctioned by the Court on 12/09/1986 The shareholders of Neomer however will be allowed to receive dividends with effect from 1/01/1983 Therefore according to Mr. It was submitted that the scheme of amalgamation would not become effective unless it was sanctioned by the Court. The scheme is sanctioned by the Court on 12/09/1986 The shareholders of Neomer however will be allowed to receive dividends with effect from 1/01/1983 Therefore according to Mr. Pujara learned Counsel for the appellants the shareholders of Neomer will be paid dividends with retrospective effect. Mr. Pujara submitted that dividend was declared at the annual general meetings held in 1983 1984 and 1985 on the basis of profits made in the relevant years. These dividends were declared keeping in view only the shareholders of the respondent-Company and not the shareholders of Neomer. The shareholders of Neomer therefore cannot be paid dividends with effect from 1/01/1983 and if they are paid such dividends that would be in violation of the provisions of Sec. 205 of the Companies Act. ( 16 ) IT is not disputed by Mr. Pujara that the scheme of amalgamation can be made effective from a particular date. Mr. Pujara also did not dispute that in the instant case the amalgamation would be effective from 1/01/1983 and all the assets and liabilities of Neomer would vest in the respondent-Company and the shareholder of Neomer would in accordance with the share exchange ratio become shareholders of the respondent-Company with effect from 1/01/1983 His contention however was that the shareholders of Neomer cannot be paid dividends with effect from 1/01/1983 We do not see any force in this argument. If the amalgamation becomes effective from 1/01/1983 and if the shareholders of Neomer become the shareholders of the respondent-Company with effect from that date we fail to see how they can be denied dividends payable to them as shareholders of the respondent-Company with effect from 1/01/1983 It is true that unless the Court sanctions the scheme it would not become effective but once the Court accords its sanction it would become effective from the appointed date if the Court so directs. In the instant case the Court has directed that the scheme would become effective from 1/01/1983 Consequently the shareholders of Neomer would become shareholders of the respondent-Company with effect from 1/01/1983. In the instant case the Court has directed that the scheme would become effective from 1/01/1983 Consequently the shareholders of Neomer would become shareholders of the respondent-Company with effect from 1/01/1983. That being the position they have to be paid dividends on the same basis the shareholders of the respondent-Company were paid dividends with effect from 1/01/1983 They cannot be given discriminatory treatment once the shareholders of Neomer become the shareholders of the respondent-Company. In other words. they cannot be treated differently from other shareholders of the respondent-Company It was stated before us that it is proposed to pay dividends to the former shareholders of Neomer with effect from 1/01/1983 from the accumulated profits of the respondent-Company. it is not disputed that it is permissible to pay dividend out of the accumulated profits. In our opinion there is therefore no breach of any provision of the Companies Act in making payment of the dividends to the shareholders of Neomer as stated above. The dividend has not been paid to the shareholders of Neomer on account of interim relief granted by this Court pending the hearing of this appeal. There is no payment of dividend with retrospective effect as urged on behalf of the appellants. The former shareholders of Neomer will be paid dividend not with retrospective effect but with effect from the date on which they become shareholders of the respondent-Company. We therefore reject the aforesaid contention of Mr. Pujara. ( 17 ) THE last contention which was raised on behalf of the appellants was that as a result of the amalgamation of Neomer with the respondent-Company the interest of the workmen of the respondent-Company would be adversely affected That was a lame argument to oppose the amalga nation since it was conceded that it is not open to the workmen of the respondent Company to oppose the amalgamation The interest of the workmen of the respondent-Company was said to be adversely affected on three counts. namely; (i) apprehended transfer of the employees of the respondent-Company to Neomer; (ii) retrenchment of the employees of the respondent Company as a result of amalgamation; and (iii) bonus. So far as the transfer of the employees of the respondent-Company was concerned it was categorically stated on behalf of the respondent-Company that no such transfer would be made. namely; (i) apprehended transfer of the employees of the respondent-Company to Neomer; (ii) retrenchment of the employees of the respondent Company as a result of amalgamation; and (iii) bonus. So far as the transfer of the employees of the respondent-Company was concerned it was categorically stated on behalf of the respondent-Company that no such transfer would be made. It was stated on behalf of the respondent-Company that it had no intention of utilising the services of any of its employees at the unit of Neomer. It was also stated that no employee of the respondent-Company is going to be retrenched on account of amalgamation Therefore so far as the first two counts are concerned; the apprehension of the appellants is not well founded and even Mr. Pujara having regard to the statement made on behalf of the respondent Company did not seriously challenge the amalgamation on the ground that the interest of the workmen of the respondent-Company was likely to be adversely affected on the said two counts. However so far as the third count was concerned Mr. Pujara conten- ded that the bonus paid to the workmen of the respondent-Company would be substantially reduced as a result of the amalgamation It is not disputed that all the workmen would be entitled to payment of minimum bonus under the Payment of Bonus Act. The bonus in excess of minimum bonus is not a matter of right and it would depend upon the profits made by the respondent-Company This position also was not disputed. However the mere fact that the profits of the respondent-Company are likely to be reduced as a result of the amalgamation is no ground to refuse sanction of the amalgamation scheme. In fact as rightly conceded by Mr. Pujara the workmen of the respondent-Company had no locus standi to challenge the amalgamation on the aforesaid three counts. It was urged that the respondent-Company be directed to protect bonus of the workmen of the respondent-Company on the same lines as their apprehension regarding transfer and retrenchment was allayed. We do not consider it necessary to give any such direction. We have no doubt that the workmen of the respondent-Company would be paid bonus in accordance with law. ( 18 ) NO other ground was urged to assail the judgment and order passed by the learned Company Judge. We do not consider it necessary to give any such direction. We have no doubt that the workmen of the respondent-Company would be paid bonus in accordance with law. ( 18 ) NO other ground was urged to assail the judgment and order passed by the learned Company Judge. Since we do not find substance in any of the grounds urged before us we see no reason to interfere with the order passed by the learned Company Judge sanctioning the scheme of amalgamation. ( 19 ) IN the result this appeal fails and is dismissed. Ad interim relief vacated. No order as to costs. ( 20 ) MR. K. B. Pujara learned Counsel for the appellants makes oral application for certificate under Art. 134a read with Art 133 (1) of the Constitution of India for preferring appeal to the Supreme Court. In our opinion this case does not involve substantial question of law of general importance which needs to be decided by the Supreme Court We therefore reject the oral application made by Mr. Pujara. Appeal dismissed. .