USHA MEHRA ( 1 ) M/s. Diamond International (P) Ltd. (transferee company), M/s. Diamond Polymers (P) Ltd. and M/s. Diamond Elastomers (P) Ltd. (transferor companies) had filed judges summons under Section 391 of the Companies Act, 1956 (hereinafter called the act ). The said company applications were registered as CAs. 374,375 and 376 of 1990 seeking directions for convening of meeting of its shareholders for the purposes of considering, and if thought fit, approving with or without any modifications, the arrangement proposed to he made between the compromise or arrangement as embodied in the scheme of amalgamation. C. A. No. 374/90 was moved by M/s. Diamond Polymers Pvt. Ltd. C. A. No. 375/90 was filed by M/s. Diamond Elastomers Pvt. Ltd. and C. A. No. 376/90 was filed by M/s. Diamond International Pvt, Ltd. seeking similar directions. ( 2 ) THE transferor and transferee companies have stated in their affidavits that all the companies inter alia deal in the manufacture, buy, sell, refine, prepare, import, export and to carry on business in minerals, nethylated and rectified spirits, dry or other colours, coalter dyes, die intermediates, raw materials, pigments dyes etc. and also deal in all type of containers, packing materials and articles of PVC, rubber plastic pollythance, paper, card board, wood or any other material. So far as M/s. Diamond Elastomers (P) Ltd. is concerned, it also deals in ail kinds of PVC footwear, PVC compound, Rubber Footwear with leather sole, canvas etc. It is in their petition that the amalgamated companies would enjoy the benefit of combined operation which would be beneficial for all. ( 3 ) THE premises of the transferor companies situated at A-9, Mayapuri Industrial Area, Phase-II, New Delhi, where the factory and registered office of these companies was Siuated was burnt on 5th May, 1988 because of devastating fire. This resulted in complete annithilation and destruction of machinery and plant and huge stock. Though these transferor companies received insurance compensation but it is not enough to rehabilitate the units. The cost of rehabilitation of the units would be much more because of the cost of machinery, plant and material going high. It would not be possible for these companies So function profitably. These companies have the license, technical knowhow, the expertise and also the technical staff which these companies want to utilize. The cost of rehabilitation of the units would be much more because of the cost of machinery, plant and material going high. It would not be possible for these companies So function profitably. These companies have the license, technical knowhow, the expertise and also the technical staff which these companies want to utilize. It was in this background, that these companies deem it fit to merge with the transferee company, which company is in the same line and business and has goodwill in the market. ( 4 ) WITH the amalgamation of the transferor companies, with the transferee company, the amalgamated unit will be in a position to manufacture and sell the products at profitable rates whereby the transferor companies will be able to survive and look after the interest of the employees, the trade creditors and the bankers from whom these companies had been enjoying the credit facilities. On amalgamation the total assets of the amalgamated unit will be more than sufficient to look after the secured liabilities due. In fact the scheme of amalgamation will be beneficial to all. ( 5 ) THAT in CA 374/90 directions were issued for holding and convening of the meeting of the shareholders of the companies and for issuing of citation in the newspapers namely "indian Express" New Delhi edition (English) and "navbharat Times" (Hindi edition) in accordance with the rules at least 21 clear days before the meeting. It was further observed that the meeting and quorum shall be in accordance with the Articles of Association of the companies. ( 6 ) THE meeting of the shareholders of the transferor and transferee companies were held at the registered office of the companies at A-9/1 and A/9 Mayapuri Industrial Estate, Phase II, New Delhi respectively on 18th May, 1991. The quorum was present as fixed by the Court. The scheme of amalgamation was approved unanimously by the shareholders without any modification. The report was filed by the respective Chairpersons. The registered office of the companies i. e. transferee as well as transferor companies are situated in the same industrial area. ( 7 ) THERE was no exemption specifically granted for not convening and holding the meeting of creditors. Mr. The report was filed by the respective Chairpersons. The registered office of the companies i. e. transferee as well as transferor companies are situated in the same industrial area. ( 7 ) THERE was no exemption specifically granted for not convening and holding the meeting of creditors. Mr. Kantawala, counsel for the petitioner, contends that vide order dated 9th July, 1990 the Court only directed for holding and convening of the meeting of shareholders, by implication it would mean that the Court granted the exemption from holding and convening the meeting of the creditors. The reason for not convening the meeting of the creditors of transferor company No. l was that there were very good creditors who had substantial interest and those were M/s. Lunawat and Co. and M/s. Grand Shoe Co. So far as M/s. Lunawat Co. is concerned, they are chartered accountant of this company. As regard M/s. Grand Shoe Co. , it had the notice of the meeting of the shareholders. As regard M/s. Elastomers Pvt. Ltd. transferor company No. 2, the substantial creditors were M/s. Lunawat i. e. the chartered accountant of the company and M/s. Diamond Polymers i. e. company No. 1. It was in this background that the Court did not direct for the convening and holding of the meeting of the creditors. Though no specific order had been passed for exemption of convening the meeting of the creditors, but from the explanation given by Mr. Kantawala and from the reading of the order of 9th July, 1990 in CA 374/90 inference can be drawn that the Court exempted the convening and holding of the meeting of the creditors. ( 8 ) CAS. 374 to 376 of 1990 were withdrawn by the petitioner vide order dated 5th November, 1990. These applications were dismissed as withdrawn. However, directions in respect of the meetings of the shareholders as directed in these CAs. were taken on record in Company Petitions No. 206 to 208 of 1992. After withdrawal of CAs. 374-376/90, the petitions were taken up in C. P. 206/92 to C. P. 208/92. C. Ps. 207 and 208 of 1992 pertains to the transferor companies and C. P. 206/92 to the transferee company. The companies have also stated in the petitions for confirmation that there is no reservation by any financial institution to the scheme of amalgamation. 374-376/90, the petitions were taken up in C. P. 206/92 to C. P. 208/92. C. Ps. 207 and 208 of 1992 pertains to the transferor companies and C. P. 206/92 to the transferee company. The companies have also stated in the petitions for confirmation that there is no reservation by any financial institution to the scheme of amalgamation. ( 9 ) NOTICE on petition for confirmation was issued to the Central Government and the Official Liquidator, and citation, in accordance with the rules was also published in the newspaper in which it was published earlier. ( 10 ) THE Central Government has filed the affidavit of Sh. R. C. Nigam, Regional Director, Northern Region, Department of Company Affair, stating therein that the Central Government has no representation to make in the matter. The Official Liquidator Sh. C. D. Paik in his report has stated that the proposed amalgamation will be beneficial to the transferor companies and transferee company more particularly to the shareholder of both the transferor companies. As per the Official Liquidator s report, as on 31st March, 1991 the liabilities of the creditors in respect of the transferor company No. l, M/s. Diamond Polymerse Pvt. Ltd. has been shown as Rs. 23,512. 33 p. and liabilities of creditors in respect of transferor company No. 2 i. e. M/s. Diamond Elastmers Pvt. Ltd. has been shown as Rs. 72,675. 50 p. It has further been stated that both the transferor companies have maintained proper books of accounts, statutory registers and other records and its examination revealed that there was no diversion and misutilisation of funds. Nothing objectionable has been induced which can be said as detrimental to the interest of their shareholders, creditors and public at large. That on scrutiny of statutory registers, books of accounts, minutes book and other records, the Official Liquidator came to the conclusion that affairs of both the transferor companies have not been conducted in the manner prejudicial to the interest of their creditors or shareholder and both the transferor companies can be dissolved without the process of winding up. ( 11 ) AFTER holding of aforesaid meetings and the filing of petitions for confirmation a citation was published. No one has filed objection to the scheme of amalgamation. The scheme of amalgamation has been approved by the shareholders of the companies unanimously. I have gone through the scheme. ( 11 ) AFTER holding of aforesaid meetings and the filing of petitions for confirmation a citation was published. No one has filed objection to the scheme of amalgamation. The scheme of amalgamation has been approved by the shareholders of the companies unanimously. I have gone through the scheme. The Memorandum and Articles of Association of these companies provide for amalgamation. The scheme envisages the transfer and vesting of all rights and claims of transferor companies to the transferee company, likewise all debts, liabilities, duties and obligations have been taken over by the transferee company. The scheme further envisages taking over all the employees of the transferor companies together with the benefit of continuity of service in the transferee company under the scheme on terms not less favourable to them. ( 12 ) THE scheme of amalgamation filed in C. P. 206/92 to C. P. 208/92 is approved with effect from the appointed date namely 31st December, 1989. The transferor companies namely M/s. Diamond Polymers Pvt. Ltd. and M/s. Diamond Elastomers Pvt. Ltd. stands dissolved without being wound up from the day the copy of this order is filed with the Registrar of Companies within 30 days from the date of this order. It is further directed that the scheme hereby approved shall be binding on all classes of shareholders and creditors. Any person interested shall be at liberty to apply to this Court for any direction that may be necessary. ( 13 ) THE Company Petitions No. 206 to 208 of 1992 are disposed of in terms of the above order. The formal order may be drawn by the Registry.