JUDGMENT : M.M. Das, J. - Copet Nos. 15 and 17 of 2006 are applications under Sections 391 to 394 of the Companies Act, 1956 (for short, "the Act") seeking sanction of the scheme of amalgamation which has been annexed as annexure A to the petitions. The petitions have been supported by affidavits. Copet No. 15 of 2006 has been filed by the transferee company, namely, Indian Metals and Ferro Alloys Ltd. (for short, "the IMFA"). Similarly, Copet No. 17 of 2006 has been filed by the Indian Charge Chrome Ltd. (for short, "the ICCL") which is the transferor company. 2. The case of the petitioners (both the transferor and transferee companies) is that the ICCL was incorporated on December 28, 1982, under the Act having its registered office at Bomikhal, Bhubaneswar with an authorised capital of Rs. 90 crores which was divided into nine crores equity shares of Rs. 10 each. Then issued and subscribed capital of the ICCL is Rs. 58,12,16,800 consisting of 5,81,21,680 equity shares of Rs. 10 each. The company was incorporated with the main object of manufacturing charge chrome, ferro chrome and other chromium products and ferro alloys and to carry on business of such manufacturing, processing, importing, exporting and being appointed as agents, stockists, brokers, distributors, buyers, sellers of and dealers in charge chrome, ferro chrome and other chromium products and ferro alloys. The other objects of establishing the said company were production/generation of electricity by thermal power hydro or any other process for consumption, sale and distribution thereof and to obtain/take on lease or otherwise acquire chromite and other mines and to carry on mining operation of such minerals in such mines for processing the said extracted minerals for captive use in the company's furnace or for sale and/or export. The other ancillary objects of the company have been mentioned in the memorandum of association which do not require to be described in detail for the purpose of this case. It is the further case of the petitioners that the ICCL suffered huge losses which gradually accumulated beyond its control and the amount due to be paid to various financial institutions and banks went up a staggering high and became Rs. 2949.02 crores as on March 31, 2005. It is the further case of the petitioners that the ICCL suffered huge losses which gradually accumulated beyond its control and the amount due to be paid to various financial institutions and banks went up a staggering high and became Rs. 2949.02 crores as on March 31, 2005. When such debts became unserviceable and the financial condition of the transferor company, namely, the ICCL became an abyss, several banks and financial institutions approached the Debts Recovery Tribunal for recovery of their respective dues and as the net asset value of the said company, namely, the ICCL was far lower than its liabilities, the only recourse left open was to wind up the company. The petitioners have stated that about 1500 workers have been employed by the ICCL and there are over 50,000 shareholders and other unsecured creditors. 3. Under the above circumstances, the ICCL approached the lending financial institutions and banks for settlement of dues by restructuring the debts. The IDBI being the leading institution of the consortium of financial institutions and lenders, agreed to a structured settlement of dues on the terms and conditions mentioned in its letter dated July 24, 2006, annexed as annexure-B to Copet No. 17 of 2006. A scheme of arrangement in terms of the proposed settlement by the financial banks/institutions was prepared. The said scheme was accepted by all the financial institutions and financing banks. Accordingly, an appropriate application was filed before this Court for sanction of the scheme on which, by order dated September 10, 2003, this Court directed for holding of the meeting of the secured creditors. 4. The scheme of arrangement was approved in the said meeting by the requisite majority and thereafter the ICCL filed an application under Sections 391 to 394 of the Act for sanction of the scheme of arrangement. However, subsequently, the IDBI by its letter dated October 11, 2005, introduced certain amendments to the conditions of settlement relating to de-rating of equity share capital of the ICCL from 95 per cent, to 50 per cent, subject to payment of compensation. Accordingly, the present comprehensive composite scheme of arrangement and amalgamation was framed and the previous application filed before this Court was withdrawn. 5. Accordingly, the present comprehensive composite scheme of arrangement and amalgamation was framed and the previous application filed before this Court was withdrawn. 5. The rationality and justifiability of the present scheme has been mentioned in paragraph 5 of Copet No. 17 of 2006 which is quoted hereunder: Rationale, justification and benefits of the present composite of arrangement and amalgamation of ICCL into IMFA besides being pursuant to the structured settlement plan so as to save ICCL from being wound up as aforesaid is that the amalgamation will also result in the following benefits after amalgamation: (i) create a platform for capital raising and strategic partnership; (ii) realisation of synergetic benefits; (iii) leverage market position to enhance realization; (iv) tax efficiency; and (v) optimization of captive power plant and mines. 6. Copet No. 9 of 2006 was filed, along with the composite scheme of arrangement and amalgamation under Sections 391 to 394 of the Act in which by order dated February 17, 2006, this Court directed to hold separate meetings of the equity shareholders, secured creditors and unsecured creditors of the said transferor company and also separate meetings of the equity shareholders and unsecured creditors of the transferee company. It was also directed to hold meeting of the depositors of the transferee company, i.e., IMFA and the court appointed different chairman for the different meetings to be held. After such meetings were held, reports have been submitted by the respective chairman of the meetings. It appears from the said reports that none of the shareholders of the transferee company, i.e., IMFA, who were present and voting at the meeting, voted against the scheme. It also transpires that in the meeting, majority of the shareholders of ICCL, the transferor company, who were present and voting, approved the scheme including swap ratio, except for two shareholders who held 0.51 per cent, shares in ICCL, namely, one Bally Merchandise Ltd. and one Mr. Umesh Kumar Meheta. 7. It also transpires that in the meeting, majority of the shareholders of ICCL, the transferor company, who were present and voting, approved the scheme including swap ratio, except for two shareholders who held 0.51 per cent, shares in ICCL, namely, one Bally Merchandise Ltd. and one Mr. Umesh Kumar Meheta. 7. The scheme of arrangement and amalgamation having been accepted by the majority of the shareholders and by all the secured creditors and unsecured creditors of the ICCL, i.e., the transferor company and by all the shareholders and unsecured creditors of the transferee company, i.e., IMFA, the present petitions being Copet No. 15 of 2006 and Copet No. 17 of 2006 have been filed by the transferee and transferor companies respectively for sanction of the scheme of arrangement and amalgamation. 8. On filing of both the aforesaid petitions, notices were published in a widely circulated English newspaper as well as vernacular newspaper. On such notices being issued, two objections have been filed in Copet No. 17 of 2006, objecting to the scheme. One of the objections has been filed by two shareholders of the ICCL being Rasila Bhuphendra Shah and Bally Merchandise Ltd. The other objection has been filed by one Mr. Ajit Nain. 9. Before entering into the disputes raised by the objectors, it would be appropriate to state that during the course of the meeting of the shareholders, only one of the present objectors, namely, Bally Merchandise Ltd. objected to the scheme of arrangement and amalgamation. It would be further profitable to state that the objector Mr. Ajit Nain claims to be a joint shareholder along with his wife of the I.D.B.I., which, in turn, is a secured creditor of the transferor company, namely, ICCL and the said Mr. Nain also claims to be holding 300 equity shares along with his wife in the Indian Overseas Bank and 100 equity shares each in Punjab National Bank, Andhra Bank and Canara Bank which are all financing banks of the transferor company-ICCL. Submission made on behalf of Mr. Ajit Nain in support of his objection to the scheme 10. As stated earlier, Mr. Nain admits to be a shareholder of the financial institutions and banks, i.e., IDBI, Indian Overseas Bank, Punjab National Bank, Andhra Bank and Canara Bank, who in turn, advanced financial assistance to the ICCL. The objections precisely raised by Mr. Ajit Nain in support of his objection to the scheme 10. As stated earlier, Mr. Nain admits to be a shareholder of the financial institutions and banks, i.e., IDBI, Indian Overseas Bank, Punjab National Bank, Andhra Bank and Canara Bank, who in turn, advanced financial assistance to the ICCL. The objections precisely raised by Mr. Nain are that the transferor company-ICCL being a sick industrial company, a reference should have been made to the Board for Industrial and Financial Reconstruction (BIFR) and in view of the fact of sickness of the ICCL, the scheme of arrangement and amalgamation should not be sanctioned. It has been further stated in the objection that the said objector--Mr. Nain has filed a writ petition bearing W.P.(C) No. 6889 of 2004 before this Court seeking a direction to the BIFR to initiate appropriate proceeding against the transferor company. It appears that after filing of the said writ petition, the BIFR issued a show-cause notice to the transferor company which was duly replied by the said transferor company--ICCL contending that it is not a sick industrial company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 (for short, "the SICA") and, "as such, no reference was required to be made. It further appears that after receiving the said reply to the show-cause notice, the BIFR has not proceeded in the matter any further. Mr. Sen, learned senior counsel appearing on behalf of Mr. Ajit Nain vehemently contended that the objector being a shareholder of different financial institutions and banks who have advanced financial assistance to the ICCL is vitally interested in the present case seeking sanction of the scheme of arrangement and amalgamation between the ICCL and IMFA. He further submitted that the proposal in the scheme made by the financial institutions to waive Rs. 1,80, 069.00 lakhs from the amount due against the ICCL will adversely affect the finance of the said institutions including IDBI of which, the objector is a shareholder. On the above basis, Mr. Sen submitted that the objector has a legal right to object to the sanction of the scheme and it cannot be said that he has no locus standi to file the objection. On the above basis, Mr. Sen submitted that the objector has a legal right to object to the sanction of the scheme and it cannot be said that he has no locus standi to file the objection. He further brought to the notice of the court that in the notice published under Rule 80 of the Companies (Court) Rules, 1959, fixing the date of hearing of the petitions, it was clearly stipulated that any person desirous of supporting or opposing the said petition should send to the petitioners' advocate notice of his intention and whether he seeks to oppose the petition. The grounds of opposition along with a copy of the affidavit shall be furnished by the objector to the advocate for the petitioners. He, therefore, contended that since the notice contemplated filing of objection by any person, it cannot be said that Mr. Ajit Nain, the objector has no locus standi to file the objection. 11. Mr. Sen, learned senior counsel in support of his contentions relied upon the decisions in the case of Hindustan Lever and Another Vs. State of Maharashtra and Another, and the decision in the case of Miheer H. Mafatlal Vs. Mafatlal Industries Ltd.. In the case of Hindustan Lever and Another Vs. State of Maharashtra and Another the Supreme Court held that no individual living being owns the company, but each shareholder is the owner of the company to the extent of his shareholding. 12. On considering the aforesaid judgment, this Court is of the view that since Mr. Ajit Nain, the objector, is not a shareholder of the ICCL, the ratio of the above decision in the case of Hindustan Lever and Another Vs. State of Maharashtra and Another, cannot be made applicable to the present case in any manner. Reliance was also placed by Mr. Sen on the decision in the case of Miheer H. Mafatlal Vs. Mafatlal Industries Ltd., wherein the Supreme Court observed that the proposed scheme of compromise and arrangement in the said case was not found to be violative of any provision of law and was not unconscionable nor contrary to public policy. The Supreme Court further held that for ascertaining the real purpose underlying the scheme with a view to be satisfied on this aspect, the court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously x-ray the same. 13. The Supreme Court further held that for ascertaining the real purpose underlying the scheme with a view to be satisfied on this aspect, the court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously x-ray the same. 13. On the basis of the above observation of the Supreme Court, Mr. Sen submitted that in view of the present trend of decisions of the Supreme Court, the objector being a shareholder of the financial institutions and banks, who are parties to the scheme, he has every right to intervene in the proceeding and to raise objection to the scheme and thus, it cannot be said that he has no locus standi to file the objection. 14. The above contentions/objections of Mr. Sen can be reduced to the following points: (i) Mr. Ajit Nain being the shareholder of the financial institutions and banks who have advanced finance to the transferor company, the ICCL and parties to the scheme, has a right to object to the scheme and the said objection cannot be thrown out on the ground that he has no locus standi to file such objection. (ii) The transferor company-ICCL being a sick industrial company, the scheme of arrangement and amalgamation cannot be sanctioned by this Court as contemplated under Sections 391 to 394 of the Act. Submissions/contentions of Mr. Bijan Ray, learned senior counsel appearing on behalf of the objectors, namely, Rasila Bhupendra Shah and Bally Merchandise Ltd. 15. Both the aforesaid two objectors are admitted shareholders of the transferor company, the ICCL. From the report submitted by the chairman of the various meetings held, pursuant to the order passed by this court, discloses that Rasila Bhupendra Shah who is one of the objectors did not attend the meeting of the shareholders of the ICCL nor filed any objection to the scheme. Mr. Ray, learned senior counsel appearing for the objectors submitted that the promoters group of both the transferor and transferee companies have virtually bulldozed the minority shareholders and the scheme was pushed through. It is a fact that such an objection has not been taken in the written objection filed by the objectors before this Court on June 28, 2006. Mr. Ray further contended that one Mr. It is a fact that such an objection has not been taken in the written objection filed by the objectors before this Court on June 28, 2006. Mr. Ray further contended that one Mr. Mahipal Laxman held the proxy for 132 shareholders and, therefore, only 48 shareholders in toto were present during the meeting and thus, the meeting of the shareholders which was held pursuant to the direction of this Court has been vitiated. In support of his contention, he relied upon the decision in the case of KEC International Ltd. Vs. Kamani Employees Union and Others, However, on perusal of the said decision, it is seen that the facts of the said case are totally different and the court in the said case finding that the resolutions of the board of directors being fabricated, the meeting held was a sham one. The court in the said decision also took note of the fact that notices were also not issued to the shareholders. This Court is, therefore, of the view that the ratio of the said decision does not support the contention raised by Mr. Ray and is squarely distinguishable on facts. The further objection raised by the objectors was that the merger of ICCL with the transferee company, namely, IMFA is with the sole avowed purpose of grabbing the mining leases of ICCL. According to Mr. Ray, as reported in the newspaper in August, 2006, the ICCL was doing extremely well and there is absolutely no basis for amalgamating ICCL with IMFA. Mr. Ray contended that the shareholders of the ICCL will be at a loss as the ICCL is a listed company and IMFA is not listed in the stock exchange which would better the right of public shareholders to trade their shares. Various other case laws were cited by Mr. Ray which are not required to be referred to for the sake of brevity as they do not support the objections raised by the above named objectors in any manner. Mr. Ray strenuously urged that the latest financial position of the petitioner-company has not been furnished to the shareholders in terms of Section 391(2) of the Act and the audited accounts for the year ending March 31, 2005, which was furnished to the shareholders do not meet the requirement of law. Mr. Ray strenuously urged that the latest financial position of the petitioner-company has not been furnished to the shareholders in terms of Section 391(2) of the Act and the audited accounts for the year ending March 31, 2005, which was furnished to the shareholders do not meet the requirement of law. He produced the copy of the financial results of the ICCL down loaded from the internet for the quarter ending on March 2006. On the basis of the said financial position available in the internet, Mr. Ray submitted that the provisions of Section 391 of the Act having not been complied with, the petition seeking sanction of the scheme should be rejected in limine as non-disclosure of the said financial status amounts to suppression of material and deprives the shareholders from taking an appropriate decision as to whether to support the scheme or to oppose the same. It was further submitted by Mr. Ray that in the above facts, the maxim suggesrio falsi et suppressio veri can be made applicable to the present case. 16. Mr. Ray further submitted that the swap ratio, as calculated, which would be applicable if the merger of the two companies takes place, is baseless and incorrect. It appears that in paragraph 11 of the objection, it has been stated that in the explanatory statement attached to the notice convening the meeting of the shareholders of the transferor company, no reason has been assigned as to why the exchange ratio recommended by the two valuers has been accepted. Relying upon the above averments in the objection, Mr. Ray submitted that the entire purpose of the scheme is to cause illegal gain to the promoters of both the companies who belong to one family. Reply of the petitioners to the above objections. 17. Mr. S.B. Mukherjee, learned Counsel appearing for the petitioners submitted in reply to the contentions raised by Mr. Sen in support of the objection filed by Mr. Ajit Nain, that Mr. Nain being not a shareholder nor a creditor of the petitioner-company, i.e., ICCL, has no locus standi to file the objection. In the case of The Industrial Credit and Investment Corporation of India Limited Vs. Sen in support of the objection filed by Mr. Ajit Nain, that Mr. Nain being not a shareholder nor a creditor of the petitioner-company, i.e., ICCL, has no locus standi to file the objection. In the case of The Industrial Credit and Investment Corporation of India Limited Vs. Financial and Management Services Ltd. and others the court while considering the provisions of Section 391 of the Act held that since the scheme is essentially an arrangement between the company and its members and the shareholders and/or creditors or class of them, any person not falling in this category cannot come before the court when the negotiation of such scheme or arrangement is considered. The court further held that it is apparently clear that under the said provisions of the Companies Act, as they stand, the persons who are intervenors and are neither shareholders, members nor creditors of the transferee company have no locus standi to be heard in the proceeding. A similar view was expressed by the Delhi High Court in the case of In Re: Siel Limited;, The court in the said decision held that objection filed by Rashtrawadi Janhit Sabha, as a measure of public interest should be rejected at the very threshold as the said objector does not come under any of the categories mentioned in Section 391 of the Act. Besides the above two decisions, Mr. Mukharjee relied upon another decision of the Bombay High Court in the case of Shree Niwas Girni Kamgar Kruti Samiti Vs. Rangnath Basudev Somani, wherein a similar view was expressed by the said High Court holding that it is not permissible for the court to permit third parties to intervene in the matter in public interest. 18. In view of the above position of law and the views expressed in the decisions relied upon by Mr. Mukherjee, by various High Courts, I do not find it necessary to go into the other points of objection raised on behalf of Mr. Ajit Nain. Mr. Ajit Nain being not a shareholder/creditor of the transferor company as contemplated u/s 391 of the Act, has no locus standi to object to the scheme of arrangement and amalgamation and accordingly, the said objection is rejected. 19. In reply to the contentions of Mr. Bijan Ray, learned senior counsel appearing on behalf of the objectors, namely, Rasila Bhupendra Shah and Bally Merchandise Ltd., Mr. 19. In reply to the contentions of Mr. Bijan Ray, learned senior counsel appearing on behalf of the objectors, namely, Rasila Bhupendra Shah and Bally Merchandise Ltd., Mr. S.B. Mukherjee, learned senior counsel appearing for the petitioners submitted that it is not correct on the part of the said objectors to state that only 48 shareholders in toto were present during the meeting. As a matter of fact, Mr. Mohipal was himself a shareholder of the ICCL and was also a proxy holder for various other shareholders who voted in favour of the scheme. He further contended that the allegations that Mr. Mohipal acted in concert with the management of the ICCL and thereby fraud has been perpetrated on the shareholders and the court is out of a false and vexatious plea, as nothing has been brought before this Court to substantiate the said pleadings in regard to particulars of fraud are also absent. It was further submitted by him that there is no allegation that the minority were coerced to vote in favour of the scheme by the majority shareholders. From the report submitted by the chairman of the meeting of the shareholders of the ICCL, Mr. Mukherjee brought to the notice of this Court that the said meeting was attended by 176 shareholders holding 3,45,94,264 shares who were present either in person or through proxies/authorized representatives and voted at the meeting. Out of the said 176 shareholders, 174 shareholders holding 3,44,17,964 shares constituting 99.49 per cent, of those present and voting, voted in favour of the scheme with the modifications as proposed by the financiers. Only two shareholders holding 1,76,300 shares constituting 0.51 per cent, of those present and voting voted against the scheme. According to Mr. Mukherjee, nothing has been brought before this Court to disbelieve/ignore the report of the chairman of the said meeting with regard to the result of the meeting in which overwhelming majority of the shareholders have approved the scheme. In reply to the contentions of Mr. Ray that the merger is mala fide and is an attempt by the IMFA to grab the mining leases of ICCL, Mr. Mukherjee submitted that the said contention is beyond the pleadings and is ex facie false and without any basis. In reply to the contentions of Mr. Ray that the merger is mala fide and is an attempt by the IMFA to grab the mining leases of ICCL, Mr. Mukherjee submitted that the said contention is beyond the pleadings and is ex facie false and without any basis. He further submitted that no challenge having been made to the restructuring and/or the conditions imposed by the secured creditors for such restructuring of the debts of ICCL, the objectors, namely, Rasila Bhupendra Shah and Bally Merchandise Ltd., cannot have any objection to the scheme on the grounds advanced on their behalf. 20. In reply to the contention of Mr. Ray that the shareholders of the ICCL will be at loss, since the ICCL is a listed company and the IMFA is not listed in the stock exchange, Mr. Mukherjee drew the attention of the court to the scheme of amalgamation in paragraph 12.1.8 wherein it has been clearly stipulated that the shares of IMFA will be listed and the Bombay Stock Exchange has given its consent to the scheme of arrangement and amalgamation noting permission to list the merged entity in its letter dated May 11, 2006, which has been placed before this Court in COPET No. 17 of 2006. The further contention of Mr. Mukherjee with regard to the allegation of non-disclosure of the latest financial position of the ICCL to the shareholders, was that, the latest financial position of the said transferor company-ICCL as available on the date of the filing of the petition was provided to all the shareholders and the financial position as on the quarter ending March, 2006 which has been produced by Mr. Ray was prepared subsequent to the filing of the petition and, as such, there is no infraction of the provisions contained in Sections 391 to 394 of the Act. 21. In reply to the contention that the swap ratio as arrived with regard to the valuation of the units of the shares of the ICCL has not been correctly arrived at, Mr. Mukherjee submitted that, so far as the swap ratio of the shares is concerned, it has been worked out by recognized Indian firms of chartered accountants who are experts in the field of valuation. Mukherjee submitted that, so far as the swap ratio of the shares is concerned, it has been worked out by recognized Indian firms of chartered accountants who are experts in the field of valuation. He further contended that it has been settled in various decisions of the Supreme Court that if all material facts have been placed before the valuer and such valuer has arrived at a swap ratio, which is not vitiated by fraud, the court will not substitute its own ratio in its place. He further submitted that the majority of shareholders have accepted the swap ratio as has been arrived at, without demur and such an objection cannot be sustained. Conclusions of the court 22. As already concluded above, the objection filed on behalf of Mr. Ajit Nain is not entertainable as he has no locus standi to file such objection in the present case. 23. In order to appreciate the contentions of the respective parties, with regard to the objection filed on behalf of Rasila Bhupendra Shah and Bally Merchandise Ltd. and the various questions of law raised on their behalf, it is felt necessary to quote Sections 391 and 393 of the Act which are found in Chapter-V of Part-VI dealing with arbitration, compromises, arrangements and reconstructions. The relevant provisions thereof read as under: 391. (1) Where a compromise or arrangement is proposed-- (a) between a company and its creditors or any class of them; or (b) between a company and its members or any class of them; the court may, on the application of the company or of any creditor or member of the company, or, in the case of a company which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be to be called, held and conducted in such manner as the court directs. (2) If a majority in number representing three-fourths in value of the creditors, or class of creditors, Or members, or class of members, as the case may be, present and voting either in person or, where proxies are allowed under the rules made u/s 643, by proxy, at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the court, be binding on all the creditors, all the creditors of the class, all the members, or all the members of the class, as the case may be, and also on the company, or, in the case of a company which is being wound up, on the liquidator and contributories of the company: Provided that no order sanctioning any compromise or arrangement shall be made by the court unless the court is satisfied that the company or any other person by whom an application has been made under Sub-section (1) has disclosed to the court, by affidavit or otherwise, all material facts relating to the company, such as the latest financial position of the company, the latest auditor's report on the accounts of the company, the pendency of any investigation proceedings in relation to the company under Sections 235 to 251, and the like. 393. (1) Where a meeting of creditors or any class of creditors, or of members, or any class of members, is called u/s 391-- (a) with every notice calling the meeting which is sent to a creditor or member, there shall be sent also a statement setting forth the terms of the compromise or arrangement and explaining its effect; and in particular, staring any material interests of the directors, managing director, managing agent, secretaries and treasurers or manager of the company, whether in their capacity as such or as members or creditors of the company or otherwise, and the effect on those interests, of the compromise or arrangement, if, and in so far as, it is different from the effect on the like interests of other persons; and (b) in every notice calling the meeting which is given by advertisement, there shall be included either such a statement as aforesaid or a notification of the place at which and the manner in which creditors or members entitled to attend the meeting may obtain copies of such a statement as aforesaid. 24. 24. Interpreting the above provisions, the Supreme Court in the case of Miheer H. Mafatlal Vs. Mafatlal Industries Ltd., has held as follows: The aforesaid provisions of the Act show that compromise or arrangement can be proposed between a company and its creditors or any class of them, or between a company and its members or any class of them. Such a compromise would also take in its sweep any scheme of amalgamation/merger of one company with another. When such a scheme is put forward by a company for the sanction of the court in the first instance the court has to direct holding of meetings of creditors or class of creditors, or members or class of members who are concerned with such a scheme and once the majority in number representing three-fourths in value of creditors or class of creditors, or members or class of members, as the case may be, present or voting either in person or by proxy at such a meeting accord their approval to any compromise or arrangement thus put to vote, and once such compromise is sanctioned by the court, it would be binding to all creditors or class of creditors, or members or class of members, as the case may be, which would also necessarily mean that even to dissenting creditors or class of creditors or dissenting members or class of members such sanctioned scheme would remain binding. Before sanctioning such a scheme even though approved by a majority of the concerned creditors or members the court has to be satisfied that the company or any other person moving such an application for sanction under Sub-section (2) of Section 391 has disclosed all the relevant matters mentioned in the proviso to Sub-section (2) of that section. So far as the meetings of the creditors or members, or their respective classes for whom the scheme is proposed are concerned, it is enjoined by Section 391(1)(a) that the requisite information as contemplated by the said provision is also required to be placed for consideration of the concerned voters so that the parties concerned before whom the scheme is placed for voting can take an informed and objective decision whether to vote for the scheme or against it. On a conjoint reading of the relevant provisions of Sections 391 and 393 it becomes at once clear that the company court which is called upon to sanction such a scheme has not merely to go by the ipse dixit of the majority of the shareholders or creditors or their respective classes who might have voted in favour of the scheme by requisite majority but the court has to consider the pros and cons of the scheme with a view to finding out whether the scheme is fair, just and reasonable and is not contrary to any provisions of law and it does not violate any public policy. This is implicit in the very concept of compromise or arrangement, which is required to receive the imprimatur of a court of law. No court of law would ever countenance any scheme of compromise or arrangement arrived at between the parties and which might be supported by the requisite majority if the court finds that it is an unconscionable or an illegal scheme or is otherwise unfair or unjust to the class of shareholders or creditors for whom it is meant. Consequently it cannot be said that a company court before whom an application is moved for sanctioning such a scheme which might have got the requisite majority support of the creditors or members or any class of them for whom the scheme is mooted by the concerned company, has to act merely as a rubber stamp must almost automatically put its seal of approval on such a scheme. It is trite to say that once the scheme gets sanctioned by the court it would bind even the dissenting minority shareholders or creditors. Therefore, the fairness of the scheme qua them also has to be kept in view by the company court while putting its seal of approval on the concerned scheme placed for its sanction. It is trite to say that once the scheme gets sanctioned by the court it would bind even the dissenting minority shareholders or creditors. Therefore, the fairness of the scheme qua them also has to be kept in view by the company court while putting its seal of approval on the concerned scheme placed for its sanction. It is, of course, true that so far as the company court is concerned as per the statutory provisions of Sections 391 and 393 of the Act the question of voidability of the scheme will have to be judged subject to the rider that a scheme sanctioned by majority will remain binding on a dissenting minority of creditors of members, as the case may be, even though they have not consented to such a scheme and to that extent absence of their consent will have no effect on the scheme. It can be postulated that even in the case of such a scheme of compromise and arrangement put up for sanction of a company court it will have to be seen whether the proposed scheme is lawful and just and fair to the whole class of creditors or members including the dissenting minority to whom it is offered for approval and which has been approved by such class of persons with requisite majority vote. 25. The Calcutta High Court in the case of In Re: Maknam Investments Ltd. and Others, relying upon Sussex Brick Co. Ltd., In re [1960] 30 Comp Cas 536 : [1961] 1 Ch. 289 came to the conclusion that the mere fact that the scheme is open to valid criticism, is not unfairness and a scheme must be shown to be obviously unfair, patently unfair, unfair to the meanest intelligence and it cannot be said that no scheme can be effective to bind a dissenting shareholder unless it complies to the extent of 100 per cent, with the highest possible standards of fairness, equity and reason. 26. In the case of Miheer H. Mafatlal Vs. Mafatlal Industries Ltd., the Supreme Court has laid down the following contours of jurisdiction of the company court under Sections 391 to 394 as under: (i) The sanctioning court has to see whether the requisite statutory procedure was followed and the meetings have been held. 26. In the case of Miheer H. Mafatlal Vs. Mafatlal Industries Ltd., the Supreme Court has laid down the following contours of jurisdiction of the company court under Sections 391 to 394 as under: (i) The sanctioning court has to see whether the requisite statutory procedure was followed and the meetings have been held. (ii) Scheme put for sanction was backed by requisite majority votes as per Section 391(2) of the Companies Act, 1956. (iii) All relevant material was placed before the members and/or creditors and the majority decision is fair so as to bind dissenting members. (iv) Necessary material u/s 393(1)(a) of the Companies Act, 1956, was placed. (v) That all requisite material as per Section 391(2) of the Companies Act, 1956, is placed before the court for seeking sanction. (vi) The proposed scheme is not violative of any law or contrary to public policy. (vii) The members and/or the creditors acted bona fide and in good faith. (viii) The scheme is just fair and reasonable. 27. After holding as above, the Supreme Court has further held that once the aforesaid broad parameters are found to have been met, the court has no further jurisdiction to sit in appeal over the commercial wisdom of the majority of class of persons who have with their open eyes given approval to the scheme, even if in the view of the court there would be a better scheme for the company. The court cannot refuse to sanction such a scheme, as it would otherwise amount to the court exercising appellate jurisdiction over the scheme rather than its supervisory jurisdiction. 28. Be it stated that it is well-settled that the court while considering sanction of a scheme exercises its supervisory jurisdiction and not appellate jurisdiction. 29. On carefully scrutinizing the facts of the present cases, this Court is of the view that the scheme meets with all the aforesaid parameters as laid down in the case of Miheer H. Mafatlal Vs. Mafatlal Industries Ltd., All requisite statutory procedures have been complied with and by a previous order of this court, the meetings of the shareholders, unsecured creditors and secured creditors of the ICCL have been held. The report submitted by the chairman of the said meeting also suggests that the, scheme was accepted by an overwhelming majority of the shareholders present and voting. The report submitted by the chairman of the said meeting also suggests that the, scheme was accepted by an overwhelming majority of the shareholders present and voting. It is also found that all material facts were disclosed to the shareholders and creditors before the meetings were held. As a matter of fact, opportunity for inspection of documents was also given to all the shareholders and creditors. The explanatory statement giving all relevant materials was also open for inspection of the shareholders and this Court is of the view that nothing has been shown that the said explanatory statement suffers from gross infirmity and as such, no objection can be taken to the same. This Court also finds that the scheme is not violative of any law nor contrary to public policy. Rather, the scheme which is seeking restructuring of the debt of secured creditors and the merger is in accordance with the terms and conditions of the financial institutions and banks, no objection whatsoever has been raised challenging the restructuring of the debts or disclosing that the scheme is violative of any law or contrary to the public interest. Thus, it is found that the merger as well as the reduction is only a necessary consequence of the restructuring of the debts. This Court also finds that nothing has been brought before this Court to show that the minority shareholders were coerced to vote in favour of the scheme. It is also seen that in accordance with the provisions of Sections 394A and 394(1) of the Act notices were issued to the Regional Director as well as the official liquidator respectively to give their comments on the scheme in order to examine as to whether the scheme is contrary to public interest and as to whether the affairs of the ICCL have been conducted in any manner prejudicial to the interest of its members and the public. Both, the Regional Director as well as the official liquidator has filed their reports. The official liquidator has conducted an audit by appointing auditors to look into the financial affairs including the balance-sheet dated June 31, 2006, of the ICCL and has categorically reported that the audit did not reveal any information or indication that the affairs of the company has been conducted in a manner prejudicial to the interest of its members or the public. Even the swap ratio of 14:1 has been found, after auditing of the accounts, to be fair and reasonable. The Regional Director although has taken an objection regarding the stamp duty payable after merger due to increase in share capital, has found no violation of any law or that the scheme is contrary to public interest and/or interest of any shareholder. 30. In the case of Miheer H. Mafatlal Vs. Mafatlal Industries Ltd., the Supreme Court while dealing with the question of exchange ratio of equity shareholders so far as the transferee company is concerned, has held in the facts of the said case, that before formulating the proposed scheme of compromise and amalgamation, an expert opinion was obtained by the respondent-company as well as the transferor company from a reputed firm of chartered accountants, who having considered all the relevant aspects suggested the exchange ratio keeping in view the valuation of shares of the respective companies and valuation of shares being a technical and complex matter, the same can be left for the consideration of experts in the field of accountancy. Similar is the position in the present case where the swap ratio was arrived at by two reputed valuers and as has been stated earlier nothing has been brought before this Court to show as to why the said valuation with regard to the swap ratio should not be accepted. 31. Though several other case laws were cited by learned Counsel for the respective parties, it is not felt necessary to refer to the said decisions in detail. 32. Now coming to the objection raised by the Regional Director regarding the stamp duty payable after merger of the two companies due to increase in the share capital of the transferee company, Mr. Mukherjee drew the attention of the court to a recent judgment of this Court dated July 7, 2006, passed in Copet No. 14 of 2006 {Shivalik Motors Ltd., In re [2008] 143 Comp Cas 462 wherein, dealing with a similar question, this Court relying upon the decisions in the cases of Hotline Hoi Celdings P. Ltd., In re [2005] 127 Comp Cas 165, In Re: Juggilal Kamlapat Holding Ltd., J.K. Investment Ltd. and Kanpur Investments Ltd., decided on August 22, 2005, Vasant Investment Corporation Ltd. Vs. Official Liquidator, Colaba Land and Mill Co. Ltd. In Re: Pmp Auto Industries Ltd., and Maneckchowk and Ahmedabad Manufacturing Co. Official Liquidator, Colaba Land and Mill Co. Ltd. In Re: Pmp Auto Industries Ltd., and Maneckchowk and Ahmedabad Manufacturing Co. Ltd., In re [1970] 40 Comp Cas 819 : [1970] 2 Comp LJ 300 has held that such an objection as made by the Regional Director is not tenable. 33. In view of the ratio decided in the above cases, this Court is of the view that the objection raised by the Regional Director with regard to payment of stamp duty on the amount of increase in the share capital, is unsustainable. 34. In view of the above conclusions, both the petitions are allowed. The scheme of amalgamation is sanctioned which would be binding on all the parties concerned. All the assets and liabilities as per the schedules shall stand transferred to the transferee company with effect from the appointed date given in the scheme. The transferor company shall stand dissolved without any order of winding up to be made by this court. 35. The transferor company shall within thirty days from today, cause a certified copy of this judgment to be delivered to the Registrar of Companies for registration and the transferor company shall stand dissolved as directed above from the date of delivery of the certified copy of this judgment to the Registrar of Companies. The schedules filed by the petitioners shall form a part of this order. 36. Any person interested shall be at liberty to apply this Court in the above matter for any direction that may be necessary. The Registrar (Judicial) of this Court is directed to issue the order in the appropriate form prescribed under the Companies (Court) Rules, 1959, within two weeks hence. Final Result : Allowed