JUDGMENT Hrishikesh Roy, J. 1. Heard Mr. Bhaskar Sen along with Mr. S.R. Kakrania and Mr. K.R. Surana, learned Counsels appearing on behalf of the Petitioner. Also heard Mr. R. Sarma, learned Asstt. Solicitor General of India appearing for the Central Government. 2. This is an application under Sections 391(1), 393 and 394 of the Companies Act, 1956, for sanctioning the Scheme of Amalgamation of the Bhuyankhat Tea Company Private Limited (hereinafter referred to as the "Transferor Company") with Luxmi Tea Company Limited (hereinafter referred to as the "Transferee Company"). 3. In pursuant to the order passed by the Court in Company Application No. 2/2010, a meeting of holders of equity shares of transferor Company was held on 27th March, 2010 for considering the Scheme of Amalgamation. In the meeting so held, presided over by the Court appointed Chairman, the share holders of the transferor Company present in the meeting, unanimously adopted the following resolution: Resolved that the Scheme of Arrangement for Amalgamation of Bhuyankhat Tea Company Private Limited with Luxmi Tea Company Limited being Annexure "A" in Company Application No. 2 of 2010, a copy whereof is placed before this meeting and initiated by the Chairman for the purpose of identification, be and is hereby approved without any modification. 4. The Chairman of the meeting declared that the resolution has been carried unanimously with 4800 votes having been cast in favour of the resolution and none against it. 5. This petition is filed for the Court's sanction to the amalgamation of the transferor Company with the transferee Company. 6. The Regional Director, Eastern Region, Ministry of Corporate Affairs had filed an affidavit on 25th Nov. 2010 conveying the stand of the Central Government on the Scheme of Amalgamation as hereunder: 2(a) It is submitted that the accounting entries/adjustments to be made as a consequence of the Scheme of Amalgamation are stated at Para 11 of Part-II of the scheme. It is further submitted that the accounting entries/adjustments, as a consequence of the scheme of amalgamation, are to be made as per Accounting Standard - 14 notified by the Central Government under Section 211(3A) of the Companies Act, 1956. The Petitioner Company may, therefore, be directed by the Hon'ble Court to make suitable amendments in the Scheme before sanctioning the Scheme. The Petitioner Company may, therefore, be directed by the Hon'ble Court to make suitable amendments in the Scheme before sanctioning the Scheme. (b) That there is no clause in the Memorandum of Association of the Petitioner Company enabling it to amalgamate with any other company. The Hon'ble Court may therefore, be pleased to direct the Petitioner Company to make suitable amendments in its Memorandum of Association, before sanctioning of the Scheme. 7. In so far as the objection (a) of the Central Government is concerned, in the reply affidavit filed by the Petitioner it is conceded that the accounting standard is required to be followed by the Petitioner Company and accordingly it is declared that the Accounting Standard-14, notified by the Central Government under Section 211(3A) of the Companies Act, 1956, will have to be followed by the Petitioner Company notwithstanding anything to the contrary, contained in the Scheme of Amalgamation. 8. For the objection (b) of the Central Government Mr. Bhaskar Sen, learned Counsel for the Petitioner submits that amendment in the Memorandum of Association of the Petitioner Company is not a pre-requisite in case of a statutory process of amalgamation with sanction of the Court. The learned Counsel submits that express power of amalgamation is necessary, only when amalgamation is processed by arrangement amongst the Companies, without invoking the statutory powers. 9. The learned Counsel further submits that powers of the Company Court under Section 391,394 are hot circumscribed by absence of any Clause in the Memorandum of the Company empowering amalgamation. In support of his contention, Mr. Sen has relied upon the following decisions: AIR 1969 Cal 312 : Hari Krishna Lohia v. Hoolungooree Tea Co. Ltd. where the Court recorded as under: 7.-------Counsel for the Respondent on the other hand contended that the provisions contained in Section 391 to 396 and 494 of the Companies Act would indicate that amalgamation would be a statutory right in certain cases and in other cases amalgamation would be resorted to by the company on the strength of specific power in the Memorandum. For the purpose of the present appeal it need be only said that if a company by virtue of its power in the Memorandum desires to amalgamate with another company without coming to a Court of law such amalgamation would be valid and there could be cases where a company desiring to amalgamate would have to come to a Court of law. The power to amalgamate may flow from the Memorandum or it may be acquired by resorting to the statute. Section 17 of the Companies Act indicates that a company which desires to amalgamate with another company will take necessary steps to come before a Court for alteration of its Memorandum in aid of such amalgamation. The statute confers a right on a company to alter its memorandum in aid to amalgamation with another company. The provisions contained in Sections391 to 396 and 494 illustrate some instances of statutory power of amalgamating a company with another company without any specific power in the Memorandum AIR 1997 Cal 208 : E.I.T. India Limited and Ors. where the Calcutta High Court held that- 12-A. In the instant case there cannot be any dispute that all these formalities under the Statute have been complied with and the petition has been properly made under Section 391(2) of the Companies Act. It is well settled that if the statutory formalities have been complied with and the scheme is fair and reasonable and there is no fraud involved then the Court would proceed to give effect to the business of the decision of the shareholders of the company. In other words, unless the Court finds that the scheme is fraudulent or unreasonable the Court would proceed to sanction the scheme. In this connection reference may be made to Palmer's Company Law 24th Edn. Para 79.14. If the Court is satisfied that all the statutory formalities have been complied with and the scheme is fair and reasonable and that there is no fraud involved in propounding the Scheme, the Petitioners are taken to have discharged their onus and the scheme ought to be sanctioned by the Court. The onus lies heavily on those who oppose the sanction of the scheme to show that the scheme is unfair, unreasonable or fraudulent. 14. The onus lies heavily on those who oppose the sanction of the scheme to show that the scheme is unfair, unreasonable or fraudulent. 14. The contention of the Central Government that inasmuch as the Memorandum of Association of some of the Petitioners do not contain express power to amalgamate with another company, the petition is not maintainable and cannot be accepted. In this connection the judgment and decision of the Division Bench of this Court in the case of H.K. Lohia V. Hooluncooree Tea Ltd. reported in AIR 1969 Cal 312 may be taken note of. In the aforesaid decision the Division Bench held that the power to amalgamate is a statutory power and this power may be exercised notwithstanding the fact that the Memorandum of Association of a particular company may not contain express power to amalgamate with another company. The Delhi High Court also in the case reported in (2003) 2 Comp LJ 16: Highland Electro Appliances (P) Ltd. and Ors. recorded the following: ...It is quite clear that the powers of the court under Section391 to 394 are not circumscribed or predicated on the Applicant company possessing powers under its objects clause to amalgamate with any other company. As has been observed by the Division Bench of the Calcutta High Court, if such a power is in fact contained in the memorandum of the respective companies, those companies need not seek the imprimatur and approval of the Company Judge and may initiate and effect the amalgamating de hors the Company Judge. In these circumstances, the objection raised by the Regional Director is overruled. The Bombay High Court too in the decision reported in 1998 Com Cas 103 (AMCO Pesticides Ltd.) took a similar view by holding that: It is further to be seen that in Chapter v. of the Companies Act, power is given to the company to apply for arrangement, compromise of amalgamation and power is vested in the court to sanction amalgamation. The Calcutta High Court by its judgment in the case of Marybong and Kyel Tea Estate Ltd. In re (1977) 47 Comp Cas 802 has observed thus (page 814): The power to amalgamate may flow from the memorandum or it may be acquired by resorting to the statute. The Calcutta High Court by its judgment in the case of Marybong and Kyel Tea Estate Ltd. In re (1977) 47 Comp Cas 802 has observed thus (page 814): The power to amalgamate may flow from the memorandum or it may be acquired by resorting to the statute. Section 17 of the Companies Act indicates that a company which desires to amalgamate with another company will take necessary steps to come before a Court for alteration of its memorandum in aid of amalgamation with another company. The provisions contained in Sections 391 to 396 and 494 illustrate some instances of statutory power of amalgamating a company with another company without any specific power in the memorandum. The said principle seems to me also to be applicable in the present case if the objects clause in the memorandum of association of any of the companies is constructed as not to specifically empower any of the companies to amalgamate with any other company as there is a statutory power of amalgamation under the said section. I may also refer to an unreported judgment of mine in United Bank of India Ltd., (1977) 47 Comp Cas 689 (Cal) which is under appeal, where I have held the same view as I am doing here as to the statutory power to amalgamate without any specific power for amalgamation in the memorandum of association of a company. 10. Mr. R. Sarma, learned Asstt. Solicitor General of India in his reply concedes that since the amalgamation sought by the Petitioner is on the basis of Court's sanction, in view of the law laid down in this regard by the different High Courts of the country the arrangements is permissible without a specific provision for amalgamation in the Memorandum of the Petitioner Company. 11. In this case the Petitioner Company is seeking amalgamation with the transferee Company with sanction of the Court under the statutory provisions of the Companies Act All the requisite formalities under the Act and the Rules, like obtaining the views of the shareholders of the Company through a Court appointed meeting, advertisement of the Company petition and notice to the Central Government were adhered to and none has objected to the proposed arrangement. The views of the Regional Director, Company Law Board have also been taken into account. The views of the Regional Director, Company Law Board have also been taken into account. Moreover the proposed scheme in respect of the transferee Company within the jurisdiction of the Calcutta High Court have already been sanctioned by the said Court. The Petitioners have completed all the statutory formalities and the resolution for amalgamation is unanimously approved by the shareholders of the transferor Company. The process appears to be fair and no fraudulent exercise is noticed in the present case. 12. Considering that statutory power of amalgamation is invoked in the present case under Section 391(1), 393 and 394 of the Companies Act, 1956, and having regard to the decisions) of the Calcutta, Delhi and Bombay High Courts and the steps already taken, I feel that the proposed amalgamation should be sanctioned without requiring the transferor Company to amend its memorandum by resorting to Section 17 of the Companies Act. 13. The Scheme of Amalgamation at Annexure-A is accordingly sanctioned and the prayers (a), (b), (c), (d), (e), (f), (g), (h), (i), (j) and (k) are hereby granted. The transferor Company will however follow the Accounting Standard-14 notified by the Central Government, in formalizing the amalgamation. 14. The Company Petition stands allowed with the above order. Petition allowed