JUDGMENT : Heard Mr. R. Banerjee, learned Senior Counsel assisted by Mr. D. Sarma and Mr. A.K. Sahewalla, learned counsel for the appellant in Co.App./4/2016, who is respondent No.1 in connected Co.App./3/2016. Also heard Mr. D. Mazumdar, learned Senior Counsel assisted by Mr. B. Kaushik, learned counsel for the private respondent in Co.App./4/2016, who is the appellant in Co.App./3/2016 and Mr. MR Adhikari, learned CGC for the Union of India in Co.Appl No.4/2016. 2. These company appeals are filed by the parties, who are aggrieved by the order dated 28.07.2015 passed in Company Petition No.3 of 2013. The facts leading to the present litigation between the parties arose from an application under Sections 391 (2) and 394 of the COMPANIES ACT , 1956, seeking sanction of the Court to the scheme of amalgamation of the Buragohain Tea Company Ltd. (the transferor company) with the B & A Ltd. (the transferee company). 3. The company appeal No.4 of 2016 is filed by the transferor company, namely the Buragohain Tea Company Ltd., whereas the company appeal No.3 of 2015 was filed by shareholder of the transferor company, namely the Buragohain Tea Company Ltd., who had opposed the scheme of amalgamation of the transferor company with the transferee company, as is evident from the pleadings before this Court is that the transferor company was incorporated on 20.05.1927 under the provisions of Indian COMPANIES ACT , 1913 and is existing company under the COMPANIES ACT , 1956. The registered office of the transferor company is situated at Govindapur Tea Estate, Post Office- Latekujan in the District of Golaghat. The issued, subscribed and paid up share capital of the transferor company was Rs.5,30,000.00 divided into 530 equity shares of Rs.1,000.00 each fully paid. The said company is engaged in the business of st cultivation and sale of tea as on 31 of March, 2012. The value of the assets of the transferor company is Rs.19,53,87,760.00, whereas the liabilities of the transferor company stood at Rs.6,26,27,175.00. As such, the value of assets stood over the liabilities as reflected in the books of accounts maintained by the transferor company. 4. The transferee company, on the other hand, was incorporated on 01.06.1915 under the provisions of the Indian COMPANIES ACT , 1913. As such, the value of assets stood over the liabilities as reflected in the books of accounts maintained by the transferor company. 4. The transferee company, on the other hand, was incorporated on 01.06.1915 under the provisions of the Indian COMPANIES ACT , 1913. The transferee company was initially incorporated as Barasali Tea Company Pvt. Ltd. Subsequently, it was known as the B & A Ltd. w.e.f. 06.12.2000 and is an existing company within the meaning of the Act of 1956. The registered office of the transferee company is situated at Indu Bhawan, MG Road, Jorhat. The authorized share capital of the transferee company is Rs. 10,00,00,000.00 divided into 50,00,000 equity shares of Rs.10.00 each and 5,00,000 redeemable cumulative preference shares of Rs.100.00 each. The issued, subscribed and fully paid up of share capital of the transferee company is Rs.3,10,00,000.00 divided into 31,00,000 equity shares of Rs.10.00 each fully subscribed and paid up. The transferee company is engaged in the business of cultivation, manufacturing and sale of tea as per the audited books of accounts maintained by the company as on March 31, 2012. The assets of the transferee company stood at Rs.1,12,48,96,650.00 and the total liabilities stood at Rs.62,68,26,053.00. Therefore, as per the books of accounts, the assets stood over the liabilities at Rs.49,80,70,597.00. 5. The transferee company is also a listed company in the stock exchange. Both the transferor company and the transferee company have their memorandums and articles of association. 6. The litigation history between the objector and the companies are extracted below:- “1) Smt. Sharmila Vijay Shetty, i.e. the appellant in Co. Appeal No. 3/2016, who is the respondent no. 2 in Co. Appeal No. 4/2016, has contested the Company Petition No. 3/2013, by filing her respective affidavit-in-opposition. 2) It may be mentioned that as per the submissions made at the Bar, apart from the proceedings which has given rise to these two appeals, the following cases and proceedings are pending amongst the family members and/or legal heirs/ representatives of Late Hemendra Prasad Barooah, some shareholders of B&A Ltd., some share-holders of Buragohain Tea Co. Ltd. and Smt. Sharmila Vijay Shetty in connection with Buragohain Tea Co. Ltd. and Smt. Sharmila Vijay Shetty in connection with Buragohain Tea Co. Ltd. and B&A Ltd., viz: a. National Company Law Board (erstwhile Company Law Board): I. Proceedings alleging oppression and mismanagement under Section 397 and 398 of the COMPANIES ACT , 1956 was initiated by Smt. Smt. Sharmila Vijay Shetty before the Company Law Board, Kolkata Bench, which was registered and numbered as C.P. No. 186/2013. The said proceeding was transferred to the National Company Law Tribunal, Guwahati Bench [hereinafter referred to as "NCLT-GB" for brevity], where it was re-registered as T.P. No. 13/397/398/GB/2016. II. In connection with T.P. No. 13/397/398/GB/2016 (formerly C.P. No. 186/2013); there appears to be three connected proceedings, being (i) T.A. No. 7/2016 (formerly C.A. No. 126/2016); (ii) T.A. No. 27/2016 (formerly C.A. No. 460/2014); and (iii) T.A. No. 8/2016 (formerly C.A. No. 123/2014). II. The said proceedings was dismissed for default by order dated 13.07.2017, passed by the learned NCLT-GB and the interim order passed therein was vacated. IV. The proceedings of T.P. No. 13/397/398/GB/2016 (formerly C.P. No. 186/2013), was dismissed for default by order dated 13.07.2017, passed by the learned NCLT-GB. Therefore, the appellant in Company Appeal No. 3/2018, namely, Smt. Sharmila Vijay Shetty had filed an application for restoring the said application to file. The said restoration application under Rule 48 of the NCLT Rules, 2016, was registered as Rst. Appl. No. 2/2021. Moreover, as there was delay in filing of the said restoration application, she had also filed a separate application under the provisions of Rule 15 of the NCLT Rules, 2016, praying for condoning the delay of 1332 days beyond the period of limitation in filing the connected application. The said application was registered as Misc. Application No. 5/2021. The learned NCLT-GB, by order dated 08.04.2022, did not find good grounds to condone the delay of 1332 days. Accordingly, prayer made in Misc. Application No.5/2021 was not accepted. Consequently, the said Rst. Appl. No. 2/2021 was also dismissed as infructuous by order dated 05.05.2023. V. Aggrieved by order dated 13.07.2017, passed by the learned NCLT-GB in (i) T.A. No. 7/2016, (ii) T.A. No. 27/2016, and (iii) T.A. No. 8/2016, the said Smt. Sharmila Vijay Shetty, had preferred an appeal before the NCLT-PB, which was registered as Co. Appeal (AT) No. 110/2022. Appl. No. 2/2021 was also dismissed as infructuous by order dated 05.05.2023. V. Aggrieved by order dated 13.07.2017, passed by the learned NCLT-GB in (i) T.A. No. 7/2016, (ii) T.A. No. 27/2016, and (iii) T.A. No. 8/2016, the said Smt. Sharmila Vijay Shetty, had preferred an appeal before the NCLT-PB, which was registered as Co. Appeal (AT) No. 110/2022. As there was a delay in filing the said appeal, a separate application, being I.A. No. 2273/2022 was also filed under Rule 11 and 31 of the NCLAT Rules, 2016, for condoning delay of three days. The said application was allowed by a common order dated 20.09.2022, passed in Co. Appeal No. 110/2022 and I.A. No. 2273/2022. However, by the said order, the learned counsel for the said Smt. Sharmila Vijay Shetty was permitted to withdraw the said Co. Appeal No. 110/2022 and all the interlocutory applications. VI. The said Smt. Sharmila Vijay Shetty filed another company petition under Section 245 of the COMPANIES ACT , 2013, in respect of the affairs of the transferee company before the NCLT-GB, being CP No. 10/245/2020, which was transferred to the NCLT, Principal Bench [hereinafter referred to as "NCLT-PB" for brevity], and is re-registered as TP 36/PB/2021. The present status of the said CP No. 10/245/2020 has not been brought on record. VII. During the lifetime of Late Hemendra Prasad Barooah, he had set-up a trust in the name of Hemen Barooah Benevolent and Family Trust. He had proposed to transfer 8,61,916 equity shares held by him as First Holder to the said trust. Smt. Sharmila Vijay Shetty was the Second Holder of the said shares. Accordingly, he had filed a petition before the Company Law Board, which was registered as C.P. No. 923(KB)/2011. However, the Company Law Board had rejected the said petition on the ground that the said was a dispute between two parties. b. Civil Suit: I. Accordingly, on rejection of C.P. No. 923(KB)/2011, Late Hemendra Prasad Barooah, had filed T.S. No. 41/2012, before the Court of Civil Judge, Jorhat. On his death, one Somnath Chatterjee sought his substitution as plaintiff on the strength of a purported will dated 21.11.2011, left by Late Hemendra Prasad Barooah. It appears that the substitution petition was rejected. Against such rejection order, the said Sri Somnath Chatterjee had preferred CRP No. 97/2013, before this Court, which was also dismissed by order dated 13.11.2014. II. On his death, one Somnath Chatterjee sought his substitution as plaintiff on the strength of a purported will dated 21.11.2011, left by Late Hemendra Prasad Barooah. It appears that the substitution petition was rejected. Against such rejection order, the said Sri Somnath Chatterjee had preferred CRP No. 97/2013, before this Court, which was also dismissed by order dated 13.11.2014. II. In the meantime, an order of status-quo in respect of those 8,61,916 equity shares was passed by the learned Court of Civil Judge in an misc. application filed in connection with T.S. No. 41/2012. III. Late Usha Barooah, the mother of Smt. Sharmila Vijay Shetty had gifted 2,21,230 fully paid-up shares of B&A Ltd. of Rs.10/- each to Smt. Sharmila Vijay Shetty. The said transfer came to be assailed by Late Hemendra Prasad Barooah (then alive) and others by filing T.S. No. 47/2012, before the learned Court of Civil Judge, Jorhat. In connection with the said suit, an application for ad-interim injunction under Order XXXIX, Rules 1 and 2 of the CPC was also filed and the said learned Court restrained Smt. Sharmila Vijay Shetty from selling, dealing with, transferring, alienating, encumbering or exercising right of voting as holder of said 2,21,230 shares of B&A Ltd., and further restraining B&A Ltd. and their bank from making payment of dividend to Smt. Sharmila Vijay Shetty. IV. Aggrieved by the said order of ad interim injunction, the said Smt. Sharmila Vijay Shetty had filed an appeal before this Court, which was registered as F.A.O. No. 19/2012. This Court, by order dated 09.11.2012, directed the plaintiffs in the said suit to release the dividend for financial year 2011-12 to the Smt. Sharmila Vijay Shetty. c. Probate Case: I. In the meanwhile, the said Sri. Somnath Chatterjee had filed a probate suit before the Calcutta High Court in the year 2016. It was submitted at the Bar that the said probate proceeding is still pending for disposal before the said Hon'ble Court. 3) Company: a. B&A Limited is a company that was incorporated under the COMPANIES ACT , 1913. Thus, it is an existing Public Limited Company under the COMPANIES ACT , 1956. It has its registered office at Jorhat, Assam. The said Company is the owner of 7 (seven) Tea Estates in Assam and produced "Black Tea". 3) Company: a. B&A Limited is a company that was incorporated under the COMPANIES ACT , 1913. Thus, it is an existing Public Limited Company under the COMPANIES ACT , 1956. It has its registered office at Jorhat, Assam. The said Company is the owner of 7 (seven) Tea Estates in Assam and produced "Black Tea". In Company Appeal No. 3/2016, this Company is arrayed as respondent No.2 and in Company Appeal No. 4/2016, this Company is arrayed as appellant No.2. In this order, the said B&A Limited is hereinafter referred to as "the transferee company". b. Buragohain Tea Company Limited is a company that was incorporated under the COMPANIES ACT , 1913. Thus, it is an existing Public Limited Company under the COMPANIES ACT , 1956. It has its registered office at Golaghat, Assam. The said Company is also the owner of one Tea Estate. In Company Appeal No. 3/2016, this Company is arrayed as respondent no.1 and in Company Appeal No. 4/2016, this Company is arrayed as the appellant no.1. In this order, the said Buragohain Tea Co. Ltd. is hereinafter referred to as "the transferor company". c. By virtue of respective resolutions adopted by the Board of Directors of both the Companies, the "draft scheme of amalgamation" along with the "share exchange ratio" were approved. Accordingly, as per the requirement of Sections 391 (2) and 394 of the COMPANIES ACT , 1956, the "Scheme of Amalgamation" was filed before this Court for sanction of the said scheme by the Company Judge. The said company application was registered as Company Petition No. 2/2013. d. Smt. Sharmila Vijay Shetty is the appellant in Co. Appeal No. 3/2016 and she is arrayed as respondent no. 2 in Co. Appeal No. 4/2016. She had filed her sole objection to the scheme of amalgamation before the learned Company Judge. e. The appellant in Co. Appeal No. 3/2016, namely, Smt. Sharmila Vijay Shetty, is the daughter of Late Hamendra Prasad Barooah, who had died on 31.07.2013, leaving behind his legal heirs. Smt. Sharmila Vijay Shetty is arrayed as respondent no. 2 in Co. Appeal No. 4/2016. By his purported last will and testament, Late Hemendra Prasad Barooah had not bestowed any part of his estate to his said daughter, namely, Smt. Sharmila Vijay Shetty.” 7. Smt. Sharmila Vijay Shetty is arrayed as respondent no. 2 in Co. Appeal No. 4/2016. By his purported last will and testament, Late Hemendra Prasad Barooah had not bestowed any part of his estate to his said daughter, namely, Smt. Sharmila Vijay Shetty.” 7. As per the scheme of amalgamation which is placed before the Court as a part of the pleadings, the transferor company was proposed to be transferred or amalgamated into the transferee company. The justification for the proposed amalgamation was on the ground that the transferor company had a tea garden namely Govindapur Tea Estate in the District of Golaghat and because of disputes arising with its workers, the Tea Estate was shut down in the year 2005. A company by the name of Rockland Realty Pvt. Ltd. took over the management of the transferor company by acquiring the majority shares in May, 2011. A petition for voluntary liquidation of the transferor company was also filed before the Gauhati High Court which was subsequently permitted to be withdrawn by the Court on the 07.05.2011. The Rockland Realty Pvt. Ltd. although a company having separate juristic identity, is, however, managed and controlled by the management of the transferee company namely the B & A Ltd. After the majority shares were acquired by the Rockland Realty Pvt. Ltd. in the transferor company, the estate operated by the transferor company namely Govindapur Tea Estate was resumed under the new management. The tea estate was able to achieve a turn around by production of 8.5 lakh kgs of tea in green leaf form. After revival of the business of the transferor company, it was found to have good potential and a stable business. However, the transferor company does not have a processing or a manufacturing unit of its own and therefore has to sell the green tea leaf which is produced in the estate. The tea leaf produced by the tea estate under the transferor company is sold to the Mokrung Tea Estate which is situated at a distance of 55 km and which tea estate belongs to the transferee company. The tea purchased from the tea estate of transferor company is processed in the manufacturing unit to produce black tea. The Mokrung Tea Estate processing unit has production capacity of 20 lakh kgs of black tea. The tea purchased from the tea estate of transferor company is processed in the manufacturing unit to produce black tea. The Mokrung Tea Estate processing unit has production capacity of 20 lakh kgs of black tea. Under such circumstances, it was felt that amalgamation of both the companies will benefit the business of both the transferor company and the transferee company and it can be carried out more conveniently and advantageously. On one hand, it was felt that the amalgamation will enable the transferee company to expand its business with an established tea estate and to utilize its surplus tea processing capacity more productively, in larger quantities of black tea from its own captive production. On the other hand, the amalgamation will also benefit the transferor company as it will have direct access to in house tea processing capacity as well as to the expertise and the well established management setup, distribution, marketing network and goodwill of the transferee company which is already an established entity in the business of manufacturing and sale of black tea. The particulars of the benefits vis-à-vis the transferor company and the transferee company have been laid out in the scheme of amalgamation, which is a part of the pleadings before this Court. The scheme of amalgamation was to be given effect to from the appointed date, which was on 01.04.2011, which, however, will be made the effective date only upon the sanction granted by this Court. Once the sanction is granted by this Court, with effect from the appointed date, all assets, property rights, powers, debts, liabilities, duties and obligations of the transferor company will be transferred to the transferee company. All the employees serving under the transferor company will become employees of the transferee company with effect from the appointed date, on such terms and conditions which, however, would not be less favorable to them than those applicable to them under the transferor company as on the said date. All the proceedings pending by or against the transferor company as on the effective date including contracts would stand transferred to the transferee company and would be enforceable by or against the transferee company. All the proceedings pending by or against the transferor company as on the effective date including contracts would stand transferred to the transferee company and would be enforceable by or against the transferee company. The most important or rather controversial clause of the scheme is that on the scheme becoming effective, the transferee company shall issue allot to the shareholders of the transferor company 786 equity shares of Rs.10.00 each in the transferee company for every one equity share of Rs.1,000.00 each in the transferor company. In terms of the scheme, the transferor company and the transferee company had approached this Court by filing company petition No.2/2013, whereupon this Court by order dated 11.02.2013 directed holding of separate meetings of the shareholders of both the transferor company and transferee company on 23.03.2013 for the purposes of consideration of the said scheme of amalgamation. This Court appointed a Chairman of the said meeting also, notices of the said meeting were sent to the equity shareholders of both companies by post and were also published in two local newspapers on 27.02.2013, namely “The Assam Tribune” in English and the “Dainik Janambhumi” in Assamese. The meeting as directed to be held by the Court was duly held on 23.03.2013. The equity shareholders of both the companies held two separate meetings and the scheme of amalgamation was thereafter approved. The proceedings of the said two meetings thereafter were placed before the Court by the appointed Chairman. It is stated by both the transferor company and the transferee company that this scheme of amalgamation would be beneficial to both the companies. The shares of the transferee company for the shares of the transferor company have been fixed on the basis of the valuation report of M/s. Ghosal Barnwal & Co., Chartered Accountants. Further, Microsec Capital Ltd., an independent Merchant Banker Company, has also confirmed that such ratio vis-a-vis the share exchange ratio arrived at between the transferor company and the transferee company is fair. The transferee company being a company listed in the “Bombay Stock Exchange” has also filed this scheme of amalgamation with the Stock Exchange whereafter the “Bombay Stock Exchange” has given its No Objection to the said scheme. 8. Before the learned Single Judge in the proceedings seeking sanction of the scheme of amalgamation, an affidavit was filed on behalf of Smt. Sharmila Vijay Shetty, namely the appellant in Company Appeal No.3/2016. 8. Before the learned Single Judge in the proceedings seeking sanction of the scheme of amalgamation, an affidavit was filed on behalf of Smt. Sharmila Vijay Shetty, namely the appellant in Company Appeal No.3/2016. In the said affidavit, it was mentioned that said Smt. Sharmila Vijay Shetty is holding 3,16,200 shares in her own name and is a joint shareholder of another block of 8,61,918 shares along with her father Lt. Hemendra Prasad Barooah. Smt. Sharmila Vijay Shetty is the daughter of Lt. Hemendra Prasad Barooah who was the Chairman of the Board of Directors of the transferee company. In the said affidavit it is stated that with a view to divest the appellant Smt. Sharmila Vijay Shetty from the same block of shares in the transferee company Title Suit No. 41 of 2012 was filed by Lt. Hemendra Prasad Barooah and it is claimed that although the block of 8,61,918 shares are in the joint name of the plaintiff, namely Lt. Hemendra Prasad Barooah and Smt. Sharmila Vijay Shetty but for all practical purposes the plaintiff, namely Lt. Hemendra Prasad Barooah is the sole beneficial shareholder and the reason for introducing Smt. Sharmila Vijay Shetty as the joint owner was only for operational convenience and to ensure that after the death of the plaintiff the demat account should not be frozen. Accordingly, the plaintiff sought for a declaration that he is the sole and absolute owner of the said block of 8,61,918 shares of the transferee company along with other incidental reliefs. The learned Civil Judge by order dated 13.08.2012 directed the parties to maintain status quo in respect of the block of shares lying in the demat account of the HDFC Bank. Thereafter, another title suit being Title Suit No.47/2012 was filed by Lt. Hemendra Prasad Barooah against Smt. Sharmila Vijay Shetty and four others before the Civil Court at Jorhat questioning the transfer of 2,21,230 shares of Rs.10.00 each of the transferee company by Lt. Usha Barooah, wife of Lt. Hemendra Prasad Barooah to Smt. Sharmila Vijay Shetty. An injunction application was also filed in the said title suit. Hemendra Prasad Barooah against Smt. Sharmila Vijay Shetty and four others before the Civil Court at Jorhat questioning the transfer of 2,21,230 shares of Rs.10.00 each of the transferee company by Lt. Usha Barooah, wife of Lt. Hemendra Prasad Barooah to Smt. Sharmila Vijay Shetty. An injunction application was also filed in the said title suit. The learned Civil Judge, Jorhat by order dated 29.08.2012 restrained the defendant, namely Smt. Sharmila Vijay Shetty from selling, dealing, transferring, alienating, encumbering or exercising the voting right over the said 2,21,230 shares and also restrained the transferee company and the concerned bank, namely the HDFC Bank Ltd. from making payment of any dividend on the said shares to Smt. Sharmila Vijay Shetty. The order dated 29.08.2012 stood subsequently modified by order dated 09.11.2012 passed by the Court of Civil Judge, Jorhat in FAO No.19/2012, whereby the Court directed release of the dividend to Smt. Sharmila Vijay Shetty for the financial year 2011-2012 without prejudice to the rights of the plaintiff to claim temporary injunction for release of dividends in the future. Before the learned Company Judge, it was urged on behalf of Smt. Sharmila Vijay Shetty that although the scheme was stated to have been notified to the “Bombay Stock Exchange” on 25.05.2012, it was actually notified on 26.09.2012. This scheme was not discussed in the meeting of Board of Directors of the transferee company on 25.05.2012 but was inserted subsequently because of certain disputes between the management and the objector namely Smt. Sharmila Vijay Shetty. It was urged that in order to dilute the shareholding of the objector Smt. Sharmila Vijay Shetty in the transferee company and also to cover up the mismanagement and oppression of the transferee company, the entire scheme to merge the transferor company having no intrinsic value with the transferee company was concealed. A petition being Company Petition No.923/2012 was filed by Lt. Hemendra Prasad Barooah before the Company Law Board, New Delhi Bench under Section 111A of the COMPANIES ACT , to have the name of the objector Smt. Sharmila Vijay Shetty be deleted as a shareholder in respect of the joint shareholding of 8,61,918 shares. The said petition was dismissed by the Company Law Board on 31.07.2012 and before the Company Law Board no information with regard to the amalgamation scheme was ever placed. The said petition was dismissed by the Company Law Board on 31.07.2012 and before the Company Law Board no information with regard to the amalgamation scheme was ever placed. It was urged before the Company Law Board that the management fabricated the minutes of the board meeting dated 25.05.2012 and notified the “Bombay Stock Exchange” on 26.09.2012. It was also urged before the learned Company Judge that Rockland Reality Private Ltd. holds 510 out of 580 shares of the transferor company which is 87.93% and therefore, the directors of Rockland Reality Private Ltd. are also the directors and employees of the transferee company, therefore, all the shareholders of Rockland Reality Private Ltd. are directors of the transferee company and the sister-concern and therefore, the deception is apparent. The objector Smt. Sharmila Vijay Shetty also alleged the non receipt of notice of the meeting of the transferee company which was held on 23.03.2013. It is alleged that the notice was sent to the address not currently occupied by the objector and was received after the meeting. Finally, it was also contended that the amalgamation scheme is devoid of any justification and the exchange ratio of the shares is wholly prejudicial to the interest of the transferee company in which the public is interested. The scheme has not been placed before the Court in terms of the Circular of the “Security Exchange Board of India” (SEBI) dated 14.02.2013 which lays down certain steps to be taken prior to submission of the scheme before the High Court. Therefore, in view of the non compliance of the SEBI circular sanctions sought for from the learned Company Judge should not be granted. On the other hand, on behalf of the transferee company in respect of the objections raised by the objector Smt. Sharmila Vijay Shetty, it was urged that the personal and private disputes raised by the objector with regard to her late father namely Lt. Hemendra Prasad Barooah cannot be a ground to reject the sanction sought for towards the amalgamation of the companies. It was urged that the objector Smt. Sharmila Vijay Shetty was appointed as a whole time Director of the transferee company w.e.f. 01.06.2010. However, she did not devote any time and attention to the affairs of the company and did not even attend a single meeting of the Board of Directors. It was urged that the objector Smt. Sharmila Vijay Shetty was appointed as a whole time Director of the transferee company w.e.f. 01.06.2010. However, she did not devote any time and attention to the affairs of the company and did not even attend a single meeting of the Board of Directors. Taking the view that her continuance as a whole time Director was not in the interest of the company, the Board of Directors adopted the resolution dated 19.09.2011 by terminating her appointment as Director of transferee company. It was stated before the learned Company Judge that due notice of the meeting proposed to be held was dispatched to the address of the objector Smt. Sharmila Vijay Shetty which is available in the register of shareholders. The objector however, never attended any of the annual general meetings of the transferee company in the past. 9. An affidavit was also filed by the Regional Director, Eastern Region, Ministry of Corporate Affairs, Government of India, Kolkata. In the said affidavit, it was stated that as per the balance sheet of both companies, they appear to be secured creditors. However, no meeting of the creditors has been held and/or consent obtained. Further, the scheme of amalgamation does not confirm to the requirement of Accounting Standard 14 read with Section 211 (3A) of the Act. The Regional Director further objected that the provision to pay 786 equity shares of Rs.10.00 each of the transferee company against one equity share of Rs.1,000.00 of the transferor company is not at all justified. Further, that the provision to pay 786 equity shares of Rs.10.00 each of the transferee company against one equity share of the transferor company is not at all justified considering the status of the two companies. It was stated that the balance sheet of the transferor company does not portray the correct picture of the said company having a direct impact on the share exchange ratio of 1:786. It was therefore stated by the Regional Director in the affidavit that the scheme appears to be against the interest of the minority shareholders and is meant to give exclusive benefits to the promoter group. It was therefore stated by the Regional Director in the affidavit that the scheme appears to be against the interest of the minority shareholders and is meant to give exclusive benefits to the promoter group. These objections of the Regional Director have also been questioned by the transferee company stating that the ratio of shares is fixed on the basis of earning capacity of the transferor company and not on the basis of its net asset value or net worth as appearing in the balance sheet as alleged by the Regional Director. The exchange ratio has been fixed on the basis of profitability and earnings of the transferor company and not on the basis of the net worth of the two companies. 10. The objector Smt. Sharmila Vijay Shetty, by way of a supplementary affidavit filed before the learned Company Judge submitted that upon expiry of her father Lt. Hemendra Prasad Barooah, by operation of law the block of 8,61,918 equity shares has devolved upon her and therefore she represents 27.8% of the issued and paid up capital of the transferee company and along with the total amount of shares that she holds in the transferee company it comes to 38% of the shares of the transferee company. 11. The scheme for which the sanction has been sought to be obtained from this Court is nothing but a device to deplete the shareholding ratio of the objector Smt. Sharmila Vijay Shetty from the share held in the transferee company. It is a ploy to deprive the objector of the legitimate control that she has over the transferee company by virtue of holding 38% of the shares in the transferee company. The scheme therefore seeks to materially alter the shareholding pattern and structure of the transferee company which would be an act prejudicial to and detrimental to the interest of the objector being the single largest shareholder of the transferee company. 12. Considering the objections raised before the learned Company Judge and on the basis of the pleadings and materials placed before the Court and after referring to the judgments cited before the Court, ultimately came to the conclusion that the exchange ratio proposed in the scheme appears to be heavily loaded in favor of the shareholders of the transferor company and is therefore unrealistic and illogical, if not downright absurd. The learned Company Judge held that the shares of the Company which was under lockout for a long period with accumulated losses cannot be valued in the manner projected in the scheme that is for every 1,000 value of shares in the transferor company, a shareholder in the transferor company would get Rs.7860.00 value of shares in the transferee company. The learned Company Judge did not accept the explanation. It was held by the learned Company Judge that nothing has been placed before the Court and no material has been disclosed either in the petition or in the affidavits as to how the particular exchange ratio has been worked out. The learned Company Judge was of the view that while from the standpoint of commercial strength of the two companies the exchange ratio does not appear to be sound, the same can also be examined in the light of the recent litigation history of the transferee company vis-a-vis the objector. The learned Company Judge concluded that although the Court had in principle agreed to sanction the scheme, but the exchange ratio was found to be unfair and unjust and not based on the market realities. Accordingly, it appeared to the learned Company Judge that it would be just and proper if the Registrar of Companies is directed to examine the matter through experts and determine a fair and just exchange ratio. The learned Company Judge directed and concluded that the exchange ratio of 786 fully paid up equity shares of Rs.10.00 each of the transferee company to be issued and allotted for every 1 equity share of Rs.1,000 in the transferor company does not appear to be faire and justified and accordingly the Court directed the Registrar of the Companies, Shillong to work out the exchange ratio in a fair manner through independent experts keeping in view the discussions made above and submit the same to the Court in two months time and thereafter the Court may sanction the scheme with modifications and the matter was directed to be listed on 16.11.2015. It is against this order both the company appeals have been filed questioning the direction of the learned Company Judge. It is against this order both the company appeals have been filed questioning the direction of the learned Company Judge. While the appeal preferred on behalf of the transferee company has questioned the correctness of the conclusions of the learned Company Judge in issuing the directions overlooking the commercial wisdom of the shareholders of both the companies who have accepted and sanctioned the scheme in the shareholders meetings held and that to pursuant to the directions issued by this Court and which resolutions have been placed before the Court in respect of the meetings presided over by the Chairman appointed by the Court itself. The appellants questioned the direction of the learned Company Judge to the Registrar of Companies to revisit the share valuation arrived at by the shareholders in respect of the transferor company vis-a-vis the transferee company. The basic grievance of the transferee company is that the powers of the Company Court to sanction an amalgamation scheme is limited to examine the nature of the scheme and the procedures followed or required to be followed. The learned Company Judge is not an appellate authority to re-decide the scheme or the benefits thereof, over and above the resolutions adopted by the shareholders of the companies and overlooking the commercial wisdom of the shareholders of these companies who are better equipped to decide in the best interests of the company. There was no dispute between the shareholders of the transferor company and the transferee company in respect of adopting resolution to pass the scheme of amalgamation. Under such circumstances, it was not open to the learned Company Judge to decide on the question of share equation equivalent and to redirect the Registrar of Companies to re-examine the matter by using independent authorities and to place the same before the Court. 13. On the other hand, the Objector, Smt. Sharmila Vijay Shetty has assailed the order of the learned Company Judge on the ground that once the Court found that the share exchange ratio was not just and proper, the scheme should have been rejected there, instead of referring the matter back to the Regional Director, Ministry of Corporate Affairs to revisit the share exchange ratio by using any independent methods. The Court also did not take into consideration the fact that the objector was never served with a proper notice to attend the meeting of shareholders, wherein she could have raised these objections. Under such circumstances, the company petition seeking sanction of the scheme of amalgamation ought to have been rejected by the learned Company Judge. 14. Mr. R. Banerjee, learned Senior Counsel, appearing for the appellant in Company Appeal No.4 of 2016 and for the transferee company namely B&A Limited submits that the claim of the objector Smt. Sharmila Vijay Shetty as regards the share exchange ratio would be restricted only to the extent of her original shareholding ratio. It is submitted that the Company Court did not have sufficient grounds or mechanism to find fault with the share exchange ratio. While the Company Court accepted the amalgamation as based on commercial considerations, the ultimate direction for re-evaluation of the share exchange ratio by the Regional Director, Ministry of Corporate Affairs was totally uncalled for and therefore, the same is bad in law. Learned Senior Counsel for the appellant further submits that the respondents failed to show as to how the share exchange ratio was violated or bad, or how the share holding was affected and in the absence of such specific averments made before the learned Company Judge, direction should not be issued for re-evaluation of the share exchange ratio. It is submitted that if the amalgamation in its present form is allowed, the objector will stand to gain a larger share holding ratio. The learned Senior Counsel therefore submits that the Regional Director has no locus standi to object. The shares will ultimately remain in the transferee group of companies. The minority shareholder, namely the objector, also has no locus standi to question the share exchange ratio as the company petitions which were filed earlier by her stood dismissed. There was no material before the Court furnished by the objector to show that the scheme in its present form is opposed to the minority shareholders and which requires re-evaluation or reconsideration of the share exchange ratio. There was no material before the Court furnished by the objector to show that the scheme in its present form is opposed to the minority shareholders and which requires re-evaluation or reconsideration of the share exchange ratio. The learned Senior Counsel extraneously submits that any dispute with regard to the share exchange ratio can always be resolved by the shareholders upon such objection being raised before the Court, the Company Court is required to see whether the scheme has the approval of the shareholders and that appropriate resolutions have been adopted by the shareholders of both the transferor and the transferee of the company in terms of the amalgamation scheme. 15. Unless the Court finds that the scheme is itself opposed to public policy, there was no occasion for the learned Company Judge not to grant sanctioned to the resolutions adopted by the shareholders of both the companies to implement the scheme of amalgamation. The learned Senior Counsel submits that the conclusions arrived at by the learned Company Judge is itself contrary inasmuch as while it concludes that it is up to the commercial wisdom of the shareholders to agree or disagree to the amalgamation scheme, yet the learned Company Judge proceeded to direct re-evaluation of the shareholding equation solely relying on the affidavit filed by the Regional Director of Corporate Affairs, Government of India. It is reiterated that without any specific materials before the Regional Director of Corporate Affairs, it has no locus standi to question or raise objections to the shareholding ratio adopted by the shareholders of both the Companies in their meetings. 16. The Learned Senior Counsel has pressed into service the judgment of the Apex Court in Miheer H. Mafatlal vs. Mafatlal Industries Ltd. reported in (1997) 1 SCC 579 to submit that family disputes, litigation between the parties, financial conditions of the transferor company vis-à-vis the transferee company are not grounds on which the Company Court can decline to grant sanction to a scheme of amalgamation which has been passed by proper resolution adopted by the shareholders of the transferor and the transferee company. Such resolutions adopted by the shareholders are on the basis of their commercial wisdom which ordinarily ought not to be questioned by the Company Court unless there are specific materials to show that the adopted resolutions were not bona fide in nature or contrary to the procedure and the law prescribed. Such resolutions adopted by the shareholders are on the basis of their commercial wisdom which ordinarily ought not to be questioned by the Company Court unless there are specific materials to show that the adopted resolutions were not bona fide in nature or contrary to the procedure and the law prescribed. The learned Senior Counsel submits that the Objectors Smt. Sharmila Vijay Shetty, never attended any annual general meetings and also abstain from being present in the meetings scheduled for the shareholders of the transferor company, namely, Buragohain Tea Co. Ltd and which meetings were directed to be conducted in terms of the orders passed by this Court and under the chairmanship of court-appointed chairpersons. The only ground now urged before the Court by the objector is that she was never informed of the meeting. In terms of the directions of the Company Court, the notice of the meetings were widely circulated in both English and vernacular newspapers and individual copies of the notices were sent to the shareholders including to the objectors at the addresses which are recorded in the register maintained by the company. Therefore, the objection from the objector that the notices were sent to the address in which the appellant earlier resided cannot be accepted, as there is no material before the Company Court brought by the objector to show that the change of address was duly notified to the company as per the procedure prescribed. Therefore, the claim of the objector that resolution adopted in the meeting was without proper notice to the objector cannot be and ought not to have been accepted as a ground by the Company Court to return a finding for re-evaluation of the shareholding ratio by the Regional Director of Corporate Affairs, Government of India. 17. In addition to the judgment of the Apex court rendered in Miheer H. Mafatlal (supra), the learned Senior Counsel refers to the judgment of Maharashtra Apex Corporation Ltd. , reported in (2005) 124 Comp 637 Para 48 to submit that absence of a shareholder in spite of the notice in a meeting will amount to implied consent of the shareholder. Learned Senior counsel submits that this judgment in Maharashtra Apex Corporation Ltd. (supra) was subsequently followed in CRB Capital Markets Limited vs. Reserve Bank of India reported in (2006) 127 DLT 576 . Learned Senior counsel submits that this judgment in Maharashtra Apex Corporation Ltd. (supra) was subsequently followed in CRB Capital Markets Limited vs. Reserve Bank of India reported in (2006) 127 DLT 576 . It is further submitted that the law laid down by the Apex Court in Miheer H. Mafatlal (supra) has been consistently followed in subsequent judgments more particularly in Hindustan Lever Employees’ Union vs. Hindustan Lever Ltd. and Others reported in AR 1995 SC 470 paragraph 3,5, 6, 31 and 58. In Dinesh Vrajlal Lakhani vs. Parke Davis (India) Limited reported in (2005) 124 Comp Cas 728 paragraph 5, 12 (i), 18, 19 and 40. 18. Learned Senior Counsel also presses into service the judgment of the Apex Court reported in GL Sultani and Another vs. Securities & Exchange Board of India and Others reported in (2007) 5 SCC 133 to submit that the learned Single Judge was swayed by litigation history and the face value of the shares which was totally uncalled for and unwarranted in the facts of the case. He therefore submits that the directions of the learned Company Judge remitting the matter back to the Director of Corporate Affairs, Government of India for pre-evaluation of the share exchange ratio should be interfered with and set-aside and the scheme of amalgamation placed before the Court be approved. 19. Mr. D. Mazumdar, learned Senior Counsel assisted by Mr. B. Kaushik, learned counsel for the respondent no.2 in Co. Appeal No.4 of 2016 and for the appellants in Co.Appeal No.3 of 2016 and appearing for the objectors Smt. Sharmila Vijay Shetty strongly disputes the submission placed by the senior counsel for the companies in favour of the scheme of amalgamation. He submits that the scheme of amalgamation is nothing but a ploy to dilute the shareholding of the objectors and therefore, the same amounts to occasional mismanagement of the company. It is submitted that the shareholding ratio being an imperial part of the scheme, the learned Company Judge ought to have refused the sanction as it was found the share exchange ratio is unfair. The objector, being aggrieved by this specific direction of the learned Company Judge, the matter was remanded back to the Regional Director of Corporate Affairs for re-evaluation of the share exchange ratio. The objector, being aggrieved by this specific direction of the learned Company Judge, the matter was remanded back to the Regional Director of Corporate Affairs for re-evaluation of the share exchange ratio. It has been submitted that there was gross unfairness and illegality in the determination of share exchange ratio, which is only intended to benefit the promoters of Rockland Pvt. Ltd., who are the promoters of the transferee company. It was submitted that Rockland Pvt. Ltd. owns 510 equity shares out of 580 shares in Buragohain Tea Co. Ltd. and therefore, was a majority. 20. The learned Senior Counsel submits that once the learned Company Judge finds that the share exchange ratio adopted in the scheme was unfair, the sanction ought to have been refused and the matter should have been closed then and there. The further directions to re-evaluate the share exchange ratio by the Registrar of Companies, Corporate Affairs was totally uncalled for since it had already appeared to the learned Company Judge that the share exchange ratio was unfair in so far as the stake of the objector is concerned. The learned Senior Counsel submits that under Section 392 of the COMPANIES ACT , the Company Court has the power to modify the scheme only to see that the scheme has properly worked. No such directions were issued for modifying the scheme. Therefore, it is submitted that the proper course of action ought to have been resorted to by the Company Court was to reject the sanction of the scheme of amalgamation. It is submitted that the direction given by the learned Company Judge goes beyond the powers specified under the statute itself. It is submitted that the effect of the learned Company Judge's order is to give powers to the Regional Director of the ROC for re-evaluation of the share exchange ratio, which power is not even bestowed on such an authority under the COMPANIES ACT , 1956. Therefore, such directions issued by the learned Company Judge being beyond the powers bestowed under the statute was totally uncalled for and the same should therefore be set aside and interfered with and the sanction for scheme of amalgamation ought not to be granted and the appeals filed by the Companies should be dismissed. Therefore, such directions issued by the learned Company Judge being beyond the powers bestowed under the statute was totally uncalled for and the same should therefore be set aside and interfered with and the sanction for scheme of amalgamation ought not to be granted and the appeals filed by the Companies should be dismissed. Referring to the judgment of the Company Court, it is submitted that there are specific findings on fact that no materials have been placed by the transferee company to show as to how the share exchange ratio is arrived at although it was the responsibility of the transferee company to place these materials. Therefore, in view of such findings, the learned Company Judge ought to have declined to grant sanctions to the scheme of amalgamation. Instead the direction was given to the Regional Director of Corporate Affairs, ROC to re- evaluate the share exchange ratio. The further contention of the Senior counsel is that the Buragohain Tea Company Ltd. and its tea estate remained closed for about 6 (six) years due to lock look out. The Rockland Realty Private Limited Company holds 96% of the shares of the transferor company and the management of the said Rockland Realty is the same as that of the transferee company namely B&A Limited. Therefore, the Rockland Realty Private Limited Company had controlled the affairs of the transferor company, namely, Buragohain Tea Company Ltd. The entire exercise by the transferee company in working out the share exchange ratio was with the sole purpose of restraining the objector from rightfully acquiring her shares to which she is entitled and she was unceremoniously removed from the Board of Directors of the Buragohain Tea Company Ltd. It is further submitted that the objector is a joint holder of a block of 861918 shares along with her late father Hemendra Prasad Barooah. The learned Senior Counsel submits that these shares jointly held by the objectors Smt. Sharmila Vijay Shetty have not yet been transferred to her name after the expiry of the co-joint holder, namely, late Hemendra Prasad Barooah, her father. This is contrary to Rule 12.6.1 of the NSDL Rules. In terms of the said rules on the death of a joint holder, the shares held by depository are to be transferred to the joint holder. This is contrary to Rule 12.6.1 of the NSDL Rules. In terms of the said rules on the death of a joint holder, the shares held by depository are to be transferred to the joint holder. There is no explanation by any of the parties before this Court as to why these shares have not been transferred in the name of the objector Smt. Sharmila Vijay Shetty and why the Board of Directors of both the companies declined to pass appropriate resolutions by transferring these shares in the name of the surviving holder namely Smt. Sharmila Vijay Shetty. The learned Senior Counsel submits that shareholding ratio is based on purported evaluations made by so called experts. However, there is no material placed before the Company Court as to how the evaluation was worked out in arriving at the share exchange ratio. Even in the report of the Chartered accountant enclosed in the pleadings the method of arriving at the share exchange ratio has not been disclosed. 21. Going by the share exchange ratio arrived at and from the annual accounts of the company it is clear that there is an abnormal projection of rise and the value of land. The land value has been shown to increase by 200% in one year, a projection which is admittedly without any material. The learned Senior Counsel also refers to the judgment of Miheer H. Mafatlal (supra) to submit that the parameters of grant of sanction to a scheme of amalgamation by Company Court is laid down by the Apex Court in the said judgment. Therefore, it is clear that the penultimate direction of the Company Board of revaluation of the share exchange ratio is contrary not only to the statutes but also to the law laid down by the Apex Court in Miheer H. Mafatlal (supra). He submits that the law laid down in Miheer H. Mafatlal (supra) is subsequently followed in several other judgments, namely, Hindustan Lever Employees’ Union vs. Hindustan Lever Limited reported in 1995 Supp (1) SCC 499, Meghal Homes Private Limited vs. Shree Niwas Girni K.K. Samiti reported in (2007) 7 SCC 753 paragraph 45 and 46 and Chembra Orchard Produce Ltd. v. Regional Director of Company Affairs reported in (2009) 2 SCC 547 para 13. 22. Mr. 22. Mr. D. Mazumder, learned Senior Counsel for Smt. Sharmila Vijay Shetty therefore submits that no notice of the meeting of the shareholders was served on the objector namely Srimati Vijay Shetty approving the scheme. The very scheme of amalgamation is a ploy to dilute the shareholding of the objector namely Srimati Vijay Shetty who holds about 38% of the shares. The scheme of amalgamation is contrary to the semi notification regarding the amalgamation sought to be adopted by the transferor and transferee companies. He submits that the learned Company Judge returns a finding of mismanagement and destruction or loss of audited records and therefore, under such circumstances, there is no basis for coming to the conclusions by the learned Company Judge that the scheme was in the business interests of both parties. The scheme and the share exchange ratio was sought to be prepared by experts, however, the methodology adopted and the materials on which the scheme was prepared and placed for approval of the shareholders and the opinion given by the Chartered accountant as well as by the independent auditors that the scheme of amalgamation is based in the business interest of both the companies, cannot be accepted in the absence of any specific materials being placed before this Court as the same is not even enclosed to the scheme of amalgamation which is a part of the pleadings in the present proceedings. The net result of the scheme of amalgamation, if accord a sanction by the Company Board, will amount to bringing the shareholding ratio of the objector, namely, Smt. Sharmila Vijay Shetty, to below 5% from the current 38%. Therefore, he submits that the directions of the Company Court to the Registrar of companies for arriving at a reevaluation of the shareholding ratio be interfered with and the scheme of amalgamation ought not to be sanctioned and the petition filed by the companies seeking sanction for amalgamation should be dismissed and a further direction be issued to the respective companies to transfer the shares jointly held by the objector along with her late father to her name in view of the expiry of the co-joint holder namely, late Hemendra Prasad Barooah. 23. The learned counsel for the parties have been heard. Pleadings available on records have been carefully perused. 24. 23. The learned counsel for the parties have been heard. Pleadings available on records have been carefully perused. 24. From the facts urged before the Court it appears that there are numerous litigations between the company and the Objector, namely, Smt. Sharmila Vijay Shetty as well as between one of the directors B&A Limited. From the pleadings it appears that there is a family dispute regarding the control of the companies between late Hemendra Prasad Barooah and his daughter/objector and other shareholders and management of the company. 25. The question before this Court is whether the company court, while considering a proceeding for accord a sanction to a scheme of amalgamation under the COMPANIES ACT , can issue the directions as have been done in the present proceedings which are under appeal. In order to examine this question, it will be necessary to refer to the relevant sections of the COMPANIES ACT , 1956. The provisions for facilitating reconstruction and amalgamation of companies are prescribed under Section 394 of the COMPANIES ACT 1956. Under Section 394 of the COMPANIES ACT , 1956, a notice is to be given to Central Government for applications under Section 391 and 394 of the Act, 1956. Section 395 prescribes the power and duty to acquire the shares of shareholders dissenting from the scheme or the contract approved by majority. The relevant Provisions of these Sections are extracted below: “394. PROVISIONS FOR FACILITATING RECONSTRUCTION AND AMALGAMATION OF COMPANIES. Section 395 prescribes the power and duty to acquire the shares of shareholders dissenting from the scheme or the contract approved by majority. The relevant Provisions of these Sections are extracted below: “394. PROVISIONS FOR FACILITATING RECONSTRUCTION AND AMALGAMATION OF COMPANIES. –(1) Where an application is made to the [Tribunal] under section 391 for the sanctioning of a compromise or arrangement proposed between a company and any such persons as are mentioned in that section, and it is shown to the [Tribunal] – (a) that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of any company or companies, or the amalgamation of any two or more companies ; and (b) that under the scheme the whole or any part of the undertaking, property or liabilities of any company concerned in the scheme (in this section referred to as a "transferor-company") is to be transferred to another company (in this section referred to as "the transferee-company"); the [Tribunal] may, either by the order sanctioning the compromise or arrangement or by a subsequent order, make provision for all or any of the following matters : (i) the transfer to the transferee-company of the whole or any part of the undertaking, property or liabilities of any transferor-company ; (ii) the allotment or appropriation by the transferee-company of any shares, debentures, policies, or other like interests in that company which, under the compromise or arrangement, are to be allotted or appropriated by that company to or for any person ; (iii) the continuation by or against the transferee-company of any legal proceedings pending by or against any transferor-company ; (iv) the dissolution, without winding up, of any transferor-company ; (v) the provision to be made for any persons who, within such time and in such manner as the [Tribunal] directs, dissent from the compromise or arrangement ; and (vi) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation shall be fully and effectively carried out : [Provided that no compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the amalgamation of a company, which is being wound up, with any other company or companies, shall be sanctioned by the 1 [Tribunal] unless the [Tribunal] has received a report from [***] the Registrar that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest : Provided further that no order for the dissolution of any transferor-company under clause (iv) shall be made by the [Tribunal] unless the Official Liquidator has, on scrutiny of the books and papers of the company, made a report to the [Tribunal] that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest. (2) Where an order under this section provides for the transfer of any property or liabilities, then, by virtue of the order, that property shall be transferred to and vest in, and those liabilities shall be transferred to and become the liabilities of, the transferee-company ; and in the case of any property, if the order so directs, freed from any charge which is, by virtue of the compromise or arrangement, to cease to have effect. (3) Within thirty days after the making of an order under this section, every company in relation to which the order is made shall cause a certified copy thereof to be filed with the Registrar for registration. If default is made in complying with this sub-section, the company, and every officer of the company who is in default, shall be punishable with fine which may extend to 3 [five hundred] rupees. (4) In this section – (a) "property" includes property rights and powers of every description ; and "liabilities" includes duties of every description ; and (b) "transferee-company" does not include any company other than a company within the meaning of this Act ; but "transferor-company" includes any body corporate, whether a company within the meaning of this Act or not. 395. 395. POWER AND DUTY TO ACQUIRE SHARES OF SHAREHOLDERS DISSENTING FROM SCHEME OR CONTRACT APPROVED BY MAJORITY –(1) Where a scheme or contract involving the transfer of shares or any class of shares in a company (in this section referred to as "the transferor- company") to another company (in this section referred to as "the transferee-company"), has, within four months after the making of the offer in that behalf by the transferee-company, been approved by the holders of not less than nine-tenths in value of the shares whose transfer is involved (other than shares already held at the date of the offer by, or by a nominee for, the transferee-company or its subsidiary), the transferee-company may, at any time within two months after the expiry of the said four months, give notice in the prescribed manner to any dissenting shareholder, that it desires to acquire his shares ; and when such a notice is given, the transferee company, shall, unless, on an application made by the dissenting shareholder within one month from the date on which the notice was given, the 1 [Tribunal] thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which, under the scheme or contract, the shares of the approving shareholders are to be transferred to the transferee-company : Provided that where shares in the transferor-company of the same class as the shares whose transfer is involved are already held as aforesaid to a value greater than one-tenth of the aggregate of the values of all the shares in the company of such class, the foregoing provisions of this sub-section shall not apply, unless – (a) the transferee-company offers the same terms to all holders of the shares of that class (other than those already held as aforesaid) whose transfer is involved ; and (b) the holders who approve the scheme or contract, besides holding not less than nine-tenths in value of the shares (other than those already held as aforesaid) whose transfer is involved, are not less than three-fourths in number of the holders of those shares. (2) Where, in pursuance of any such scheme or contract as aforesaid, shares, or shares of any class, in a company are transferred to another company or its nominee, and those shares together with any other shares or any other shares of the same class, as the case may be, in the first-mentioned company held at the date of the transfer by, or by a nominee for, the transferee-company or its subsidiary comprise nine-tenths in value of the shares, or the shares of that class, as the case may be, in the first-mentioned company, then, - (a) the transferee-company shall, within one month from the date of the transfer (unless on a previous transfer in pursuance of the scheme or contract it has already complied with this requirement), give notice of that fact in the prescribed manner to the holders of the remaining shares or of the remaining shares of that class, as the case may be, who have not assented to the scheme or contract; and (b) any such holder may, within three months from the giving of the notice to him, require the transferee-company to acquire the shares in question ; and where a shareholder gives notice under clause (b) with respect to any shares, the transferee- company shall be entitled and bound to acquire those shares on the terms on which, under the scheme or contract, the shares of the approving shareholders were transferred to it, or on such other terms as may be agreed, or as the [Tribunal] on the application of either the transferee-company or the shareholder thinks fit to order. (3) Where a notice has been given by the transferee-company under sub-section (1) and the [Tribunal] has not, on an application made by the dissenting shareholder, made an order to the contrary, the transferee-company shall, on the expiry of one month from the date on which the notice has been given, or, if an application to the [Tribunal] by the dissenting shareholder is then pending, after that application has been disposed of, transmit a copy of the notice to the transferor-company together with an instrument of transfer executed on behalf of the shareholder by any person appointed by the transferee-company and on its own behalf by the transferee-company, and pay or transfer to the transferor-company the amount or other consideration representing the price payable by the transferee-company for the shares which, by virtue of this section, that company is entitled to acquire ; and the transferor-company shall – (a) thereupon register the transferee-company as the holder of those shares, and (b) within one month of the date of such registration, inform the dissenting shareholders of the fact of such registration and of the receipt of the amount or other consideration representing the price payable to them by the transferee company : Provided that an instrument of transfer shall not be required for any share for which a share warrant is for the time being outstanding. (4) Any sums received by the transferor-company under this section shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company in trust for the several persons entitled to the shares in respect of which the said sums or other consideration were respectively received. (4) Any sums received by the transferor-company under this section shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company in trust for the several persons entitled to the shares in respect of which the said sums or other consideration were respectively received. (4A) (a) The following provisions shall apply in relation to every offer of a scheme or contract involving the transfer of shares or any class of shares in the transferor-company to the transferee-company, namely : (i) every such offer or every circular containing such offer or every recommendation to the members of the transferor company by its directors to accept such offer shall be accompanied by such information as may be prescribed ; (ii) every such offer shall contain a statement by or on behalf of the transferee- company, disclosing the steps it has taken to ensure that necessary cash will be available ; (iii) every circular containing, or recommending acceptance of, such offer shall be presented to the Registrar for registration and no such circular shall be issued until it is so registered ; (iv) the Registrar may refuse to register any such circular which does not contain the information required to be given under sub- clause (i) or which sets out such information in a manner likely to give a false impression ; and (v) an appeal shall lie to the [Tribunal] against an order of the Registrar refusing to register any such circular. (b) Whoever issues a circular referred to in sub-clause (iii) of clause (a), which has not been registered, shall be punishable with fine which may extend to [five thousand] rupees. (5) In this section – (a) "dissenting shareholder" includes a shareholder who has not assented to the scheme or contract and any shareholder who has failed or refused to transfer his shares to the transferee-company in accordance with the scheme or contract ; (b) "transferor-company" and "transferee-company" shall have the same meaning as in section 394. (5) In this section – (a) "dissenting shareholder" includes a shareholder who has not assented to the scheme or contract and any shareholder who has failed or refused to transfer his shares to the transferee-company in accordance with the scheme or contract ; (b) "transferor-company" and "transferee-company" shall have the same meaning as in section 394. (6) In relation to an offer made by the transferee-company to share- holders of the transferor-company before the commencement of this Act, this section shall have effect – (a) with the substitution, in sub-section (1), for the words "the shares whose transfer is involved (other than shares already held at the date of the offer by, or by a nominee for, the transferee-company or its subsidiary)," of the words "the shares affected" and with the omission of the proviso to that sub-section ; (b) with the omission of sub-section (2) ; (c) with the omission in sub-section (3) of the words "together with an instrument of transfer executed on behalf of the shareholder by any person appointed by the transferee-company and on its own behalf by the transferee-company" and of the proviso to that sub-section ; and (d) with the omission of clause (b) of sub-section (5).” 26. There is no dispute that an application made before this Court for proceeding with the scheme of amalgamation, the Court directed the transferor and the transferee company to hold its meeting with the shareholders under the chairmanship of four appointed chairpersons. Both the companies accordingly held its meetings and had approved the scheme of amalgamation and the same by way of proper application is placed before the Court for seeking approval/ sanction to the scheme already approved by the shareholders of the respective companies. The dispute raised to the scheme of amalgamation is on account of non receipt of notice by the Objector, namely, Smt. Sharmila Vijay Shetty who claims to be a share holder of Buragohain Tea Estate which is the transferor company. According to the objector, the notice was required to be served on the objector was never served and consequently, she was unaware of the meeting of shareholders held between the parties and therefore she was deprived of her opportunity to raise objections in the meeting that was concluded purportedly without issuance of notice to the objector. According to the objector, the notice was required to be served on the objector was never served and consequently, she was unaware of the meeting of shareholders held between the parties and therefore she was deprived of her opportunity to raise objections in the meeting that was concluded purportedly without issuance of notice to the objector. As have been discussed, the basic nuance of the objector is that she was deprived of the right of hearing with the shareholders meeting as she holds a sizeable percentage of shares. This contention of the objector is disputed by the learned Senior Counsel representing the Companies that the objector never attended any Annual General Meeting and the notice was served on the address which was available in the register maintained by the Companies of the members/ shareholders. The claim of the objector is that the address to which the notice was sent was her earlier address and the notice ought to have been sent to her present address is also disputed on the ground that the objector being a shareholder is aware of the procedure required to be maintained and any change in the notice ought to have been brought to the notice of the companies so that the necessary changes would have been effected to the address maintained in the registers by the Company. Therefore, such recourse which ought to have been taken by the objector not having been resorted to, there is no fault on the part of the company and the meeting was held in terms of the liberty granted by the Court under the chairmanship of the Court appointed Chairperson. That apart, it was widely circulated in both English and vernacular newspapers. Therefore, the claim of the objector that she was unaware of the meeting cannot be accepted. 27. The learned Company Judge elaborately examined the litigation history and the share holding pattern urged before the Court. The Company Court upon examination of all the material before the Court and upon consideration of the submissions rendered by the Counsel by the parties in principle upheld a scheme of amalgamation initiated by the Companies. The Companies however, found that the shareholding ratio was the Company. The Company Court upon examination of all the material before the Court and upon consideration of the submissions rendered by the Counsel by the parties in principle upheld a scheme of amalgamation initiated by the Companies. The Companies however, found that the shareholding ratio was the Company. The Company, however, was not convinced that the shareholding ratio adopted was in the best interest of the shareholders in the absence of the methodology resorted to by the Company or by their financial experts in arriving at the shareholding ratio. In the absence of such material being placed before the Court, the learned Company Judge directed the Registrar of Companies to examine the matter and give a detailed report as to the bona fide of the shareholding ratio projected or adopted by the Companies. It is this direction that is being received before this Court both on behalf of the Companies as well as by the objector. In the appeals filed on behalf of the Companies, the grievance is that the learned Company Judge found that having accepted the amalgamation scheme in principle, there was no occasion for the learned Company Judge to issue the further direction to the Registrar of Companies to re-evaluate the share exchange ratio and submit a report. The objector, on the other hand, has filed the appeal questioning the penultimate direction passed by the learned Company Judge on the ground that the learned Company Judge opined that the share exchange ratio arrived was not proper and it required re-evaluation. Accordingly, it is submitted that the scheme for amalgamation ought to have been rejected without any further direction as had been issued. 28. According to the objector the further direction was totally uncalled for and it has the effect of directing the Registrar of Companies to act beyond the powers prescribed under the statute itself. Therefore, to that extent the orders on the directions passed by the learned Company Judge are required interference and the scheme ought to be rejected on that count only. It will be apposite here to refer to the judgment of Miheer H. Mafatlal (supra) which was referred to and relied upon by the learned Company Judge and which has also been pressed into service by Mr. Banerjee, learned Senior Counsel as well as by Mr. R. Mazumdar, learned Senior Counsel. It will be apposite here to refer to the judgment of Miheer H. Mafatlal (supra) which was referred to and relied upon by the learned Company Judge and which has also been pressed into service by Mr. Banerjee, learned Senior Counsel as well as by Mr. R. Mazumdar, learned Senior Counsel. In Miheer H. Mafatlal (supra) , the Apex Court was considering the order passed by Division Bench of the High Court of Gujarat, whereby the Appeal of the appellant therein was dismissed confirming the order of the learned Single Judge who had sanctioned the scheme of amalgamation of two public limited companies, namely, Mafatlal Industries Limited being the transferee company with which Mafatlal Fine Spinning and Manufacturing Company Limited being the transferor company was to be amalgamated. The Single judge therein granted the sanction to the transferee company to amalgamate it in the transferor company under Section 391 (2) under the COMPANIES ACT of 1956. This order was assailed before the Division Bench which came to be dismissed and consequently, the matter traveled in the Supreme Court. 29. The Court after consideration of the facts and circumstances of the case, formulated some questions in paragraph-26 of the said judgment. Those questions are quoted herein below: 1. “Whether the respondent-Company was guilty of hiding the special interest of its Director Shri Arvind Mafatlal from the shareholders while circulating the explanatory statement supporting the Scheme and whether thereby the voting by the equity shareholders got vitiated. 2. Whether the Scheme is unfair and unreasonable to the minority shareholders represented by the appellate. 3. Whether the proposed Scheme of Amalgamation was unfair and amounted to suppression of minority shareholders represented by the appellant and hence liable to be rejected. 4. Whether separate meeting of minority shareholders represented by the appellant was required to be convened on the basis that the appellant’s group represented a special class of equity shareholders. 5. Whether the exchange ratio of two equity shares of MIL for five equity shares of MFL was ex facie unfair and unreasonable to the equity shareholders of MIL and consequently the Scheme of Amalgamation on that account was liable to be rejected. “ 30. All the above mentioned questions were answered in negative by the Apex Court. However for the purposes of this Court, question nos. 4 and 5 will be relevant. “ 30. All the above mentioned questions were answered in negative by the Apex Court. However for the purposes of this Court, question nos. 4 and 5 will be relevant. The paragraphs no.39, 40, 41 and 42 in the judgment dealing with these questions are also are extracted below : “Point 4 39. So far as this point is concerned the relevant provisions of the COMPANIES ACT to which we have made a reference earlier indicate that the Court has to order under Section 391 (1) a meeting of creditors or class of creditors or members or class of members to whom the scheme of compromise or arrangement is offered by the company. The present controversy centres round a meeting of members. Members of the company are shareholders. Part IV of the COMPANIES ACT deals with “Share Capital and Debentures”. Section 82 provides that “the shares or other interest of any member in a company shall be moveable property, transferable in the manner provided by the articles of the company”. As per Section 86 the share capital of a company limited by shares formed after the commencement of this Act, or issued after such commencement, shall be of two kinds only, namely, equity share capital and preference share capital. So far as the Articles of Association of the respondent-Company are concerned they also contemplate two classes of shareholders, namely, equity and preference shareholders. No separate class of equity shareholders is contemplated either by the Act or by the Articles of Association of the respondent-Company. The appellant is admittedly an equity shareholder. Therefore, he would fall within the same class of equity shareholders whose meeting was convened by the orders of the Company Court. However it is vehemently contended by the learned counsel for the appellant that because of the family arrangement of 1979 on which he relies he was a special class of minority equity shareholder who had separate rights against the director of the company and whose special interest because of the pending litigation between him and the Director Shri Arvind Mafatlal was likely to be adversely affected by the Scheme. Therefore, a separate meeting had to be convened as he represented a class within the class of equity shareholders. It is difficult to agree with this contention. Therefore, a separate meeting had to be convened as he represented a class within the class of equity shareholders. It is difficult to agree with this contention. Even though the COMPANIES ACT or the Articles of Association do not provide for such a class within the class of equity shareholders, in a given contingency it may be contended by a group of shareholders that because of their separate and conflicting interests vis-à-vis other equity shareholders with whom they formed a wider class, a separate meeting of such separately interested shareholders should have been convened. But such is not the case of the appellant. It is not his case that his interest as an equity shareholder in the respondent-Company is in any way conflicting with the general interest of the equity shareholders as a class. Consequently it could not be urged by him with any emphasis that the General Body of equity shareholders acting as a class while considering the question of approval of the Scheme was likely to take a decision which would adversely affect the commercial interest of the appellant as an equity shareholder. His personal conflict of interests with the director was totally foreign to the scope of class meeting which was convened to consider the Scheme in question as we have seen earlier while considering the earlier points for determination. It is also to be kept in view that the appellant would have urged with some justification his contention for convening a separate meeting representing for him and his group of dissenting equity shareholders if it was his case that the scheme of compromise and arrangement as offered to him and his group was in any way different from the scheme of compromise and arrangement offered to other equity shareholders who also belonged to the same class in the wider sense of the term. On the express language of Section 391 (1) it becomes clear that where a compromise or arrangement is proposed between a company and its members or any class of them a meeting of such members or class of them has to be convened. On the express language of Section 391 (1) it becomes clear that where a compromise or arrangement is proposed between a company and its members or any class of them a meeting of such members or class of them has to be convened. This clearly presupposes that if the scheme of arrangement or compromise is offered to the members as a class and no separate scheme is offered to any sub-class of members which has a separate interest and a separate scheme to consider, no question of holding a separate meeting of such a sub-class would at all survive. Even otherwise it becomes obvious that as minority shareholder if the appellant had to dissent from the Scheme his dissent representing 5% equity shareholding would have been visible both in a separate meeting, if any, of his sub-class or in the composite meeting where also his 5% dissent would get registered by the appellant either remaining present in person or through proxy. Consequently when one and the same Scheme is offered to the entire class of equity shareholders for their consideration and when commercial interest of the appellant so far as the Scheme is concerned is in common with other equity shareholders he would have a common cause with them either to accept or to reject the Scheme from commercial point of view. Consequently there was no occasion for convening a separate class meeting of the minority equity shareholders represented by the appellant and his group as tried to be suggested. It is also to be kept in view that it is not the case of the appellant that any different terms of compromise were offered to persons holding equity shares who were covered by the family arrangement of 1979 or otherwise. In fact the entire proposal of the scheme of arrangement was one affecting equally and in the like manner all the existing equity shareholders of the respondent-Company. In this connection it is profitable to refer to what the learned author Palmer in his Treatise Company Law, 24th Edn., has to say: “What constitutes a class: The Court does not itself consider at this point what classes of creditors or members should be made parties to the scheme. This is for the Company to decide, in accordance with what the scheme purports to achieve. This is for the Company to decide, in accordance with what the scheme purports to achieve. The application for an order for meetings is a preliminary step, the applicant taking the risk that the classes which are fixed by the Judge, unusually on the applicant's request, are sufficient for the ultimate purpose of the section, the risk being that if in the result, and we emphasise the words ‘in the result’ they reveal inadequacies, the scheme will not be approved. If e.g. rights of ordinary shareholders are to be altered, but those of preference shares are not touched, a meeting of ordinary shareholders will be necessary but not of preference shareholders. If there are different groups within a class the interests of which are different from the rest of the class, or which are to be treated differently under the scheme, such groups must be treated as separate class for the purpose of the scheme. Moreover, when the Company has decided what classes are necessary parties to the scheme, it may happen that one class will consist of a small number of persons who will all be willing to be bound by the scheme. In that case it is not the practice to hold a meeting of that class, but to make the class a party to the scheme and to obtain the consent of all its members to be bound. It is however, necessary for at least one class meeting to be held in order to give the Court jurisdiction under the section.” It is, therefore, obvious that unless a separate and different type of scheme of compromise is offered to a sub-class of a class of creditors or shareholders otherwise equally circumscribed by the class no separate meeting of such sub-class of the main class of members or creditors is required to be convened. On the facts of the present case the appellant has not been able to make out a case for holding a separate meeting of dissenting minority equity shareholders represented by him. The fourth point for determination, therefore, is answered in the negative. That takes us to the consideration of the last point for determination placed for our consideration by the learned Senior Counsel for the appellant. Point 5 40. It was submitted that the exchange ratio of equity shareholders so far as the transferee- Company is concerned works very unfairly and unreasonably to them. That takes us to the consideration of the last point for determination placed for our consideration by the learned Senior Counsel for the appellant. Point 5 40. It was submitted that the exchange ratio of equity shareholders so far as the transferee- Company is concerned works very unfairly and unreasonably to them. As per the proposed Scheme 5 equity shares of the transferor-Company are to be exchanged for 2 equity shares of the transferee-Company. So far as this contention is concerned it has to be kept in view 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, namely, MFL on whose Board of Directors the appellant himself was a member. M/s C.C. Chokshi & Co., a reputed firm of chartered accountants, having considered all the relevant aspects suggested the aforesaid exchange ratio keeping in view the valuation of shares of respective companies. It must at once be stated that valuation of shares is a technical and complex problem which can be appropriately left to the consideration of experts in the field of accountancy. Pennington in his Principles of Company Law mentions four factors which had to be kept in mind in the valuation of shares: “(1) Capital Cover, (2) Yield, (3) Earning Capacity, and (4) Marketability. For arriving at the fair value of share, three well-known methods are applied: (1) The manageable profit-basis method (the Earning Per Share Method) (2) The networth method or the break value method, and (3) The market value method.” So many imponderables enter the exercise of valuation of shares. M/s C.C. Chokshi & Co. considering all the relevant aspects and obviously keeping in view the accounting principles underlying the valuation of shares suggested the said ratio which was found acceptable both by the Board of Directors of the respondent-Company as well as the Board of Directors of the transferor-Company. That the appellant himself as a director of the transferor-Company gave green signal to the Scheme and to this very ratio of exchange of shares. But Shri M.J. Thakore, appearing for the appellant, submitted that from the point of view of the transferor- Company it was very profitable to have two shares of the transferee-Company against five shares of the transferor-Company. But the difficulty arises only from the point of view of the transferee-Company shareholders. But Shri M.J. Thakore, appearing for the appellant, submitted that from the point of view of the transferor- Company it was very profitable to have two shares of the transferee-Company against five shares of the transferor-Company. But the difficulty arises only from the point of view of the transferee-Company shareholders. According to Shri Thakore the proper exchange ratio would be one share of the transferee-Company to six shares of the transferor-Company. It is difficult to appreciate this contention of the appellant. It has to be kept in view that the appellant never bothered to personally remain present in the meeting of equity shareholders for pointing out the unfairness of this exchange ratio to his brother equity shareholders who were likely to be affected by the very same ratio as the appellant. His interest at least to that extent was entirely common and parallel to that of other equity shareholders. But he had no time to remain personally present. He sent his proxy only to record his dissent vote which was in microscopic minority of 5% as compared to 95% majority vote. Not only that even before the Court he did not submit any contrary expert opinion regarding the valuation of shares of transferor and transferee companies for supporting his ipse dixit that the correct ratio would be 6 : 1 so far as transferor and transferee companies were concerned. Shri Shanti Bhushan, learned Senior Counsel for the appellant, having realised this difficulty submitted that at least these proceedings are continuation of proceedings before the High Court, therefore, this Court may now in order to satisfy itself send for the opinion of an expert. It is difficult to agree. The appellant who was propounding this theory of correct exchange ratio had nothing to offer in support of his contention both before the learned Single Judge as well as before the High Court. It has to be kept in view that the matter was fiercely contested on all permissible points before the learned Single Judge. The proceedings were pending before the High Court for more than two years from 8-2-1994 till 12-7-1996 when the Division Bench disposed of the appeal. It has to be kept in view that the matter was fiercely contested on all permissible points before the learned Single Judge. The proceedings were pending before the High Court for more than two years from 8-2-1994 till 12-7-1996 when the Division Bench disposed of the appeal. For all these years neither before the learned Single Judge nor before the High Court in appeal the appellant thought it fit to request the Court to either call for the report of any other expert on valuation of shares nor did he himself get such report for placing for consideration of the Court in support of his supposed better ratio. It has also to be kept in view that which exchange ratio is better is in the realm of commercial decision of well-informed equity shareholders. It is not for the Court to sit in appeal over this value judgment of equity shareholders who are supposed to be men of the world and reasonable persons who know their own benefit and interest underlying any proposed scheme. With open eyes they have okayed this ratio and the entire Scheme. 40% of the majority shareholders were financial institutions who were supposed to be well versed on the aspect of valuation of shares. They had no objection to the exchange of 2 shares of the transferee-Company for 5 shares of the transferor-Company. As stated earlier it was a sort of a package duly considering all imponderables and implicit factors which the shareholders had to keep in view for deciding whether to approve the Scheme of Amalgamation or not. The exchange ratio was only one of the items. They thought it fit in their commercial wisdom to accept the Scheme as a whole along with the exchange ratio presumably in expectation of better profits in years to come when the amalgamated companies would operate and when there would be, according to the shareholders, better prospects of earning greater dividends. They willingly agreed to give in exchange two shares of the transferee-Company for five shares of the transferor-Company and made them available to the shareholders of the transferor-Company. The appellant was representing only 5% dissenting shareholders and his objection was almost a voice in the wilderness, which did not appeal to the majority of his brother shareholders. They willingly agreed to give in exchange two shares of the transferee-Company for five shares of the transferor-Company and made them available to the shareholders of the transferor-Company. The appellant was representing only 5% dissenting shareholders and his objection was almost a voice in the wilderness, which did not appeal to the majority of his brother shareholders. Shri Shanti Bhushan, learned Senior Counsel for the appellant, in this connection invited our attention to the observation of the Division Bench in its judgment at page 375 wherein it has been observed that “if one were to examine the exactitude of exchange ratio that may be offered fairly on the arithmetic scale by taking into consideration various details, there is some force in what were suggested by Mr B.R. Shah on behalf of the appellant. However, keeping in view the scope of enquiry which the Court is required to undertake and with whose findings we are concerned, it will not be permissible for us in law to undertake this exercise in the facts and circumstances of the present case in absence of bona fides”. We fail to appreciate how this observation can be of any avail to the learned Senior Counsel for the appellant as all that the Court wanted to suggest was that even assuming that some other exchange ratio can be suggested to be a better one, it was for the equity shareholders who acted bona fide in the interest of their class as a whole to accept even a less favourable ratio considering other benefits that may offset such less favourable ratio once an amalgamation goes through. We wholly concur with this view. In this connection we may also refer to a decision of Maugham, J., in Hoare & Co. (No. 2) Re, case [1933 All ER Rep 105, Ch D] wherein it was laid down that where statutory majority had accepted the offer the onus must rest on the applicants to satisfy the court that the price offered is unfair. In this connection we may also refer to a decision of Maugham, J., in Hoare & Co. (No. 2) Re, case [1933 All ER Rep 105, Ch D] wherein it was laid down that where statutory majority had accepted the offer the onus must rest on the applicants to satisfy the court that the price offered is unfair. In this connection the following pertinent observations were made by the learned Judge: “The other conclusion I draw is this … the court ought to regard the scheme as a fair one inasmuch as it seems to me impossible to suppose that the court, in the absence of very strong grounds, is to be entitled to set up its own view of the fairness of the scheme in opposition to so very large a majority of the shareholders who are concerned. Accordingly, without expressing a final opinion on the matter, because there may be special circumstances in special cases, I am unable to see that I have any right to order otherwise in such a case as I have before me, unless it is affirmatively established that, notwithstanding the views of a very large majority of shareholders, the scheme is unfair.” We may also refer to a decision of the Gujarat High Court in Kamala Sugar Mills Ltd., Re [(1984) 55 Comp Cas 308 (Mad)] dealing with an identical objection about the exchange ratio adopted in the scheme of compromise and arrangement. The Court observed as under: “Once the exchange ratio of the shares of the transferee-company to be allotted to the shareholders of the transferor-company has been worked out by a recognised firm of chartered accountants who are experts in the field of valuation and if no mistake can be pointed out in the said valuation, it is not for the court to substitute its exchange ratio, especially when the same has been accepted without demur by the overwhelming majority of the shareholders of the two companies or to say that the shareholders in their collective wisdom should not have accepted the said exchange ratio on the ground that it will be detrimental to their interest.” These observations in our view represent the correct legal position on this aspect. We may also keep in view that in the present case not only expert like M/s C.C. Chokshi & Co. We may also keep in view that in the present case not only expert like M/s C.C. Chokshi & Co. had suggested the ratio but another independent body ICICI Security & Finance Company Limited reached the same conclusion which was conveyed by its letter dated 10-11-1993 to the company approving of the entire Scheme along with suggested ratio. A mere look at the report of the Chartered Accountants M/s C.C. Chokshi & Co. shows that various factors underlying the scheme of compromise and arrangement were taken into consideration while suggesting the exchange ratio by the said reputed firm of chartered accountants. The said opinion had taken into account the fact that on amalgamation shares have to be cancelled. Increase in share premium account in equity capital of the MIL will also have to be taken into account as a result of final call made in respect of Bond 1992 issue. It has also taken into account significant increase in the paid-up equity of MIL as a result of issue of its Bond in the international market. It has undertaken exercise in calculating net worth of the two companies. It has also referred to the method of valuation of exchange ratio on the basis of earning per share of the two companies by taking into account five years' working results of the two companies making certain adjustments. Apart from taking into consideration the past results of the two companies, the chartered accountants have taken into account the potentiality of the two companies to earn profit in future, considering existing expansion and modernisation of projected and planned expenditure by the MIL as well as subsidiary and sister concern in hand. It has also taken into account the market price of equity shares of past 24 months, declared dividend by the two companies, the overall effect of security scam in the market price, realisable investment and their market value. Taking into consideration multifarious considerations detailed in the report, note was also taken of the fact that MIL held substantial shares of MFL, which shall have to be cancelled on merger of MFL with MIL. Two fully paid-up equity shares of MIL of Rs 100 each for every five equity shares of Rs 100 each of MFL, was considered to be a fair exchange ratio to be offered as term of amalgamation. Two fully paid-up equity shares of MIL of Rs 100 each for every five equity shares of Rs 100 each of MFL, was considered to be a fair exchange ratio to be offered as term of amalgamation. It was clarified that, “in absolute terms it would mean that the MIL is keeping consideration of equity capital of par value of Rs 7.77 crores which at the last issue price of share amounts about to Rs 38.84 crores and which at the current market price amounts to Rs 57.4 crores. At the stage of dividend declared for 1992-93, it will result in a cost in terms of distributable profits of Rs 2.72 crores. For an undertaking in a diversified business activity of textile and chemicals with the total infrastructure, know-how, technology tie-up and range of established products and capacities and potential the aforesaid cost to MIL can be regarded as fair and reasonable”. 41. The aforesaid report of the chartered accountants heavily weighed with the transferor-Company's Board of Directors which comprised, amongst others, the appellant himself but also the Board of Directors of the transferee-Company and also weighed with the General Body of equity shareholders who approved the Scheme and the ratio with overwhelming majority. No grievance, therefore, can be made by the appellant at the stage of company petition proceedings for demonstrating the ratio to be ex facie unfair and unacceptable as the appellant would like to have it. 42. Undeterred by this position Shri Thakore, learned counsel for the appellant in support of his contention that the exchange ratio was ex facie unfair to the shareholders of the transferee-Company, invited our attention to the statement showing the working results of both the transferor and transferee companies as found at Annexures M and N of Vol. II of the Paper-Book at pages 534 and 535. He submitted that these statements showing the working results of the company for the last five years ended 31-3-1993 showed that the earning per equity share after depreciation and tax so far as the respondent-Company was concerned was Rs 30 while earning of transferor-Company Mafatlal Fine Spinning and Manufacturing Company Limited was only Rs 7 for the relevant five years. He also invited our attention to the break-up value of the shares of company on the basis of the balance sheet as on 31-3- 1993 so far as the respondent-Company was concerned. He also invited our attention to the break-up value of the shares of company on the basis of the balance sheet as on 31-3- 1993 so far as the respondent-Company was concerned. Annexure ‘Q’ at page 538 showed value per equity share of Rs 100 each at Rs 1515 while so far as the transferor-Company was concerned the break-up value per equity share was Rs 259. That may be so. But as a package deal when the Scheme as a whole is examined and found to be advantageous to the economic and commercial interest of shareholders as a class only one or two item simplicitor for deciding the exchange ratio cannot tilt the balance as so many factors and aspects would enter that exercise. It was undertaken by expert body of chartered accountants like M/s C.C. Chokshi & Co. Before parting with the discussion on this point it would be apposite to refer to the decision of this Court in Hindustan Lever Employees' Union [1995 Supp (1) SCC 499] . In paragraph 41 of the Report Justice Sen speaking for himself and Venkatachaliah, C.J. and to which Sahai, J. concurred has observed that the problem of valuation in the case of amalgamation of two companies has been dealt with by Weinberg and Blank in the book Take-overs and Mergers in which it is stated that some or all of the 8 listed factors will have to be taken into account in determining the final share exchange ratio. The Court has also approved the fixation of exchange ratio of the shares of the companies on the basis of adoption of combination of two or more well-known methods of valuation of shares out of many such methods. In para 37 of the Report it has been observed that the question is what method should be adopted for arriving at a proper exchange ratio. The usual rule is that shares of the going concern must be taken at quoted market value. This principle was also recognised by this Court in the case of CWT v. Mahadeo Jalan [ (1973) 3 SCC 157 : 1973 SCC (Tax) 103] . It is not the case of the appellant that M/s C.C. Chokshi & Co. had not taken into consideration the quoted market value of shares of both the companies which were going concerns and which were subjected to the Scheme of Amalgamation in question. It is not the case of the appellant that M/s C.C. Chokshi & Co. had not taken into consideration the quoted market value of shares of both the companies which were going concerns and which were subjected to the Scheme of Amalgamation in question. For all these reasons, therefore, there is no substance in this contention canvassed on behalf of the appellant that the exchange ratio was ex facie unfair to the equity shareholders of the transferee-Company. The fifth point for determination is also, therefore, answered in the negative.” 31. The Apex Court in the said judgment interpreted the scope of judicial review a Company Court in a proceeding for sanction as per provisions. Relevant paragraphs i.e. paragraph nos. 28 & 29 are extracted below: “ 28. The relevant provisions of the COMPANIES ACT , 1956 are found in Chapter V of Part VI dealing with “Arbitration, Compromises, Arrangements and Reconstructions”. In the present proceedings we will be concerned with Sections 391 and 393 of the Act. 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 under Section 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. 393. (1) Where a meeting of creditors or any class of creditors, or of members or any class of members, is called under Section 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, stating any material interests of the directors, managing directors, managing agents, 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 insofar 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.” 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 voters concerned 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 company concerned, has to act merely as a rubber stamp and 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 scheme concerned 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 to a dissenting minority of creditors or 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 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. 29. However further question remains whether the Court has jurisdiction like an appellate authority to minutely scrutinise the scheme and to arrive at an independent conclusion whether the scheme should be permitted to go through or not when the majority of the creditors or members or their respective classes have approved the scheme as required by Section 391 sub-section (2). On this aspect the nature of compromise or arrangement between the company and the creditors and members has to be kept in view. It is the commercial wisdom of the parties to the scheme who have taken an informed decision about the usefulness and propriety of the scheme by supporting it by the requisite majority vote that has to be kept in view by the Court. The Court certainly would not act as a court of appeal and sit in judgment over the informed view of the parties concerned to the compromise as the same would be in the realm of corporate and commercial wisdom of the parties concerned. The Court certainly would not act as a court of appeal and sit in judgment over the informed view of the parties concerned to the compromise as the same would be in the realm of corporate and commercial wisdom of the parties concerned. The Court has neither the expertise nor the jurisdiction to delve deep into the commercial wisdom exercised by the creditors and members of the company who have ratified the Scheme by the requisite majority. Consequently the Company Court's jurisdiction to that extent is peripheral and supervisory and not appellate. The Court acts like an umpire in a game of cricket who has to see that both the teams play their game according to the rules and do not overstep the limits. But subject to that how best the game is to be played is left to the players and not to the umpire. The supervisory jurisdiction of the Company Court can also be culled out from the provisions of Section 392 of the Act which reads as under: “392. (1) Where a High Court makes an order under Section 391 sanctioning a compromise or an arrangement in respect of a company, it— (a) shall have power to supervise the carrying out of the compromise or arrangement; and (b) may, at the time of making such order or at any time thereafter, give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper working of the compromise or arrangement. (2) If the Court aforesaid is satisfied that a compromise or arrangement sanctioned under Section 391 cannot be worked satisfactorily with or without modifications, it may, either on its own motion or on the application of any person interested in the affairs of the company, make an order winding up the company, and such an order shall be deemed to be an order made under Section 433 of this Act. (3) The provisions of this section shall, so far as may be, also apply to a company in respect of which an order has been made before the commencement of this Act under Section 153 of the Indian COMPANIES ACT , 1913 (7 of 1913), sanctioning a compromise or an arrangement.” Of course this section deals with post-sanction supervision. (3) The provisions of this section shall, so far as may be, also apply to a company in respect of which an order has been made before the commencement of this Act under Section 153 of the Indian COMPANIES ACT , 1913 (7 of 1913), sanctioning a compromise or an arrangement.” Of course this section deals with post-sanction supervision. But the said provision itself clearly earmarks the field in which the sanction of the Court operates. It is obvious that the supervisor cannot ever be treated as the author or a policy-maker. Consequently the propriety and the merits of the compromise or arrangement have to be judged by the parties who as sui juris with their open eyes and fully informed about the pros and cons of the scheme arrive at their own reasoned judgment and agree to be bound by such compromise or arrangement. The Court cannot, therefore, undertake the exercise of scrutinising the scheme placed for its sanction with a view to finding out whether a better scheme could have been adopted by the parties. This exercise remains only for the parties and is in the realm of commercial democracy permeating the activities of the concerned creditors and members of the company who in their best commercial and economic interest by majority agree to give green signal to such a compromise or arrangement. The aforesaid statutory scheme which is clearly discernible from the relevant provisions of the Act, as seen above, has been subjected to a series of decisions of different High Courts and this Court as well as by the courts in England which had also occasion to consider schemes under pari materia English Company Law. We will briefly refer to the relevant decisions on the point. But before we do so we may also usefully refer to the observations found in the oft-quoted passage in Buckley on the COMPANIES ACT , 14th Edn. We will briefly refer to the relevant decisions on the point. But before we do so we may also usefully refer to the observations found in the oft-quoted passage in Buckley on the COMPANIES ACT , 14th Edn. They are as under: “In exercising its power of sanction the court will see, first that the provisions of the statute have been complied with, second, that the class was fairly represented by those who attended the meeting and that the statutory majority are acting bona fide and are not coercing the minority in order to promote interest adverse to those of the class whom they purport to represent, and thirdly, that the arrangement is such as an intelligent and honest man, a member of the class concerned and acting in respect of his interest, might reasonably approve. The court does not sit merely to see that the majority are acting bona fide and thereupon to register the decision of the meeting, but at the same time, the court will be slow to differ from the meeting, unless either the class has not been properly consulted, or the meeting has not considered the matter with a view to the interest of the class which it is empowered to bind, or some blot is found in the scheme.” In the case of Alabama, New Orleans, Texas and Pacific Junction Rly. Co., Re [(1891) 1 Ch 213 : (1886-90) All ER Rep Ext 1143] the relevant observations regarding the power and jurisdiction of the Company Court which is called upon to sanction a scheme of arrangement or compromise between the company and its creditors or shareholders were made by Lindley, L.J. as under: “What the court has to do is to see, first of all, that the provisions of that statute have been complied with; and, secondly, that the minority has been acting bona fide. The court also has to see that the minority is not being overriden by a majority having interests of its own clashing with those of the minority whom they seek to coerce. Further than that, the court has to look at the scheme and see whether it is one as to which persons acting honestly, and viewing the scheme laid before them in the interests of those whom they represent, take a view which can reasonably be taken by businessmen. Further than that, the court has to look at the scheme and see whether it is one as to which persons acting honestly, and viewing the scheme laid before them in the interests of those whom they represent, take a view which can reasonably be taken by businessmen. The court must look at the scheme, and see whether the Act has been complied with, whether the majority are acting bona fide, and whether they are coercing the minority in order to promote interests adverse to those of the class whom they purport to represent; and then see whether the scheme is a reasonable one or whether there is any reasonable objection to it, or such an objection to it as that any reasonable man might say that he could not approve it.” To a similar effect were the observations of Fry, L.J., which read as under: “The next enquiry is: Under what circumstances is the court to sanction a resolution which has been passed approving of a compromise or arrangement? I shall not attempt to define what elements may enter into the consideration of the court beyond this, that I do not doubt for a moment that the court is bound to ascertain that all the conditions required by the statute have been complied with; it is bound to be satisfied that the proposition was made in good faith; and, further, it must be satisfied that the proposal was at least so far fair and reasonable, as that an intelligent and honest man, who is a member of that class, and acting alone in respect of his interest as such a member, might approve of it. What other circumstances the court may take into consideration I will not attempt to forecast.” In Anglo-Continental Supply Co. What other circumstances the court may take into consideration I will not attempt to forecast.” In Anglo-Continental Supply Co. Ltd., Re [(1922) 2 Ch 723 : 91 LJ Ch 658] Ashtury, J., a century later reiterated the very same propositions as under: “Before giving its sanction to a scheme of arrangement the court will see firstly that the provisions of the statute have been complied with; secondly that the class was fairly represented by those who attended the meeting and that the statutory majority are acting bona fide and are not coercing the minority in order to promote interests adverse to those of the class whom they purport to represent; and, thirdly, that the arrangement is such as a man of business would reasonably approve.” The learned Single Judge of the Calcutta High Court in the case of Mankam Investments Ltd., Re [(1995) 4 Comp LJ 330 (Cal)] relying on a catena of decisions of the English courts and Indian High Courts observed as under on the power and jurisdiction of the Company Court which is called upon to sanction a scheme of merger and amalgamation of companies: “It is a matter for the shareholders to consider commercially whether amalgamation or merger is beneficial or not. The court is really not concerned with the commercial decision of the shareholders until and unless the court feels that the proposed merger is manifestly unfair or is being proposed unfairly and/or to defraud the other shareholders. Whether the merged companies will be ultimately benefited or will be able to economise in the matter of expenses is a matter for the shareholders to consider. If three companies are amalgamated, certainly, there will be some economies in the matter of maintaining accounts, filing of returns and various other matters. Whether the merged companies will be ultimately benefited or will be able to economise in the matter of expenses is a matter for the shareholders to consider. If three companies are amalgamated, certainly, there will be some economies in the matter of maintaining accounts, filing of returns and various other matters. However, the court is really not concerned with the exact details of the matter and if the shareholders approved the scheme by the requisite majority, then the court only looks into the scheme as to find out that it is not manifestly unfair and/or is not intended to defraud or do injustice to the other shareholders.” We may also in this connection profitably refer to the judgment of this Court in the case of Employees' Union v. Hindustan Lever Ltd. [1995 Supp (1) SCC 499] wherein a Bench of three learned Judges speaking through Sen, J. on behalf of himself and Venkatachaliah, C.J., and with which decision Sahai, J., concurred, Sahai, J., in his concurring judgment in the aforesaid case has made the following pertinent observations in this connection in the Report: (SCC pp. 506-08, paras 3-6) “But what was lost sight of was that the jurisdiction of the court in sanctioning a claim of merger is not to ascertain with mathematical accuracy if the determination satisfied the arithmetical test. A company court does not exercise an appellate jurisdiction. *** Section 394 casts an obligation on the court to be satisfied that the scheme for amalgamation or merger was not contrary to public interest. The basic principle of such satisfaction is none other than the broad and general principles inherent in any compromise or settlement entered between parties that it should not be unfair or contrary to public policy or unconscionable. In amalgamation of companies, the courts have evolved, the principle of ‘prudent business management test’ or that the scheme should not be a device to evade law. But when the court is concerned with a scheme of merger with a subsidiary of a foreign company then the test is not only whether the scheme shall result in maximising profits of the shareholders or whether the interest of employees was protected but it has to ensure that merger shall not result in impeding promotion of industry or shall obstruct growth of national economy. Liberalised economic policy is to achieve this goal. Liberalised economic policy is to achieve this goal. The merger, therefore, should not be contrary to this objective. Reliance on English decisions Hoare & Co. Ltd., Re [1933 All ER Rep 105, Ch D] and Bugle Press Ltd., Re [1961 Ch 270 : (1960) 1 All ER 768 : (1960) 2 WLR 658] that the power of the court is to be satisfied only whether the provisions of the Act have been complied with or that the class or classes were fully represented and the arrangement was such as a man of business would reasonably approve between two private companies may be correct and may normally be adhered to but when the merger is with a subsidiary of a foreign company then economic interest of the country may have to be given precedence. The jurisdiction of the court in this regard is comprehensive.” Sen, J., speaking for himself and Venkatachaliah, C.J., also towed the line indicated by Sahai, J., about the jurisdiction of the Company Court while sanctioning the scheme and made the following pertinent observations: (SCC p. 528, para 84) “An argument was also made that as a result of the amalgamation, a large share of the market will be captured by HLL. But there is nothing unlawful or illegal about this. The Court will decline to sanction a scheme of merger, if any tax fraud or any other illegality is involved. But that is not the case here. A company may, on its own, grow up to capture a large share of the market. But unless it is shown that there is some illegality or fraud involved in the scheme, the Court cannot decline to sanction a scheme of amalgamation. It has to be borne in mind that this proposal of amalgamation arose out of a sharp decline in the business of TOMCO. Dr Dhavan has argued that TOMCO is not yet a sick Company. That may be right, but TOMCO at this rate will become a sick Company, unless something can be done to improve its performance. In the last two years, it has sold its investments and other properties. If this proposal of amalgamation is not sanctioned, the consequence for TOMCO may be very serious. The shareholders, the employees, the creditors will all suffer. The argument that the Company has large assets is really meaningless. In the last two years, it has sold its investments and other properties. If this proposal of amalgamation is not sanctioned, the consequence for TOMCO may be very serious. The shareholders, the employees, the creditors will all suffer. The argument that the Company has large assets is really meaningless. Very many cotton mills and jute mills in India have become sick and are on the verge of liquidation, even though they have large assets. The Scheme has been sanctioned almost unanimously by the shareholders, debenture-holders, secured creditors, unsecured creditors and preference shareholders of both the Companies. There must exist very strong reasons for withholding sanction to such a scheme. Withholding of sanction may turn out to be disastrous for 60,000 shareholders of TOMCO and also a large number of its employees.” In view of the aforesaid settled legal position, therefore, the scope and ambit of the jurisdiction of the Company Court has clearly got earmarked. The following broad contours of such jurisdiction have emerged: 1. The sanctioning court has to see to it that all the requisite statutory procedure for supporting such a scheme has been complied with and that the requisite meetings as contemplated by Section 391 (1)(a) have been held. 2. That the scheme put up for sanction of the Court is backed up by the requisite majority vote as required by Section 391 sub-section (2). 3. That the meetings concerned of the creditors or members or any class of them had the relevant material to enable the voters to arrive at an informed decision for approving the scheme in question. That the majority decision of the concerned class of voters is just and fair to the class as a whole so as to legitimately bind even the dissenting members of that class. 4. That all necessary material indicated by Section 393(1)(a) is placed before the voters at the meetings concerned as contemplated by Section 391 sub-section (1). 5. That all the requisite material contemplated by the proviso of sub-section (2) of Section 391 of the Act is placed before the Court by the applicant concerned seeking sanction for such a scheme and the Court gets satisfied about the same. 6. That the proposed scheme of compromise and arrangement is not found to be violative of any provision of law and is not contrary to public policy. 6. That the proposed scheme of compromise and arrangement is not found to be violative of any provision of law and is not contrary to public policy. 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. 7. That the Company Court has also to satisfy itself that members or class of members or creditors or class of creditors, as the case may be, were acting bona fide and in good faith and were not coercing the minority in order to promote any interest adverse to that of the latter comprising the same class whom they purported to represent. 8. That the scheme as a whole is also found to be just, fair and reasonable from the point of view of prudent men of business taking a commercial decision beneficial to the class represented by them for whom the scheme is meant. 9. Once the aforesaid broad parameters about the requirements of a scheme for getting sanction of the Court are found to have been met, the Court will have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class of persons who with their open eyes have given their approval to the scheme even if in the view of the Court there would be a better scheme for the company and its members or creditors for whom the scheme is framed. The Court cannot refuse to sanction such a scheme on that ground as it would otherwise amount to the Court exercising appellate jurisdiction over the scheme rather than its supervisory jurisdiction. The aforesaid parameters of the scope and ambit of the jurisdiction of the Company Court which is called upon to sanction a scheme of compromise and arrangement are not exhaustive but only broadly illustrative of the contours of the Court's jurisdiction. 32. The Apex Court upon due consideration of the matter has summarized the scope and admit the jurisdiction of the Company Court while sanctioning a scheme of amalgamation/merger as under. These are enumerated as below: “1. 32. The Apex Court upon due consideration of the matter has summarized the scope and admit the jurisdiction of the Company Court while sanctioning a scheme of amalgamation/merger as under. These are enumerated as below: “1. The sanctioning Court has to see to it that all the requisite statutory procedure for supporting such a scheme has been complied with and that the requisite meetings as contemplated by Section 391 (1) (0) have been held. 2. That the scheme put up for sanction of the Court is backed up by the requisite majority vote as required by Section 391 , sub-section (2). 3. That the concerned meetings of the creditors or members or any class of them had the relevant material to enable the voters to anive at an informed decision for approving the scheme in question. That the majority decision of the concerned class of voters is just and fair to the class as a whole so as to legitimately bind even the dissenting members of that class. 4. That all necessary material indicated by Section 393 (1) (a) is placed before the voters at the concerned meetings as contemplated by Section 391 , sub-section (1). 5. That all the requisite material contemplated by the proviso to sub-section (2) of Section 391 of the Act is placed before the Court by the concerned applicant seeking sanction for such a scheme and the Court gets satisfied about the same. 6. That the proposed scheme of compromise and arrangement is not found to be violative of any provision of law and is not contrary to public policy. For ascertaining the real purpose underlying the Scheme with a view to be satisfied on this aspect, the Court, if necessary, can pierce veil of apparent corporate purpose underlying the scheme and can judiciously X-ray the same. 7. That the Company Court has also to satisfy itself that members of class of members or creditors or class of creditors, as the case may be, were acting bona fide and in good faith and were not coercing the majority in order to promote any interest adverse to that of the latter comprising of the same class whom they purported to represent. 8. 8. That the scheme as a whole is also found to be just, fair and reasonable from the point of view of prudent men of business taking a commercial decision beneficial to the class represented by them for whom the scheme is meant. 9. Once the aforesaid broad parameters about the requirement of a scheme for getting sanction of the Court are found to have been met. the Court will have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class of persons who with their open eyes have given their approval to the scheme even if in the view of the Court there would be a better scheme for the company and its members or creditors for whom the scheme is framed. The Court cannot refuse to sanction such a scheme on that ground as it would otherwise amount to the Court exercising appellate jurisdiction over the scheme rather than its supervisory jurisdiction." 33. In Hindustan Labour Employees (supra), the Apex Court concluded that there are three well-accepted methods to arrive at the fair value of shares, namely: 1. Yield Method 2. Asset Value Method 3. Market Value Method 34. The Apex Court held that the Company Court will decline to sanction a scheme of merger if any fraud or illegality is found to be involved. There is no quarrel with the proposition of law which has been laid down by the Apex Court in the judgments relied upon at the bar before this Court. The judgments being elaborately discussed in the judgment under the Appeal of the Company Court, the same are not referred to here again. It is also seen from the judgment of the Company Court that the scheme in principle appears to be based on business/commercial consideration conditions of the two companies. The Company Court therefore saw no hindrance or impediment in the sanction of the scheme. The only hindrance noticed by the Company Court is the allotment of issue or shares by the transferring company as per the shares exchange ratio in absence of any materials being placed into the Company Court, the Company court returned the finding that the share exchange ratio appears to be heavily loaded in favour of the shareholders of the transferor company and it appears to be unrealistic and illogical, if not downright absurd. The basis for this conclusion is the fact that the transferor company was under lockout for a long period and had accumulated losses and had also filed a petition before the High Court for voluntary liquidation which although was subsequently withdrawn. Before the Company Court it was urged that as per the share exchange ratio projected in the scheme for every 1000 value of shares of the transferee company a shareholder in the transferor company will get Rs. 7860/- value of shares in the transferee company and that this exchange ratio has been fixed on the basis of the earning capacity of transferor company and not on the basis of net asset value or net worth as appearing from the balance sheet. Such explanation did not inspire confidence of the learned Company Judge to sanction the said scheme as no materials have been disclosed in the petition or in the pleadings as to how the particular share exchange ratio is worked-out. The learned Company Judge had concluded from the standpoint of commercial strength of the two companies that the share exchange ratio did not appear to be sound and that the same is also required to be examined in the light of the litigation history of the transferee company and the following consequential directions were issued: i) Court has no objection to sanction the scheme for amalgamation of Buragohain Tea Company (Transferor Company) with B&A Ltd. (Transferee Company). ii) However, having regard to the litigation history in the Transferee Company involving the Objector and other related developments and also having regard to the financial status of the Transferor Company as discussed above, objection raised by the Objector and by the Central Govt through the Regional Director regarding the exchange ratio of shares between the two companies cannot be brushed aside. iii) The exchange ratio of 786 fully paid up equity share of Rs.10.00 each of the Transferee Company to be issued and allotted for every one enquiry share of Rs.1,000.00 held in the Transferor Company does nto appear to be fair and justified. iv) Accordingly, Court directs the Registrar of Companies, Shillong to work out the exchange ratio in a fair manner through independent experts keeping in view the discussions made above and submit the same to the Court in two months time. 35. iv) Accordingly, Court directs the Registrar of Companies, Shillong to work out the exchange ratio in a fair manner through independent experts keeping in view the discussions made above and submit the same to the Court in two months time. 35. A careful perusal of the penultimate directions reveal that at direction No.i, the learned Company Judge clearly ordered “Court has no objection to sanction the scheme for amalgamation of Buragohain Tea Company (Transferor Company) with B&A Ltd. (Transferee Company)”. This direction therefore makes it apparent that the Court was inclined to grant sanction in favour of the amalgamation coupled with the observation made in the said order that the Court finds this scheme to be acceptable in principle. However, the scheme was no sanctioned for the reasons reflected in the directions at serial No.ii, iii & iv of the judgment. 36. In so far as the direction No.ii is concerned, the same is based on the objections raised by the Regional Director. However, the affidavit filed by the Regional Director raising objections to the share exchange ratio, however, is also not found to be supported by any material and justification as to why the objection was raised by the Regional Director and whether such objection has been raised on the basis of due examination of the audited accounts and the mechanism adopted by the financial experts/ advisors of the companies while working out the share exchange ratio and/or whether such share exchange ratio is otherwise contrary to the procedure prescribed or to the statute itself. Consequently, the directions contained at serial no.iii also does not appear to be based on any materials available before the Company Court and which ultimately resulted in the directions at serial No.iv. This Court is of the view that ordinarily under these facts and circumstances, this Court would have been inclined to interfere with the directions from No. ii, iii and iv in view of the clear direction at serial No.i. However, the Court cannot be oblivious of the fact that the proposed appointed date as per the scheme of amalgamation was 01.04.2011 and the order was passed by the learned Company Judge in Company Petition no. 3 of 2013 filed by Buragohain Tea Co. Ltd., namely, the transferor company on 28.07.2015. 3 of 2013 filed by Buragohain Tea Co. Ltd., namely, the transferor company on 28.07.2015. It is not in dispute that the scheme of amalgamation adopted by the shareholders and members of the transferor company and the transferee company was based on the commercial wisdom of the shareholders and the advisories issued by the financial advisors or auditors in these companies. It will therefore not be a prudent to accept that business and commercial decisions were taken in the meetings held in the year 2013 when the shareholders agreed to the appointed date of the scheme to be 01.04.2011 subject to sanction being granted by the High Court, the business dynamics and the commercial equations between the companies have continued to remain static for more than a decade and the grant of sanction at this stage by the Company Court will be in the best interest of the companies concern. 37. The judgments which are referred to by the parties and which still governs the field clearly reveals that the Company Court does not sit as an appellate authority over the scheme of amalgamation placed before the Court and will not review the matter by substituting the decision or the conclusion arrived at by the shareholders/members with the views of the Company Court. The law as it stands today also makes it very clear that there is ample power bestowed on the Company Court that while examining a scheme of amalgamation for grant of sanction, the Company Court will not accord sanction to any or all schemes placed before it. The law laid down by the Apex Court makes it emphatically clear that Company Court can lift the veil to look into the true nature and the interest of the shareholders and the bona-fides of the resolutions adopted vis-a- vis the scheme of amalgamation and if it is found that there is any illegality or fraud or that the scheme is against a public policy, the Company Court is within its power refuse to grant sanction to such schemes of amalgamation with or without modifications. Therefore, merely because the learned Company Judge had issued directions which has been sought to be questioned in these appeals, it cannot be said that the learned Company Court exceeded its jurisdiction under the prescribed provisions of the statute while examining the scope of grant of sanction of scheme of amalgamation. Therefore, merely because the learned Company Judge had issued directions which has been sought to be questioned in these appeals, it cannot be said that the learned Company Court exceeded its jurisdiction under the prescribed provisions of the statute while examining the scope of grant of sanction of scheme of amalgamation. As such it cannot be said that the directions issued by the learned Company Judge are perverse and/or it contrary to the statute and that it requires interference. 38. Having said that there is another aspect which has not been urged before the Court which nevertheless, will have to be addressed by the Court. The impugned order dated 28.07.2015 which is challenged before this Appellate Court is an order passed with interim directions by the learned Company Judge. By order dated 28.07.2015 passed in Company Petition No. 3 of 2013, which has been assailed in the present proceedings, the learned Company Judge did not dispose of the said petition, rather the Registrar of Companies was directed to re-evaluate the share exchange ratio and thereafter, submit the same to the Court within two months and it was left open by the Court to consider the scheme for sanction with modifications, if required. Thereafter, in view of the appeals being filed and orders being passed by the Court, the Company Petition No. 3 of 2013 could not be disposed of. 39. Under such circumstances, this appeal assailing the order dated 28.07.2015 passed by the learned Company Judge is essentially an Intra Court appeal against an interim order. Ordinarily in an Intra Court appeal unless the directions issued by the Court are found to be perverse or contrary to the findings of the statutes or the law laid down by the Apex Court, an Appellate Court will not ordinarily interfere in such Intra Court Appeal. Reference at this stage is required to be made to the judgment of the Apex Court rendered in Management of Narendran and Company Private Limited vs. Workmen of Narendra and Company reported in (2016) 3 SCC 340 , where the Apex Court declined to interfere with the orders passed in an Intra Court appeal unless the same is found to be perverse or contrary to law. In Management of Narendran and Company Private Limited (supra), the Apex Court held that in an Intra Court Appeal on a finding of fact unless the Appellate Bench concludes that the findings of the learned Single Judge are perverse, it will not disturb the same, merely because another or a better view is possible, the order of the learned Single Judge should not be interfered with unless both sides agree for a fairer approach on the review. Similar view is also reiterated in N. Ramachandra Reddy vs. State of Telangana and others reported in (2020) 16 SCC 478 as well as in Airports for Authority of India vs. Pradip Kumar Banerjee reported in (2025) 4 SCC 111 . It was held by the Apex Court that the Appellate Court must restrain itself and interference into a judgment passed by the learned Single Judge is permissible only, if the judgment of the learned Single Judge is perverse or suffers from an error apparent in law. Unless such a finding is recorded, a Division Bench ordinarily ought not to interfere with the findings of the learned Single Judge in an Intra Court Appeal. 40. Having considered the law laid down by Apex Court in this aspect, it must be stated that this principle must be strictly followed when examining an Intra Court Appeal, considering that the order assailed in these appeals is an interim order and this order did not conclude the proceedings pending before the Company Court. 41. Under such circumstances, this Court is of the considered view that taking into consideration the fact that both the parties before the Court are agreed that consequential directions for re-evaluation of share exchange ratio were not called for, this Court considers it appropriate to dispose of these appeals remitting the matters back to the learned Company Judge to conclude the proceedings, as expeditiously as possible, without being influenced by the penultimate directions issued by the learned Company Judge on 28.07.2015. It will be open for the learned Company Judge to re-evaluate the matter and pass appropriate orders as to whether the sanction sought for the scheme of amalgamation ought to be granted with or without modifications. It will be open for the learned Company Judge to re-evaluate the matter and pass appropriate orders as to whether the sanction sought for the scheme of amalgamation ought to be granted with or without modifications. The learned Company Judge will also be at liberty to call for all the records from either or both the Companies or from the Registrar of Companies, if the need so arises to satisfy itself in respect of the share exchange ratio as projected in the scheme of amalgamation. After evaluating such materials as considered necessary, the learned Company Judge will dispose of the petition after passing appropriate order. 42. Till such orders are passed by the learned Company Judge, the directions contained in the order dated 28.07.2015 passed in Company Petition No.3 of 2015 from serial Nos. i to iv will not be applicable and will not influence the further proceedings before the learned Company Judge. 43. Accordingly, the Company Appeals stand disposed of in terms of the above. 44. Registry to list this Company Petition No.3/2013 before the appropriate Bench as early as possible. 45. Interlocutory applications, if any filed in the connected Company Appeals are also stand disposed of.