TMI Blog1972 (2) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act requesting the court to issue directions for the purpose of holding a meeting of the members of the company to consider and approve the scheme providing for amalgamation. That on October 1, 1971, the said application was granted, a meeting of the members of the company was accordingly held on November 15, 1971, and the report of the chairman has been duly filed into court. Thereafter, the above petition was filed on January 3, 1972. The above matter was duly published in three newspapers, namely, The Deccan Hearld, The Indian Express and The Nav Bharath. Sri. M. Papanna, the Central Government Pleader, took notice on behalf of the Central Government on January 28, 1972. He was asked to file any representation which the Central Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( b ) of section 20 would apply, shall be sanctioned by any court or be recognised for any purpose or be given effect to unless the scheme for such merger or amalgamation has been approved by the Central Government under this Act." It was contended that, in the instant case, there was a merger or amalgamation of one undertaking to which Part "A " of Chapter III of the Act applied with another undertaking, and, therefore, the scheme should not be sanctioned by the court in the absence of the approval of the Central Government. On behalf of the company it was argued that section 23(1) would not be applicable to this case since the amalgamation or merger was not of an undertaking to which Part "A "of Chapter III of the Act applied with an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services that are rendered in India or any substantial part thereof : Provided that for the purposes of this clause, the goods produced by an undertaking 'which does not employ........" A perusal of the clauses in the Act defining the expression " under taking " and " dominant undertaking " would show that, in ordered be' either an undertaking or a dominant undertaking, an undertaking must be one which is engaged in the production, supply or distribution or control of goods of any description or provision of service of any kind or one which either by itself or along with interconnected undertakings produces, supplies, distributes or otherwise controls not less than one-third of the total goods of any description that are produced, supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any business or is not engaged in any trade or rendering any service, then it cannot come within the definition of the expression "undertaking", under the Act. It cannot also be a " dominant undertaking ". Hence, neither section 20 of the Act nor section 23(1) of the Act would be applicable to the company. Section 23(1) deals with the amalgamation or merger of an undertaking to which Part " A" of Chapter III applies with any other undertaking as defined by the Act. It does not apply to amalgamation or merger of an undertaking which is not an "undertaking " us defined in the Act with an undertaking which falls within the definition of that expression in the Act. The dictionary meaning of " undertaking " may be wider than the definition of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " in any other manner " have to be read ejusdem generis with the preceding words, namely, " issue of fresh capital " and " installation of new machinery or other equipment " appearing in section 21. Even though the activities of a company when it either merges or amalgamates itself with another company, may expand, it cannot be said that there is an expansion of an undertaking as contemplated under section 21 of the Act. Under section 21 specific cases of expansion are dealt with and those cases do not include a case of merger or amalgamation. The only cases of expansion where the previous approval of the Central Government would be necessary under section 21 are those mentioned in that section and it is not correct to bring within its s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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