TMI Blog1998 (1) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with Crompton Greaves Ltd. Final order of amalgamation was passed by the Board on 26-12-1995. Thereupon the company petition was revived on the applica-tion of the parties to the petition vide order dated 25-4-1996. C.A. No. 170 of 1994 had been filed by the respondent-company wherein Crompton Greaves Limited was permitted to be substituted in place of the respon-dent-company. The order dated 18-7-1996 passed by the Hon'ble Compa- ny Judge on C.A. No. 170 of 1994 reads as under: "After hearing counsel for the parties C.A. No. 170 of 1996 is allowed and respondent Northern Digital Exchange Ltd. is permitted to be substituted by Crompton Greaves Ltd. Reply on behalf of Crompton be now filed in CP No. 100 of 1994 within four weeks with advance copy to the counsel opposite. Adjourned to 8.8.1996." 2. After the passing of the said order the memorandum of parties was amended to incorporate the substituted company as the sole respondent Crompton Greaves Limited. Earlier a reply had been filed on behalf of the then sole respondent Northern Digital Exchanges Limited in which number of preliminary objections were taken and the alleged liability was disputed on merits as well. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely because they are in any way inter-dependent. 6. There is no dispute to the effect that first the scheme for merger was presented before the Board for Industrial and Financial Reconstruction (BIFR) of which the present petitioner had due notice. They of their own will did not object and participated in the scheme proposed before the BIFR. A conditional order of merger was passed by the Board and which on fulfilment of the conditions imposed therein was made final by holding that the merger is complete. This final order was passed by the Board on 22-4-1996, a copy of which is annexed as Annexure A-3 with C.A. No. 170 of 1996. The relevant extract of the order reads as under: "Whereas the Board vide order dated 12th December, 1995 under section 18(4) read with section 19(3) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the Act) and modified vide said order under section 18(5) of the Act, had approved amalgamation/merger of M/s. Northern Digital Exchanges Ltd. (hereinafter referred as NDDE) with M/s Crompton Greaves Ltd. (hereinafter referred as CGL) and the said amalgamation/merger was to be effective on fulfilment of the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pletely make a case of amalgamation which has the effect of the earlier company loosing its entity. The relevant portion of the order reproduced above, in any case leads, no doubt in the mind of the Court that erstwhile company having lost its entity is only operating as a division of the Crompton Greaves Limited and nothing more. 7. It may be appropriate to refer to the judgment of the Supreme Court in Saraswati Industrial Syndicate Ltd. v. CIT AIR 1991 SC 70, where the Court was directly concerned with the effects of amalgamation of one company into other. In the aforesaid case the Hon'ble Supreme Court held as under: "...But there cannot be any doubt that when two companies amalgamate and merge into one the transferor-company loses its entity as it ceases to have it business. However, their respective rights or liabilities are determined under the scheme of amalgamation but the corporate entity of the transferor-company ceases to exist with effect from the date the amalgamation is made effective. Where the company which had been allowed certain amount as trade liability in previous year was subsequently amalgamated with the assessee-company and under the terms of am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and ( 5 ) of the proceedings held before the Board dated 12-12- 1995 has contended that the present company having taken over liability of the first company and the fact that pending cases were not to be effected by the scheme of amalgamation, the proceedings have to be continued before this Court. Clauses ( 3 ) and ( 5 ) of the approved scheme of amalgamation can be reproduced herebelow: " 3. If any suit or appeal or other proceedings of whatsoever nature (hereinafter called the proceedings) by or against the transferor-company be pending, the same shall not abate, be discontinued or be in any way prejudicially affected by reason of the transfer of the undertaking of the transferor-company to the transferee-company or of anything contained in the scheme but the proceedings may be continued, prosecuted and enforced by or against the transferee-company in the same manner and to the same extent as if this scheme has not been made. 5. Subject to the other provisions contained in the scheme all lawful contracts, deeds, bonds agreements and other instruments of whatever nature to which the 'transferor-company' is a party subsisting or having effect immediately before the ama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing within the scope of the jurisdiction conferred, in respect of companies having their registered offices in the district. (2) The Central Government may, by notification in the Official Gazette and subject to such restrictions, limitations and conditions as it thinks fit, empower any District Court to exercise all or any of the jurisdiction conferred by this Act upon the Court, not being the jurisdiction conferred ( a )in respect of companies generally, by sections 237, 391, 394, 395 and 397 to 407 both inclusive; ( b )in respect of companies with a paid-up share capital of not less than one lakh of rupees, by Part ( vii ) (sections 425 to 560) and the other provisions of this Act relating to the winding up of companies. (3) For the purposes of jurisdiction to wind up companies, the expression 'registered office' means the place which has longest been the registered office of the company during the six months immediately preceding the presentation of the petition for winding up." There is no doubt to the basic fact that in the State of Punjab and Haryana jurisdiction under section 10 of the Act is exercisable only by the High Court, but it is the High Court in whose j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case. The Court in this case was concerned as to which of the Court each of the company under the scheme of amalgamation should approach. Even in this case the Court also held that the transferor-company losses its Corporate shell and thriving as a part of the larger whole. The Court in this case was largely concerned with the sanction of scheme of amalgamation presented before the Court. 14. In my humble view this judgment cannot forward the case of the petitioner any further. 15. the language of section 10 explicitly expressed that Courts where the registered office of the company is situated would be the Court having jurisdiction to entertain the petition for winding up. This clearly implies that the jurisdiction of the Court other than that is excluded. This interpretation is the only plausible interpretation and this Court would have no inherent jurisdiction to entertain and decide the petition on merits after substitution of the respondent-company specially when such substitution is in furtherance to the order of amalgamation passed under the provisions of the Sick Industrial Companies (Special Provisions) Act. 16. Equally unfounded is the plea raised on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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