Heard Mr. Bhatt for the appellants in both the appeals. Mr. Master is present for the Regional Director, Department of Company Affairs.
2.Both the appeals are filed against the order passed by the learned single Judge on January 23, 2003, rejecting the Company Applications Nos.428 and 429 of 2002. Application No.428 of 2002 sought merger of Programme Asia Trading Co. Ltd. into Zee Telefilms Ltd. Application No.429 of 2002 was the application of the transferee company.
3.The learned single Judge heard both the applications, perused the affidavit filed by the Regional Director. The affidavit referred to certain prosecutions under sections 217(5), 212(9), 209(5), 307(7) and 211(7) of the Companies Act. The learned Judge therefore formed an opinion that this was not a matter wherein leave under section 391 could be granted. It is this order which is challenged in these appeals.
4.Mr. Bhatt, counsel for the appellants points out that firstly, the proviso to section 391(2) speaks of investigation proceedings in relation to the company under sections 235 to 251 of the Companies Act. These proceedings were not under those sections. That apart an additional affidavit has also been filed to place on record as to what those prosecutions/ proceedings are. We have gone through these papers. We do not find that these are proceedings which should stall in any manner the merger of Programme Asia Trading Co. Ltd. into Zee Telefilms Ltd. This is particularly so when the transferor company is a fully owned subsidiary company of the transferee company. Mr. Master has pointed out that the provisions of the proviso to section 391(2) are illustrative one and not exhaustive. In any case, what is material to note is that having drawn the attention of the court to the proceedings initiated against the companies, the Regional Director also in his affidavit did not object to the merger of the transferor company into the transferee company. It is needless to say that those proceedings will continue in accordance with law.
5.In the circumstances, we allow both the appeals and set aside the impugned order passed by the learned single Judge. Consequently, Company Application No.1115 of 2002 will stand allowed in terms of prayer clauses (a) to (f) and Company Application No.1116 of 2002 will stand allowed in terms of prayer clauses (a) to (g).
6.The transferee company will make the usual payment to the Regional Director as also to the official liquidator.