Amalgamation scheme approved where shareholder consent and accountant-fixed share exchange ratio showed no prejudice to public or shareholders.

Sanction for a proposed amalgamation scheme was found appropriate where more than three-fourths of the shareholders present approved the arrangement, and the share exchange ratio had been fixed by chartered accountants. The objections raised did not establish that the ratio was unfair or that the scheme was prejudicial to the public interest or to the interests of shareholders. On that basis, the scheme of amalgamation was sanctioned.

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Issues: Whether sanction under section 394 of the Companies Act, 1956 could be granted for the proposed scheme of amalgamation, and whether the scheme, including the exchange ratio of shares, was prejudicial to the interests of the public or the shareholders.

Analysis: The scheme had been approved by more than three-fourths of the shareholders present in the meeting. The exchange ratio had been fixed by chartered accountants, and no material objection established that the ratio was unfair. The objections raised did not show that the scheme was prejudicial or detrimental to the public interest or to the interests of the shareholders.

Conclusion: The scheme of amalgamation was sanctioned.

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