Amalgamation scheme sanction upheld where shareholder approval and no public prejudice supported retrospective operation from 1 April 1995.

A scheme of amalgamation under sections 391(2) and 394 of the Companies Act, 1956 was sanctioned where shareholders and creditors of both companies had approved it, and the Official Liquidator and Central Government reported no prejudice to members or the public interest. The objection that the scheme could not take effect from 1 April 1995 because audited balance sheets for the year ended 31 March 1995 were unavailable was rejected, since those accounts could not have been available when the proposal was considered. The scheme was therefore sanctioned to operate from 1 April 1995.

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Issues: Whether the scheme of amalgamation of the two companies should be sanctioned under sections 391(2) and 394 of the Companies Act, 1956, and whether the scheme could be made operative from 1 April 1995.

Analysis: The scheme had been approved by the shareholders and creditors of both companies. The Official Liquidator and the Central Government reported no prejudice to the interests of members or the public interest. The objection that the scheme could not operate from 1 April 1995 for want of audited balance sheets for the period ending 31 March 1995 was not found to have merit, as those accounts could not have been available when the proposal was placed for consideration.

Conclusion: The scheme of amalgamation was sanctioned, and it was directed to operate with effect from 1 April 1995.

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