Amalgamation of foreign company undertaking: jurisdiction upheld, restoration treated as continuous existence, and fraud-based recall refused.

The Bombay High Court considered whether sanction of an amalgamation involving the Indian undertaking of a foreign company was without jurisdiction or a nullity, and whether the scheme could be recalled for alleged fraud based on the foreign company being struck off. It held that the Companies Act, 1956 permitted such an amalgamation structure, including a foreign body corporate as transferor, and that restoration of the foreign company treated it as never having been struck off. The court also found no strict proof of intentional suppression or fraud. The sanction order therefore remained within jurisdiction, was not a nullity, and was not liable to recall.

---

---

Issues: (i) Whether the order sanctioning amalgamation of the Indian undertaking of a foreign company with an Indian company was without jurisdiction or a nullity; (ii) Whether the sanction order could be recalled on the ground of alleged fraud and suppression concerning the foreign company being struck off from the register.

Issue (i): Whether the order sanctioning amalgamation of the Indian undertaking of a foreign company with an Indian company was without jurisdiction or a nullity.

Analysis: The special scheme provisions governing amalgamation permitted a transferor company to include a body corporate incorporated outside India, while the transferee company had to be a company within the Act. The foreign company was treated as capable of being wound up as an unregistered company, and section 584 of the Companies Act, 1956 did not restrict the court's jurisdiction to sanction amalgamation of its Indian undertaking. The restoration of the foreign company to the register had the statutory effect of treating it as never having been struck off, and the distinction between the appointed date and the effective date meant that prior incorporation of the transferee company did not invalidate the scheme.

Conclusion: The sanction order was within jurisdiction and was not a nullity.

Issue (ii): Whether the sanction order could be recalled on the ground of alleged fraud and suppression concerning the foreign company being struck off from the register.

Analysis: The burden to establish fraud lay on the applicants. The record did not establish intentional suppression sufficient to vitiate the order, and the subsequent restoration of the foreign company reinforced the legal assumption of its continuous existence. No material was shown to justify recalling the sanction order on fraud grounds.

Conclusion: The allegation of fraud was not proved and no recall was warranted.

Final Conclusion: The application challenging the sanction of amalgamation failed in its entirety and the earlier order remained effective and valid.

Ratio Decidendi: In an amalgamation of an Indian undertaking of a foreign body corporate, the court's jurisdiction under the Companies Act, 1956 is not defeated by the foreign company having been struck off abroad where restoration operates to treat it as continuously existing, and a sanctioned scheme is not liable to be recalled absent strict proof of fraud.

---