Amalgamation scheme sanctioned where shareholder approval, liquidator's report, and statutory compliance satisfied Companies Act requirements.

The shareholders of the amalgamating companies approved the scheme in accordance with the directions for convening and conducting meetings. The Official Liquidator's report under the second proviso to section 394 disclosed no material suggesting that the company's affairs had been conducted prejudicially to members or public interest, and the Regional Director did not oppose the proposal. Finding compliance with sections 391 and 394 of the Companies Act, 1956, the High Court sanctioned the amalgamation scheme and allowed the company petitions.

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Issues: Whether the scheme of amalgamation between the companies was liable to be sanctioned under the Companies Act, 1956.

Analysis: The shareholders of the concerned companies had approved the amalgamation scheme in accordance with the directions issued for convening and conducting the meetings. The Official Liquidator's report, filed in compliance with the second proviso to section 394, disclosed no material showing that the affairs of the company had been conducted in a manner prejudicial to the interests of its members or the public interest. The Regional Director did not oppose the scheme, and the Court found compliance with the requirements of sections 391 and 394.

Conclusion: The scheme of amalgamation was sanctioned and both company petitions were allowed.

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