Amalgamation approval despite pending proceedings where no legal bar to merger was shown.

Pending prosecutions and other proceedings did not bar sanction of the amalgamation, because the matters referred to in the Regional Director's affidavit were not proceedings under sections 235 to 251 of the Companies Act, 1956, and the material before the Court did not show any ground to obstruct the merger. The transferee company's status as the wholly owned parent of the transferor also supported approval, while the Regional Director did not oppose the scheme. The pending proceedings were permitted to continue in accordance with law, and relief sanctioning the merger was granted under section 391(2).

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Issues: Whether prosecutions and proceedings referred to in the Regional Director's affidavit were a bar to sanctioning the merger under section 391(2) of the Companies Act, 1956.

Analysis: The proceedings mentioned were not proceedings under sections 235 to 251 of the Companies Act, 1956. The material placed before the Court did not show that those prosecutions or proceedings should impede the amalgamation, particularly where the transferor was a wholly owned subsidiary of the transferee company. The Regional Director also did not oppose the merger in the affidavit, and the pending proceedings were left to continue in accordance with law.

Conclusion: The proceedings did not prevent grant of relief under section 391(2) of the Companies Act, 1956, and the merger was permitted.

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