TaxTMI 
TaxTMI 
1947 (5) TMI 13
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..... On the 4th February, 1946, this Court, on its original side, made an order under section 153A of the Indian Companies Act, sanctioning a scheme of amalgamation of the Jessore Loan Company with the Bank of Calcutta Ltd., and by the same order provided for the transfer to the latter company of all the assets and liabilities of the former in accordance with the scheme of amalgamation. The order, after stating that the scheme "as set out in the Chairman's report filed herein and in the schedule hereto" was sanctioned, proceeded to state as follows:- "And it is further ordered that the whole of the undertakings, assets and all properties, movable and immovable, and liabilities of the said transferor company, Jessore Loan Company, Ltd., do vest in the Bank of Calcutta, Ltd., in accordance with the said scheme of amalgamation." The relevant clause in the schedule to the order was as follows:- "1. That all the outstanding assets of the Jessore Loan Company, Ltd., except so much as is necessary to pay out the security deposits to its employees, will vest absolutely in the Bank o( Calcutta, Ltd., on and from the 30th day from the filing of the sanctioned scheme with the Registr....
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....y under a scheme of amalgamation could not be said to be a transfer "by operation of law" and in support of his contention relied upon the decisions in Mahadeo Baburao Ealbe v. Anandrao Shankarrao Deshmukh [1933] ILR 57 Bom. 513 and Mathurapore Zamindary Company, Ltd. v. Bhasaram Mandal [1924] ILR 51 Cal. 703. The contention of the appellants is founded on the proviso to Order 21, rule 16, of the Civil Procedure Code. The rule provides that where the interest of any decree-holder in a decree is transferred by assignment in writing or by operation of law, the transferee may apply for the execution of the decree. Then comes the proviso which, as amended by the Calcutta High Court, reads as follows:- "Provided that, where the decree, or such interest as aforesaid, has been transferred by assignment, notice of such application shall be given to the transferor and judgment-debtor, and until the Court has heard their objections (if any) the decree shall not be executed provided that if, with the application for execution, an affidavit by the transferor admitting the transfer or an instrument of transfer duly registered be filed, the Court may proceed with the execution of the decre....
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....pointed out first that a verification is not an affidavit; and, in any event, we dissent altogether from the proposition that an affidavit by the Bank of Calcutta could be treated as an "affidavit by the transferor" within the meaning of the proviso to Order 21, rule 16. A rule devised to give an opportunity to the alleged transferor to admit or deny the transfer obviously contemplates the duality of the transferor and the transferee and a statement by the transferee company, even it had absorbed the transferor, could not possibly do duty for a statement by the latter. We may add that under the terms of the High Court's order, although the assets of the Jessore Loan Company would vest in the Bank of Calcutta on and from the 30th day of the filing of the scheme with the Registrar of Joint Stock Companies, the former company would be dissolved and cease to exist only after its share-holders had been allotted shares in the latter company. There is no evidence when such allotment took place and thus no evidence when the Jessore Company as a separate entity, ceased to exist. The learned Advocate for the respondent also contended that since Order 21, rule 16, required notice to be giv....
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....erved that up till then, the compromise or arrangement has only been proposed. The second condition is that it is shown that "under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred to as the 'transferor company') is to be transferred to another company (in this section referred to as 'the transferee company')." It is again to be observed that up till then the property is only to be transferred. There is yet no completed transfer. The section goes on to say that if the conditions mentioned above are satisfied, the Court may, by its order sanctioning the scheme or a further order, provide inter alia for "(a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company." It is to be observed that the section does not merely say, as does Order 23, rule 3, Civil Procedure Code, in the case of compromises of suits, that the Court "shall order such agreement, compromise or satisfaction to be recorded and shall pass a decree in accordance therewith", but directs the making a further order by the Court on its own account....