1989 (11) TMI 228

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....on No. 33 of 1989 is by the transferee company, namely, Zenith Technologies Ltd. Meetings of shareholders and creditors of both the companies have been dispensed with in view of the consent letters annexed to the petitions. The official liquidator's report under section 394(1) has already been filed. There are no objections in that report. Mr. Rele, learned counsel for the Central Government, has objected to the scheme of amalgamation on the ground that the transferee company has violated section 372 of the Companies Act. (The amendment to this section has not come into operation so far). Under section 372(2), "the board of directors of the investing company shall be entitled to invest in any shares of any other body corporate up to 10% of....

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.... company substantially increased and the holding of Zenith Computers Ltd. in the transferee company was reduced to 10% of the total paid-up share capital of the transferee company. The transferee company has subsequently obtained a certificate from the Central Government dated August 25, 1989, to the effect that, "the transferee company, having complied with the requirements under section 43A(4) of the Companies Act, 1956, the name of the said company upon reconversion is on that day changed to Zenith Technologies P. Ltd". In these circumstances, it is submitted by learned counsel for the petitioners that the violation of section 372(2) by the transferee company is only technical. Looking to the above circumstances, there is force in this ....