TaxTMI 
TaxTMI 
1999 (2) TMI 478
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....ns of sections 391 and 394 of the Companies Act, 1956 (hereinafter referred to as "the Act"). The scheme of arrangement proposed provided that as a measure of corporate reconstruction and to provide the base for further growth and with an object to carry on the business with focused attention and more profitably, it was decided to transfer the unit of Sunbeam Castings of M/s. Highway Cycle Industries Limited (hereinafter referred to as "the transferor-company") to M/s. Sunbeam Auto Limited, a growing concern (hereinafter referred to as the "transferee-company"). The detailed terms and conditions of the proposal were specified in annexures E/5 to the respective petitions. In accordance with the order dated October 3, 1996, the transferor and....
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.... both the petitions of Shri S.B. Mal-har, Regional Director (Northern Region), Department of Company Affairs, Kanpur, has also been filed. It has been stated by the Regional Director that the affairs of the company do not appear to have been conducted in a manner prejudicial to the interests of the members or to public interest. It has further been suggested in the affidavit that proportionate equity shares be allotted by the transferee-company to the transferor-company while making transfer of the unit. However, in the meeting of the creditors and shareholders of the company the proposed scheme was approved unanimously. The relevant extract of the chairman's report as annexed to Company Petition No. 112 of 1996, reads as under : "That the....
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....at internal management and running of the business is primarily a matter which falls in the domain of management for internal affairs of the company. Unless and until such scheme is impermissible in law or bad in law and/or opposed to public policies, the court would not interfere in sanctioning of such scheme. It has been certified that the proposed scheme is not opposed to public policy and does not offend the interests of the shareholders/members/creditors of the company and that it is not opposed to the public at large. Growth, expansion and profitability appear to be the objects of both the companies without infringing the rights of all concerned. The function of the court while considering the scheme within the purview of sections 39....