ORDER Sunil Ambwani, J.
1. This company application by summons as provided in Rule 67 of the Companies (Court) Rules, 1959 was filed under Section 391/394 of the Companies Act, 1956 jointly by Juggilal Kamlapat Holding Ltd., having its registered office at Kamal Tower, Kanpur-208001 (hereinafter referred to as 'the transferee company') J.K. Investment Ltd., having registered office at Kamla Tower, Kanpur-208001 (hereinafter also referred to as the 'die transferor company No. 1') and Kanpur Investments Ltd., having its registered office at Kamla Tower, Kanpur-208001 (hereinafter also referred to as 'the transferor company No. 2') to approve the scheme of amalgamation for the amalgamation of the transferor company No. 1 (J.K. Investment Ltd.) and the transferor company No: 2 (Kanpur Investments Ltd.) with the transferee company (Juggilal Kamlapat Holding Ltd.).
2. Upon hearing the company petition this Court by its order dated 23.5.2005 directed to advertise the petition - in Hindustan Times published from Lucknow, 'Times of India' published from New Delhi and Dainik Jagarn in Hindi Kanpur Nagar.
3. The office reports that the advertisement have been carried out fixing 18.8.2005 and that today is the adjourned date for hearing of the petition.
4. From the report of the Shri Manoj Misra, Chairman of the meeting, I find that the meeting of equity shareholders of the Jhuggilal Kamlapat Holding Ltd. (transferror company) was attended by shareholders representing 100 per cent of the total voting strength of shareholders. The meeting of shareholder of J.K. Investment Ltd. (transferor company No. 1) was attended by shareholders representing 99.90 per cent with total voting strength and the meeting of equity shareholders of Kanpur Investment Ltd. (transferor company No. 2) was attended by shareholders representing 99.90 per cent of the total voting strength; and that in all these three meetings the following resolution as unanimously passed--
"RESOLVED that the scheme of amalgamation of J.K. Investment Ltd. and Kanpur Investments Ltd. with Juggilal Kamlapat Holding Ltd., which was circulated to the members along with the notice of the meeting and a copy of which has also been placed before this meeting and signed for identification by the Chairman hereof, be and the same is hereby approved and agreed to without any modification."
5. The company does not have any creditors and thus meetings of creditors were dispensed with.
6. Heard Sri R.P. Agarwal, learned Counsel for the applicant companies, and Sri S.K. Saxena, Official Liquidator, UP., at Allahabad and Uttaranchal. Sri S.K. Saxena has filed his report No. 110/2003 dated 18.8.2003. In his report he submits that the Company Secretary and the auditor of the' company attended his office on 9.8.2003 and produced their relevant books of accounts for scrutiny under Section 394 of the Companies Act, 1956. The statutory references were found to be in order. The Official Liquidator, however, objected that in all the meetings, Sri Anil Kamthan was shown as Company Secretary whereas he is also one of the directors on the board of the company. He got an assurance that both the designation as director and Company Secretary will be disclosed in the meetings in future. No other discrepancies were found in the opinion of the Official Liquidator. The scrutiny of books and papers of transferor company shows that its affairs have not been conducted in a manner prejudicial to the interest of the members of the company.
7. In the affidavit of Sri U.C. Nahta, Regional Director, Northern Region, Ministry of Company Affairs, it is pointed out, in para 4 and 4.1, that para 8(c) of the scheme of amalgamation provides that the authorised share capital of the transferee's capital shall automatically stand increased by addition of authorised share capital of the transferor companies, without any payment of fees to Register of Companies in such case. He submits that this could only be done after following procedure prescribed under the relevant provisions of the Companies Act, 1956 and payment of requisite fees to the Registrar of Companies and stamp duty to the State Government.
8. Sri R.P. Agarwal, learned Counsel for the applicant, submits that this objection is not correctly taken. According to him, Section 97 of the Companies Act, 1956 provides for notice of increase of shareholder's capital and authorised capital to be filed by the Registrar (within] thirty days after passing of the resolution authorising the case and the Registrar has to record the entries and to make alteration which may be necessary in the memorandum of articles.
9. Where both the transferor companies and the transferee company have paid the prescribed fees of their respective authorised share capital and by virtue of amalgamation-it stands increased to the combined shareholding, no further fees or stamp duty is payable. The equity shareholders of all the companies have passed the resolution to approve the scheme and as such, requirement of Section 97 have been complied with. He has also relied upon a judgment of this Court in Jaypee Cement Ltd, In re (2004) 2 Comp LJ 105 (All): (2004) 122 Comp Gas 854 in which it was held as follows (paras 40-44 at pages 121-122 of Comp LJ):
"40. The second objection of the Central Government is with regard to another condition mentioned in para 4.03(ii) of the scheme which provides that upon the merger-authorised share capital of JPI shall stand combined with the authorised share capital of JPC. According to the Regional Director, this amounts to increase of the authorised capital of JPC, which cannot be done without paying the requisite fee/stamp duly to the Government. In reply to, this objection, it was submitted on behalf of JPC that the fee/stamp duty is nominal and has a maximum limit which the JPC is prepared to pay. But, it was submitted that the requisite fee has already been paid on the authorised capital of JPI and merely because of its merger with JPC, there is no reason why the same fee should be paid again by JPC on the same authorised capital. ,
41. The submission has force and no good reason has been shown why the two merged companies should be required to pay duty again on the same authorized capital on which duty has already been paid by the JPI.
42. Regarding the increase of authorised share capital by merger of the 'authorised capitals of the two companies, an order can be passed under Section 391 of the Companies Act itself. This has been laid down by the Bombay High Court in the case of Vasant Investment Corporation Ltd. v Official Liquidator, Colaba Land and Mills Co. Ltd. (1981) 51 Comp Cas 20 (at page 35). The relevant part of the judgment is reproduced below:
"The whole purpose of Section 391 is to reconstitute the company without the company being required to make a number of applications under the Companies Act for various alterations which may be required in its Memorandum and articles of association for functioning as a reconstituted company under the scheme (vide Maneckchowk and Ahmedabad Manufacturing Co. Ltd., In re (1970) 2 Comp LJ 300 (Guj): (1970) 40 Comp Cas 818 (Guj). The company is, therefore, not required to make a separate application under the Companies Act for alternation of its memorandum of association to show the new share capital. Such an alteration can be sanctioned under the scheme itself."
43. A similar view has been taken by the Bombay High Court in the case of PMP Auto Industries Ltd., In re (1995) 5 Comp Lj (Bom): (1994) 80 Camp. Cas 289 (Born) (at pages 295, 296) and by the Gujarat high Court Maneckchowk and Ahmedabad Manufacturing Co. Ltd., In re (1970) 2 Comp Lj 300 (Guj): (1970) 40 Comp Cas 819 (Guj) (at page 854).
44. Therefore, both the objections; of the Regional Director, Northern Region, Department of Company Affairs, Kanpur, are overruled."
10. In view of the aforesaid legal position, the objection of the Regional Director is not tenable and I hold that since the combined authorised capital does not exceed the authorised capital of all the three companies, no further fees or stamp duty is required to be paid.
11. No objection is taken by any person to the scheme of amalgamation.
12. The company petition No. 17 of 2005 in company application No. 1/2005 under Section 391/394 is consequently allowed. The scheme of amalgamation stands confirmed by the court. Let the formal order be prepared by the office within two weeks and filed before the Registrar of Companies within the statutory period as consequence to the confirmation of the scheme of amalgamation and its approval by the board. Both the transferor companies shall stand dissolved without any order of winding-up to be made by the court and its assets and liabilities shall stand transferred to the transferee company with effect from the appointed date given in the scheme.