JUDGMENT
A.H. Qureshi, J.
1. This petition is filed by the petitioner company which is incorporated under the Companies Act, 1956, and has its registered office at Wadi Wadi, Baroda, for granting sanction to the amalgamation of the petitioner company with the two respondent companies. Both the respondent companies are registered under the Companies Act, 1956, and have their registered offices at Ballard Estate, Bombay. The respondent companies are registered at Bombay and hence they are within the jurisdiction of the High Court of Judicature at Bombay. An application for granting sanction to the amalgamation was filed by and on behalf of the respondent companies at Bombay. The High Court at Bombay, by its order dated July 11, 1984, granted the sanction to the respondent companies to amalgamate with the present petitioner company. The certified copies of the two judgments and orders of the High Court at Bombay granting such permission are on the record of this case. The petitioner company being within the jurisdiction of this court, the present petition is filed in this court for granting sanction for amalgamation.
2. Public notices were issued as per the requirement of law. The only objection filed is by a shareholder, Shri N. G. Shodhan. He has also filed a company application which is heard and is being disposed of together with the present company petition.
3. Mr. B. R. Shah, learned counsel for the petitioner company, has stated that the two respondent companies are the sister concerns of the petitioner company, and that the objective in bringing about the amalgamation is to improve the business and to bring the companies’ assets to be amalgamated into a single, strong and viable unit. The reasons for amalgamation are more elaborately set out in the petition. Mr. B. R. Shah has urged that the respondent companies by themselves could not have run their undertaking producing consumer goods such as vitamins, fine chemical, synthetic detergents, soaps, cosmetics, toileteries, chemicals, petro-chemicals, agro-chemicals, dyestuffs, machinery and equipment, electronic equipment, computers and computer peripherals, etc., very efficiently and economically so as to be successful in the competitive market. With a view to re-organise the undertakings and to make them more economical, effective and competitive, it was thought necessary and proper to amalgamate the petitioner with the two respondent companies.
4. Mr. B. R. Shah has pointed out that in the course of re-organisation of its business, respondent No. 1 company transferred its business and undertaking as a going concern to its wholly owned subsidiary company called Ofisade Private Limited on the close of business on February 28, 1977, together with all the assets and properties including leasehold rights in the land and buildings owned and possessed by respondent No. 1 company at their respective book value. Mr. B. R. Shah has also pointed out that respondent No. 2 company had earlier also transferred its business undertaking as a going concern to its holding company called Ofisade P. Ltd. on the close of business on February 28, 1977, together with all the assets and properties including lands and buildings owned and possessed by respondent No. 2 company. Thus, according to Mr. B. R. Shah, we two respondent companies have transferred all their business and undertakings to the petitioner company and hence their present existence is only a nominal one. However, according to Mr. B. R. Shah, the respondent companies have considerable assets, though they have no business or any other commercial activity. He, therefore, submits that in the fitness of things, it would be proper for the respondent companies to amalgamate with the petitioner company to wipe out their nominal existence and merge into a larger body, that is, the present petitioner company. Mr. B. R. Shah has also urged that the assets of the respondent companies are of much greater value that their book value. But, as it is an amalgamation of sister concerns, the assets of the respondent companies are of brought into the petitioner company at their book value. At this point, it would be proper to consider the objections of Mr. Shodhan, who has urged that it is not correct to say that the assets of the respondent companies have a higher market value than the book value. According to him, the assets of the respondent companies in practical terms have no value at all because the lands owned and possessed by the said companies are governed by the provisions of the Urban Land Ceiling Act and, therefore, they can not be sold or transferred in any manner whatsoever. According to Mr. Shodhan is not sold and must be rejected. It may be pointed out that the lands belonging to the respondent companies are not mere vacant lands. They form part of properties which have building and constructions thereon. Merely because the open lands are governed by the provisions of the Urban Land Ceiling Act, it cannot be said that they have no market value at all. Restriction on transfer does not make a property valueless, especially when there are buildings and constructions on it to which the provisions of the Urban Land Ceiling Act do not apply. The argument that the property is inalienable and is hence without value fails and deserves to be rejected.
5. Mr. B. R. Shah has further pointed out that in fact the amalgamation would result in the better utilisation of the said lands and buildings belonging to the respondent companies and would facilitate the future expansion if and when the same becomes necessary and feasible. Mr. B. R. Shah has been at some pains to explain that the petitioner company would benefit considerably on account of the valuable lands and buildings of the respondent companies transferred to the petitioner company at its book value. There is considerable force in this argument. The lands and buildings of the respondent companies are quite large and their existing as well as potential value can be taken to be very much higher than the book value.
6. The next point urged by Mr. V. R. Shah is that although the respondent companies were doing reasonably good business, they had some financial difficulties and, therefore, they had to seek assistance from the sister concerns, viz., Ofisade P. Ltd. and Ambarnath Investment Co. In the circumstances of the cases according to Mr. B. R. Shah, it was proper that instead of running several enterprises separately, they should be brought under a single roof and to have a unified management to make it more viable and to be able to stand on its own in the competitive market. Mr. Shodhan has urged that the amalgamation is not in the interest of either the petitioner company or the respondent companies because, according to him the petitioner company or the respondent companies because, according to him, the petitioner company itself is not in a very sound economic condition to enable it to take over the two respondent companies which are economically even weaker. The result would be that the position of all the three would become precarious. Mr. Shodhan’s argument that the respondent companies were not in an economically sound position when they transferred their undertakings in 1977 is based on the assumption that the respondent companies having handed over their business and undertakings were of no consequence and hence they ought to be treated as financially unsound, is not tenable. Mr. B. R. Shah has in this context referred to the financial condition of the respondent companies at the time of their undertakings being transferred in 1977. After going through all the details on the record of this case, it becomes clear that the respondent companies in 197 were economically quite sound. There is no reason to believe that by the amalgamation, the petitioner company was taking over liabilities without any assets or with assets which have no market value.
7. Mr. B. R. Shah has also emphasised the fact that the High Court at Bombay while hearing the applications of the present respondent companies had considered the soundness of the proposal for amalgamation and had come to the conclusion that the amalgamation was justified and, hence, the sanction has been granted. Mr. B. R. Shah conceded that while the sanction granted by the High Court at Bombay could be considered as one of the relevant factors, this court has to arrive at its own decision as regards granting sanction to the amalgamation proposal or refusing it. Mr. Shodhan has argued that very important points were not urged before the High Court Bombay, viz., that the assets of the respondent companies had no market value and that the financial condition of all the three companies was not very sound. Hence, according to Mr. Shodhan, the High Court at Bombay granted sanction for amalgamation erroneously because the correct financial condition of the companies was not disclosed. This submission of Mr. Shodhan also cannot be accepted. His basic contention that the assets of the respondent companies have no value is rejected by this court. Hence, it makes no difference whether such an averment was or was not made before the High court at Bombay. Although this court would take into consideration the fact that the respondent companies applications for amalgamation have been sanctioned by the High court at Bombay, this court is bound to arrive at its own conclusion as to whether such an amalgamation should or should not be sanctioned by this court at the instance of the petitioner company. Having considered the different aspects involved in this matter, this court has come to the conclusion that the proposal of amalgamation is a sound proposition and there is no reason to reject the application for amalgamation on the ground that it adversely affects the rights of shareholders, creditors or other persons concerned with the companies. So long as there is no infringement of any provision of law and so long as the proposal is a bona fide one, whether it makes economically sound sense or not is a question where the court would rely on the opinion or sound calculation of those who have to run their business or undertaking. It would not be fair or proper for this court to substitute its own view with regard to economic soundness of an undertaking in the absence of any contravention of any legal provision or obvious infringement of the rights of the parties concerned.
8. In his company application, Mr. Shodhan has raise a number of objections and urged that the proposed amalgamation should not be sanctioned by this court. Mr. Shodhan has urged that there has been nondisclosure of important facts before the board of directors, shareholders and even before this court. According to him, the non-disclosure is that the assets of the respondent companies have no value and that the petitioner company is taking over the liabilities without any meaningful assets. This submission of Mr. Shodhan also deserves to be rejected because it proceeds on the wrong premise that the respondent companies assets have no value. The next contention of Mr. Shodhan is that there is non-application of mind by the board of directors as well as the share holders to the proposal of amalgamation. According to him if there was a proper application of mind, neither the board of directors nor the share holders to the proposal of amalgamation. According to him if there was a proper application of mind, neither the board of directors not the share-holders would have approved of the amalgamation. Here again, Mr. Shodhan is wrong. If the board of directors or the shareholders do not agree with the view of Mr. Shodhan, it does not make it a case of non-application of mind. Another contention of Mr. Shodhan is that special notice of the resolution for amalgamation should have been given and that the notice should have contained the proposed resolution verbatim. Mr. B. R. Shah has pointed out that for passing a amalgamation resolution, special notice is not required under the provisions of the Companies Act. He has also pointed out that there is no provision in the Act which requires the resolution to be set out in the special notice. Mr. B. R. Shah has also pointed out that although there is no legal requirement, the company has in fact circulated a draft resolution with the notice and the resolution actually passed is identical with the draft resolution circulated. Hence this contention of Mr. Shodhan also falls through.
9. The next contention is that the proposed amalgamation is not in the interest of either the respondent companies or the petitioner company. As pointed out earlier, this is a matter which has to be decided by the respective boards of directors and shareholders of the companies amalgamating. In this case the respective board of directors as well as the shareholders have approved of the amalgamation and therefore, it is not open to any dissident shareholder to say that it is not in the interest of the company. It must be presumed that the board of directors and the shareholders know what is in the interest of the company and what is not. A few more grounds of objection to granting the sanction are that the proposal is not prudent, it is against commercial morality, it is not necessary, but all these contentions are equally untenable. However, Mr. Shodhan has urged that the proposal for the amalgamation is for an ulterior purpose and the for the benefit of one of the directors. Here again, no case is made out to show how it would benefit one director or shareholder to the exclusion of the other members of the company. The company may benefit or suffer loss as a whole, but it is difficult to imagine how one director or some directors or some shareholders can benefit to the exclusion of others. It must be remembered that a corporate body has its own independent entity which is different from that of a director or a share holder. If there is any benefit or loss, it would affect the entire company and not any particular director or a shareholder. Thus, there is no substance in this objection also.
10. Mr. Shodhan has next urged that the respondent companies have heavy existing tax liabilities and, therefore, the petitioner company would be saddled with the burden of meeting the tax liabilities of the respondent companies. Prima facie, this is a point which needs to be considered carefully. Mr. B. R. Shah has pointed out that although there were heavy existing tax liabilities and, therefore, the petitioner company would be saddled with the burden of meeting the tax liabilities of the respondent companies. Prima facie, this is a point which needs to be considered careful. Mr. B. R. Shah has pointed out that although there were have tax liabilities of the respondent companies, substantial provision had been made to meet those liabilities and in fact a large part of these tax liabilities are already discharged. According to Mr. B. R. Shah, these liabilities are such that they can be comfortably met with the assets in hand. The details of the tax liabilities, including those which are already met and those which are yet to be met, are set out in extenso and are part of the record, even with the existing liabilities, the amalgamation proposal does not appear to be either unsound or fundamentally objectionable.
11. Mr. S. R. Shah, learned standing Counsel for the Central Government, has urged that while the Central government has no objection to the sanction for amalgamation being granted, it has to be subject to the provisions of the Monopolies and Restrictive Trade Practices Act, 1969. Mr. S. R. Shah had not filed any affidavit on behalf of the Central Government. However, this court directed him to file an affidavit and to disclose as to whether the Central government considers that its prior permission is necessary under the provisions of the Monopolies and Restrictive Trade Practices Act. Mr. S. R. Shah has filed an affidavit on behalf of the Central government and urged that under the provisions of section 23(1)(a), the petitioner company would be required to obtain the prior permission of the Central Government for the amalgamation. Mr. S. R. Shah has also urged that the respondent companies have been dealing with their shares, debentures, etc., in a manner which would indicate that it was a part of its business activity to invest in shares debentures etc., of other companies. He has cited the instance of the respondent companies dealings with ofisade Pvt. Ltd. and Ambarnath Investment Co. to which a large number of the shares of respondent companies were transferred. He has also pointed out that there have been transfer of shares at a lesser value than the par value and in the process transfer of shares at a lesser value than the par value and in the process losses have been incurred. Mr. S. R. Shah therefore urged that this should be regarded as part of the business activity of the respondent companies. These transfers of shares amounted to investment and, therefore the respondent companies should be considered as investment companies. Hence, they would be governed by the provisions of the Monopolies and Restrictive Trade Practices Act. Therefore according to him prior permission of the Central Government for amalgamation is necessary. In this case no such prior permission is obtained. Hence, according to Mr. S. R. Shah the proposed amalgamation should not be sanctioned.
12. Mr. B. R. Shah for the petitioner company has met this argument by showing that the dealings of the respondent companies are not a part of their business activity but they were only part of the financial arrangements arrive at with the sister concerns so as to meet the exigencies of financial needs from time to time. Mr. B. R. Shah has also urged that there is no definition of “investment company” in the Monopolies and Restrictive Trade Practices Act. But there is a provision the if any term is not defined in the Monopolies and Restrictive Trade Practices Act the definition given in the Companies Act may be resorted to. Hence Mr. B. R. Shah has relied on the definition of “investment company” given in section 382 and 91 proviso. Although strictly this may not be considered to be a definition the proviso does refer to a company whose principal business is acquisition of shares, stocks debentures or other securities as an investment company. Mr. B. R. Shah has emphasised that the said definition requires that the acquisition of shares, stocks debentures etc., must be the principal business and not a mere activity incidental to its main commercial activity. According to Mr. B. R. Shah the principal business of the two respondent companies was to produce consumer goods and not to engage in the business of acquisition of shares debentures etc. This submission or Mr. B. R. Shah is correct and must be accepted. In the fact and circumstances of the case and especially after going through the detailed records it cannot be said that the principal business of the respondent companies was to acquire shares stocks, debentures etc. It must be borne in mind that the dealings by the respondent companies have been a solitary case of respondent No. 1 company having acquired shares in its sister concern the Ofisade Pvt. Ltd. and respondent No. 2 company in Ambarnath Investment Co. Besides this there is no question of any share stocks debentures of other securities having been acquired or transferred in any other company. There is no doubt that there is an investment in an overseas company called Malaysia. Co. There again the investment was in a sister concern with the permission of the Central Government. This also would not make it principal business as one of buying and selling shares, debentures etc. to make the respondent company an investment company. Therefore the submission the submission of Mr. B. R. Shah cannot (SIC) be accepted.
13. The second submission of Mr. B. R. Shah is that the definition of the word “undertaking ” in the Monopolies and Restrictive Trade Practices Act has been amended to mean and include not only the activity of the company in presenti but also such an activity in the past or in future. According to Mr. B. R. Shah the respondent companies were undertakings within the meaning of the amended definition of the word “undertaking” in the Monopolies and Restrictive Trade Practices Act in the past although they have ceased to have that business activity after the amalgamation in 1977. Yet, under the amended definition it should be regarded as an undertaking and hence permission of the Central Government is necessary under section 23 of the Monopolies and Restrictive Trade Practices Act. It is true that the amended definition of “undertaking” does take within its purview not only the present activity but also such an activity in the past as well as in future. By the use of the words “is, or has been or is proposed to be”, the Legislature has brought within the net the enterprises which existed in the past but have ceased to be in existence at present. The use of the word “has been” suggest that it does not refer merely to the past but has a reference to the present as well as the future. Mr. S. R. Shah has relied on the judgment in Chandra Mohan v. State of U. P., AIR 1969 All 230, to show that “has been” does not necessarily mean the present or the future. He has also submitted that the use of the word “has been” must be construed to mean not only “was” but also to mean that it may relate to the revival of existence which may come about in future. As against this, Mr. K. N. Raval, learned counsel for respondents Nos. 1 and 2 companies, has urged that the words “has been” should be construed to mean that it not only existed in the past but also it continues to do so now. Mere past existence is not sufficient if it is not in existence today. He, therefore, urges that the respondent companies having transferred their undertakings as far back as in 1977, they are not covered by the amended definition. According to Mr. Raval, the respondent companies have a mere corporate existence without any undertaking. Hence, no permission of the Central Government is necessary under section 23 of the Monopolies and Restrictive Trade Practices Act. On a plain reading of sub-section (1) of section 23, it is quite clear that any scheme of amalgamation of an undertaking to which this Part applies with any other undertaking requires the approval of the Central Government. The word “undertaking”, as defined in the Monopolies and Restrictive Trade Practices Act, after the amendment of 1984, contemplated an enterprise which is in existence or which was in existence or which may come into existence in future. It is pertinent to note that the definition, as it existed prior to the 1984 amendment, included only the enterprises which were already in existence. It did not include the enterprises which existed in the past or those which may come into being in the future. The express purpose of the Legislature in amending the definition of the word “undertaking” is to net in the enterprises which existed in the past or which may come into being in the future. It is difficult to uphold the contention that the enterprises which existed in the past but do not exist today would not be covered by the amended definition. The past existence cannot be held to be dependent on the present existence because, then the past becomes redundant. The present existence would be sufficient to come within the mischief of the Act. In that case, no reference to the past existence would at all be necessary. Since the intention of the Legislature is clearly to cover the past, present and future activity, in the amended definition, each must stand on its own unrelated to one another. For giving a definite meaning to the legislature provision, there should; be no ambiguity or uncertainty. Hence, it is held that under the amended definition, any enterprise which existed in the past and which has ceased to exist today and is not likely to come into existence in future would also be covered. Thus, the undertakings of the respondent companies would be covered under the amended definition of the word “undertaking” in the Monopolies and Restrictive Trade Practices Act.
14. The contention of Mr. Raval that even if the enterprise of the respondent companies are held to be undertaking within the meaning of the amended definition, even so section 23 of the Monopolies and Restrictive Trade Practices Act would not be attracted because what is sought to be amalgamated of undertakings but the companies which have no undertakings after 1977. In other words, Mr. Raval submits that there is no amalgamation of undertaking but the amalgamation of the companies under the provisions of the Companies Act. This submission of Mr. Raval cannot be accepted once it is held that the “undertaking” means the enterprise which existed in the past. No doubt what is sought at present is the amalgamation of the petitioner company and the respondent companies which have only a corporate existence without business activity but the respondent companies had the undertaking in the past and, therefore, under the amended definition, it must be held that it is covered by section 23 of the Monopolies and Restrictive Trade Practices Act and hence does not apply to the present case. Mr. S. R. Shah argued that the amendment of the definition of “undertaking” is declaratory in nature and, therefore, it should be given retrospective effect. He has relied on a Full Bench judgment of the Kerala High Court in Narayana Pattar v. State of Kerala, AIR 1979 Ker 139, wherein it is held (headnote) :
“Where a statutory provision is in its nature declaratory, it will be presumed to be retrospective unless a contrary intention is clearly indicated by the Legislature, the reason being that its underlying purpose of explaining or clarifying the existing law will be effectively served only by giving it such a retrospective construction. ”
15. Mr. B. R. Shah has urged that the amendment of the definition of the word “undertaking” is not merely a declaratory one but it would be substantive in as much as the companies which were previously not within the definition of the word “undertaking” have been brought within the purview of the amended definition. Hence, new liabilities are cast on the companies which were previously not covered within the meaning of the word ” undertaking “. This submission of Mr. B. R. Shah cannot be accepted. The definition would necessarily be declaratory in nature. It cannot be considered to be substantive merely because the companies which were not formerly within the definition have been brought in. Of course, a wider definition would necessarily affect someone or the other That would not make it a substantive provision. Hence, the submission of Mr. S. R. Shah must be accepted, viz., that the amended definition is declaratory in nature and, therefore, it would have retrospective effect. Hence, the petitioner company which was not within the definition of the word “undertaking” prior to the amendment has now been brought within the purview of the amended definition and therefore, it is an undertaking within the meaning of the amended definition. That being so, under provisions of section 23 of the Monopolies and Restrictive Trade Practices Act, the petitioner company would be required to obtain prior permission of the Central Government before such an amalgamation can be sanctioned. It must be borne in mind that the object of section 23 of the Monopolies and restrictive Trade Practices Act is to see among other thing that the amalgamation is not used as a device to create new monopolies or to bring about restrictive trade practices. This is a wholesome provision and must be given effect to in letter and spirit. In the case of a bona fide genuine proposal for amalgamation, this provision should not become a handicap. When Mr. B. R. Shah asked what was his objection was in obtaining the clearance from the Central Government under section 23, he said that it was a very time-consuming process. Considering that this petition was filed as far back as in October, 1983, and the amendment was brought about in 1984, an application could have been made soon after the amendment. By now the approval of the Central Government would have been secured. But no such application is filed till today. This appears to be a bona fide case. It should not be difficult for the petitioner company to obtain the said permission within reasonable time.
16. It is further argued by Mr. Raval that once this court comes to the conclusion that the respondent companies are not investment companies, the court must necessarily come to the conclusion that section 23 of the Monopolies and Restrictive Trade Practice Act is not attracted and the court is bound to grant sanction to the amalgamation proposal de hors the provisions of the Monopolies and Restrictive Trade Practice Act. For his proposition, Mr. Raval has relied on an unreported judgment of this court (Coram : N. h. Bhatt j.) passed in Company Petitions Nos. 19 to 25 of 1983, wherein the court had dealt with the objections raised against granting sanction for the amalgamation. One such objection was that the companies were investment companies. The court held that in view of the finding that the companies are not investment companies, the sanction for amalgamation should be granted, based on the aforesaid order of this court, Mr. Raval has urged that judicial comity will require that the said judgment of this court should be followed and if this court does not agree with the view in the aforesaid decision, it may refer this matter to a larger Bench. This submission of Mr. Raval cannot be accepted because in the aforesaid decision, the court has not laid down that the amalgamation application cannot be rejected on any ground other than the fact that the company concerned is not an investment company. In fact, this court is in agreement with the aforesaid decision in so far as it is held therein that if a company is not an investment company it does not come within the purview of the Monopolies and Restrictive Trade Practices Act on that ground but that does not mean that a company although it may not be an investment company, may yet come within the purview of the Monopolies and Restrictive Trade Practices Act on some other ground. Here, in this case this court has come to the conclusion that the respondent companies are not investment companies and, therefore, they do not come within the purview of the Monopolies and Restrictive Trade Practices Act on that ground. But the fact that the respondent companies had their own undertakings in the past is a sufficient ground to bring them within the purview of the amended definition of ” undertaking” and hence it is held that they are governed by section 23 of the Monopolies and Restrictive Trade Practices Act.
17. Mr. Raval has also urged that the respondent companies are not the present owners of the undertakings within the meaning of section 2(J)(A) and, hence, according to him, the respondent companies would not come within the purview of section 23 of the Monopolies and Restrictive Trade Practices Act. This submission of Mr. Raval also must fail because although the respondent companies are not the owners of the undertakings at present, the fact that they were the owners of the undertakings in the past in sufficient for the purpose of the amended definition of ” undertaking” which includes not only present and future existence but also the past one. Mr. Raval has further argued that if the Legislature had intended to include companies which existed in the past only, it would have used words ” had been”. But the words used are ” has been ” which indicates that the Legislature had contemplated the existence of the enterprises not merely in the past but also in the present. This submission of Mr. Raval must also be rejected because whether the words used are ” has been ” or “had been”, it does refer to an event that has already occurred in the past, which need not continue either in presenti or in future. The intention of the legislature seems to be fairly clear in amending the definition of the word ‘undertaking’. Before the amendment, the enterprise which was in existence was subjected to the provisions of the Monopolies and Restrictive Trade practices Act. But the Legislature though in fit to extend the provisions to past as well as future enterprises and, therefore, it would not be correct or proper to say that the amended definition does not take within its compass an enterprise which was in existence in the past but has cased to exist with very little or no likelihood of its revival in future. Apparently, what the Legislature meant was the existence in the past, pure and simple, unrelated to the present or future. If any different interpretation is given where the past has to be linked either with the present or future, it may create many complications over and above a great deal of uncertainty. Therefore, it is held that the amended definition of undertaking takes into consideration the activities of an enterprise in the past, in the present or in the future separately and distinctly on its own.
18. In this view of the matter, it is held that it is incumbent on the respondent companies to obtain prior approval of the central government under section 23 of the Monopolies and Restrictive Trade Practice Act of the amalgamation. As regards the sanction on merits, it is held that there are good and sufficient grounds for sanctioning such an amalgamation as proposed.
19. It is prayed on behalf of the petitioners that the amalgamation which was originally proposed to be effective from July 1, 1981, may be allowed to be amended and to be effective on and from July 1, 1982. the reason advanced for such a modification is that on the petitions of the two respondent companies, the High court at Bombay has sanctioned amalgamation to be effective from July 1, 1982. On behalf of the petitioner company it is urged that the date of amalgamation granted by this court should coincide with the date on which the amalgamation is sanctioned by the High Court at Bombay. Mr. Raval, learned counsel for the respondent companies, was asked whether such a modification would have any effect on the tax liabilities of the companies concerned or whether any declaration under section 72A of the Income-tax Act, 1961, would be required to be made. Mr. Raval has made a statement on instruction that by the proposed modification, neither the tax liabilities would be adversely affected nor would it create any other adverse implication. Prima facie, it appears that there can be no objection to such a modification being granted especially when the High court at Bombay has made the amalgamation effective from July 1, 1982. In the present matter also, the same date should be the effective date, otherwise, there may be avoidable complications. Hence, the modification as ought for is granted and it is directed that the amalgamation shall be effective from July 1, 1982.
20. Mr. B. R. Shah has urged that now that this court has held that the permission of the Central government for amalgamation under section 23 of the Monopolies and Restrictive Trade Practices Act is necessary, the Central Government may be directed to hear and dispose of the application made by or on behalf of the respondent companies without delay. Mr. B. R. Shah has pointed out that the present petition as well as the two petitions at Bombay had been pending for a long time and, therefore, in the interest of all concerned, such an application, if made, be disposed of as son as possible. Mr. S. R. Shah, learned standing counsel for the Central government, has stated that such an application, if and when received will be disposed of as early as possible. In the facts and circumstances for the case the Central Government is directed to dispose of the application or applications, if made by or on behalf of the respondent companies, within a period of three months from the date on which such application or applications are received by the concerned department of the Central government. The amalgamation as prayed for with the modification is sanctioned, but it will be given effect to only after it has been approved by the Central government under section 23 of the Monopolies and Restrictive Trade Practices Act.
21. In the result, the petition is allowed. The company application of the objector is rejected. The petitioner company is directed to pay the costs of the advocate’s fees of the central government, which is quantified at Rs. 5,000 as the hearing of the petition and the application has gone on for several days. The parties are at liberty to mention it in case there is any difficulty.