ORDER
A.M. Sapre, J.
1. In order to enable this court to pass final order on the compromise/amalgamation/merger application in exercise of power under Section 391 read
with Section 394 of the Companies Act, it is necessary for the Registrar [of Companies] to give his report as contemplated under Section 394(1), proviso, to the effect that the affairs of the company have not been conducted in a manner prejudicial to the interest of its members or to public interest. The letter submitted by the Registrar, dated 12.12.2002, does not indicate compliance of this requirement as contained in the proviso to Section 394 of the Companies Act. The letter only says that the Directorate have examined the amalgamation scheme and noted that the one shareholder named IFCD has objected to the proposed amalgamation/scheme, and hence, the court may be pleased to pass appropriate orders.
2. In my opinion, this cannot be said to be a report which can be said to be in conformity with the proviso to Section 394(1), ibid., referred supra.
3. When the legislature has given a specific direction to the Registrar to examine as to whether affairs of the company have not been conducted in a manner prejudicial to the interest of its members or public interest, the report must indicate in categorical terms that affairs of the company have not been either conducted in a manner which is prejudicial to the interest of its members or to public interest or otherwise, as the case may be. This obligation cannot be dispensed with by the Registrar while submitting the report.
4. So long as such report is not submitted by the Registrar, this court cannot pass final order under Section 391 read with Section 394 of the Act either by accepting the compromise or rejecting it.
5. Accordingly, and in view of aforesaid discussion, the Registrar is directed to submit fresh report keeping in view the obligation cast upon him by the proviso to Section 394(1) of the Companies and submit the report accordingly,
6. Let this be done within a month.
7. So far as the report of the Official Liquidator is concerned, the same as required to be filed in accordance with the second proviso to Section 394(1), ibid,, has already been filed by Official Liquidator. It be taken on record.
