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Judicial Miscellaneous No. 19 of 1982, decided on 21st December, 1982.

‑‑ S. 153 (1) & (2)‑Merger of Companies‑Petitioner filing application for approval and sanction of proposed merger of company with company on terms and manner specified in Special Resolution‑Notice published in daily newspapers for filing objec tions‑No objection raised by any creditor or any other person Out of creditors 9 filing no objection‑Registrar Joint Stock Companies also issuing notice who in reply raised points stating that resolution of Board of Directors does not indicate to have been passed by three‑fourth majority and that directions be issued for calling, holding and conducting of meetings of creditors of com panies for proposed arrangement‑Resolution, however, found pas sed unanimously and pursuant to Court direction, companies already filing letter containing no objections from 9 out of 10 creditors and in circumstances, calling of meeting of creditors not‑necessary Petition allowed, in circumstances.

Iqbal Haider for Applicants.

Data of hearing : 21st December, 1982.

This is an application under section 153 of the Companies Act, ,f 1913, for approval and sanction of proposed merger of the Pakistan Tractor Corporation Limited, the applicant No. 1, with the Pakistan Automobile Corporation Limited, the applicant No. 2 on the terms and manner specified in the Special Resolution dated 4th March, 1982, a copy whereof is annexed to the petition as Annexure "D", and it is further prayed as follows

"(a) Approve and sanction the transfer of the business, current and movable assets, the employees and workmen of and provident fund created for their benefit by Applicant No. 1 to the Appli cant No. 2, with effect from 1st April, 1982.

(b) Order the transfer of ownership and possession of the immovable property (listed in Annexure "F" hereto) fixed assets, investment and amounts receivable (listed in Annexure "G" hereto) and transfer and assignment of all the liabilities (listed in Annexure "J" hereto) from the Applicant No: 1 to the Applicant No. 2.

(d) Order the transfer and assignment of the contracts (listed in Annexure "I" hereto) and lease/tenancy in respect of the pre mises (listed in Annexure "H" hereto) from the Applicant No. 1 to and in favour of the Applicant No. 2.

(e) Order the continuation by or against the Applicant No. 2 of any legal proceedings pending in any Court, judicial or any quasi judicial authorities by of against the Applicant No. 1.

(f) Order that the Applicant No. 1 company may be dissolved forthwith.."

It is claimed in paragraph 1 of the petition that the entire share capital of Applicant No. 1 is owned and controlled by the Applicant No. 2‑or by his nominees and that the Applicant No. 2, is subsidiary of the Applicant No. 2.

Notice of this petition was published in daily MORNING NEWS dated 3rd September; 1982, daily HURRIYAT Gated 5th September, 1982, and Gazette of Pakistan (Part VI rage 243), dated 6th October, 1982. No objections have been filed by any creditor or any other person. Indeed Mr. Iqbal Raider has filed an affidavit of Mr. Waseemul Haq Haqqie, General Manager and Secretary of the Applicant No. 1, annexing therewith 9 letters from the following companies or firms stating that they have no objection .to the proposed merger and to the present application.

"(1) Berger Paints Pakistan.Ltd.. Karachi.

(2) Fiat Trattori.

(3) Zarsehob Engineering Enterprises Ltd.

(4) Yusuf Industries.

(5) Trailer Development Corp. Ltd.

(6) Millat Tractors Limited.

(7) T.A. Gulamally & Company.

(8) The General Tyre & Rubber Company of Pakistan Limited.

(9) Tapal Enterprises."

'From Annexure "J" it appears that, there are in all 10 creditors, out, M of whom 9 have stated their no objections. The total amount due to the creditors is Rs. 12,90,54,577.84, including the amount of Rs. 4,73,666 due to staff gratuity. It appears that only one creditor namely, Chloride Pakistan Limited to whom a sum of Rs. 4,19,680, is due ha not filed its objections but at the same time it has also not filed any objection.

The Registrar of Joint Stock Companies was also issued notice and in reply Mr. S. Zaheer Ahmed, Assistant Registrar, Joint Stock Com panies, Karachi, has filed a statement stating that he has nothing to urge against the petition, but he has raised the following points

(i) The resolution of Board of Directors, referred to in para. 5 of the Application, does not indicate if the same has also been passed by the members by a three‑fourth majority required for such resolution under subsection (2) read with subsection (1) of section 153 of the Companies Act, 1913,, and

(ii) that the Honourable Court may consider the desirability o directing the calling, holding and conducting of the meetings or the creditors of the Applicants for their agreement to the proposed arrangements in terms of section 153 (2) ibid."

So far as the first point raised by the Assistant Registrar, Join Stock Companies is concerned, it is submitted by Mr. Iqbal Haider. that the entire share holding of the company (Applicant No. 1) sough to be merged is held by the Applicant No. 2 and its nominees and the Special Resolution was passed unanimously. I think that the submission of Mr. Iqbal Haider is correct in view of the statement made paragraph 1 of the petition.

So far as the second point is concerned Mr. Iqbal Haider state that pursuant to the direction of the Court he has already filed letter containing no objection from 9 out of 10 creditors to whom Rs. 12,85,34,897.84 is due. Thus only one creditor ‑namely chloride Pakistan Limited, to whom only a sum Rs. 4,19,680 is due, has neither filed any objections nor No Objection letter.

In these circumstances, I do not think that the calling of the meeting of the creditors is necessary.

I, therefore, grant the petition; as prayed.

M. Y. M. Petition accepted.

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