237. Power of Central Government to provide for amalgamation of companies in public interest
(1) Where the Central Government is satisfied that it is essential in the public
interest that two or more companies should amalgamate, the Central Government may, by
order notified in the Official Gazette, provide for the amalgamation of those companies into
a single company with such constitution, with such property, powers, rights, interests,
authorities and privileges, and with such liabilities, duties and obligations, as may be
specified in the order.
(2) The order under sub-section (1) may also provide for the continuation by or
against the transferee company of any legal proceedings pending by or against any
transferor company and such consequential, incidental and supplemental provisions as
may, in the opinion of the Central Government, be necessary to give effect to the
amalgamation.
(3) Every member or creditor, including a debenture holder, of each of the transferor
companies before the amalgamation shall have, as nearly as may be, the same interest in or
rights against the transferee company as he had in the company of which he was originally
a member or creditor, and in case the interest or rights of such member or creditor in or
against the transferee company are less than his interest in or rights against the original
company, he shall be entitled to compensation to that extent, which shall be assessed by
such authority as may be prescribed and every such assessment shall be published in the
Official Gazette, and the compensation so assessed shall be paid to the member or creditor
concerned by the transferee company.
(4) Any person aggrieved by any assessment of compensation made by the prescribed
authority under sub-section (3) may, within a period of thirty days from the date of
publication of such assessment in the Official Gazette, prefer an appeal to the Tribunal and
thereupon the assessment of the compensation shall be made by the Tribunal.
(5) No order shall be made under this section unless—
(a) a copy of the proposed order has been sent in draft to each of the companies
concerned;
(b) the time for preferring an appeal under sub-section (4) has expired, or
where any such appeal has been preferred, the appeal has been finally disposed off;
and
(c) the Central Government has considered, and made such modifications, if
any, in the draft order as it may deem fit in the light of suggestions and objections
which may be received by it from any such company within such period as the
Central Government may fix in that behalf, not being less than two months from the
date on which the copy aforesaid is received by that company, or from any class of
shareholders therein, or from any creditors or any class of creditors thereof.
(6) The copies of every order made under this section shall, as soon as may be after
it has been made, be laid before each House of Parliament.