IN RE Tecumseh Products India Private Ltd.

CITATION: 82 (1999) DLT 518

DECIDED on: 13.08.1999

FACTS

In this case a Company Petition was filed by M/s. Tecumseh India Private Limited (“Transferee Company”) seeking amalgamation of M/s. Tecumseh Products India Limited (“Transferor Company”) with the Transferee Company. Both the Transferor and Transferee Company belonged to same group.

The scheme of amalgamation provided that all the assets and liabilities of the business of the transferor company would be taken over by the transferee company, including their workmen and the employees. As per the proposed scheme all the members of the transferor company, immediately on or before the effective date, were to become the staff, workmen and employees of the transferee company and their services were deemed to have been continued without interruption or broken by the reason of the said transfer.

ISSUE

Whether the Scheme of Amalgamation should be allowed. If yes, what are the various factors which must be looked into before approving the scheme?

HELD

The Delhi High Court considered the following crucial facts before it eventually approved the scheme of amalgamation.

• The service conditions applicable to the concerned staff (workmen or employees) after such transfer, was not in any case less favourable to them, than those which were applicable to them immediately preceding the transfer;
• The scheme was not in any manner prejudicial to the public interest or the interests of members of the transferor company.
• The affairs of the company was not being carried out in any manner prejudicial to the creditors or shareholders or public at large.

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