2023 CLD 1088 KARACHI-HIGH-COURT-SINDH

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VS Ss. 279, 280, 281, 282, 283 & 285--- Scheme of Merger---approval---Duty of Court---In terms of the Scheme of Merger entire undertaking and business including assets, rights, properties, benefits, powers, privileges, contracts, liabilities, encumbrances, obligations and dues of company were to be transferred to other company---Validity---approach of Court was channelized to ascertain; (i) whether statutory requirements were complied with and; (ii) to determine whether the scheme as a whole was arrived at by the majority, bona fide and the interest of whole body of shareholders in whose interest the majority purported to act and; (iii) whether scheme was such that fair and reasonable shareholder would consider it to be for the benefit of the company and for himself---No objection from any quarter had come forward while all requisite formalities were fulfilled and no exception could be taken---To understand the concept, it was to be seen from the perspective that a wise group of businessmen had taken a decision considering all its pros and cons---While taking such decision there were chances of success and failure but then while questioning such decision, bona fide was the real litmus test---Businessman could take decision foreseeing future aspect and Court could only see that all legal formalities were fulfilled and that the scheme was neither unjust nor unfair or against national interest but could not challenge wisdom of a decision of businessman as by doing that Court would be overriding wisdom of a businessman and their prerogative---Report of Chartered accountants was very material who were engaged for calculating swap ratio in respect of envisaged scheme of Merger---High Court allowed merger of the companies in question as there was no impediment in the Scheme of Merger---Petition was allowed accordingly.

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