MJHEER H. MAFATLAL v. MAFATLAL INDUSTRIES LTD.,

In 'this connection we tried to know from Shri Shanti Bhushan, learned senior counsel for the appellant as to how the appellant felt that the Scheme was unfair to him. He submitted that under the Scheme the transferor-company was losing its identity and was getting merged in the transferee-company. That in the pending litigation between the parties in the Bombay High Court if the appellant succeeded in his counter-claim he was likely to get larger share-holding in the transferee- company and if that was not possible he could have got the complete control of the transferor-

MIHEER H. MAFA1LAL v. MAFA1LALINDS. LID. [S.B. MATMUDAR, J.] 43

company as per the family arrangement. Now once the transferor-company loses its identity then his counter-claim was likely to be infructuous as the subject-matter of the counter-claim will stand withdrawn from the possible operation of the decree if at all granted in his favour in the counter-claim.

r This submission was countered by learned senior counsel for the respon- dent by pointing out that it had no factual basis. That as earlier noted in the suit pending in Bombay High Court if Arvind Mafatlal succeeded then appellant will have to transfer his even remaining 5% share-holding in transferee-company in favour of Arvind Mafatlal. If on the other hand the appellant succeeded in his counter-claim and Arvind Mafatlal's suit was dismissed then the appellant may get the shares which are at present held by Arvind Mafatlal and his group in the transferee-company. But there is c no question of appellant getting any exclusive control of the transferor- company. Therefore, impact of that litigation one way or the other is going to be totally negative so far as the existence of the transferor-company or otherwise is concerned. We find considerable force in the contention of iearned counsel for the respondent. It is also pertinent to note that if the D appellant felt that the Scheme was unfair inasmuch as he was likely to lose his future interest, if any, and control, if any, in the transferor-company by its merger and loss of identity on account of the Scheme it passes one's comprehension how he as sitting director of the transferor-company ap- proved of the Scheme, did not object to the Scheme and on the contrary was a party to the resolution of the Board of Directors of transferor-com- E pany to propose the Scheme of its amalgamation with the transferee company. Not only that but even when that Scheme was put for sanction before the Bombay High Court on behalf of the transferor-company the appellant did not object meaning thereby appellant had no objection to the transferor-company losing its identity and getting merged in the transferee- F company pursuant to the proposed Scheme. The appellant's own conduct, therefore, belies his apprehension that the Scheme as proposed was in any was unfair to him or that there were any ma/a fides behind the Scheme attributable to Shri Arvind Mafatlal who is the director of the transferee- company. The second point for determination, therefore, also is found to be factually not sustainable. It is, therefore, held that the Scheme of G Compromise and Arrangement is neither unfair nor unreasonable to the minority shareholders represented by the appellant.

Before parting with the discussion on this point it is also worthwhile to note that apart from the pattern of voting at the meeting of the equity H

44 SUPREME COURT REPORTS [1996] SUPP. 6 S.C.R.

A shareholders, even the share-holding of the respondent-company belies the submission put forward on behalf of the appellant that Arvind Mafatlal's group dominated the constitution of the company and could control the decisions of the shareholders. The evidence on record shows that the share- holding of ANM Group can be worked out to 30.42% approximate- ly. As against aforesaid share-holding the share-holding of financial institu- B tions and MHM group in MIL would work out to 39.03% and that of appellant's group works out at 29.05% while that of other shareholders would work out to 34.34%. Hence it cannot be said that Arvind Mafatlal is at the helm of affairs of the respondent- company or is in the driver's seat or that his family is the virtual master of respondent-company. This is c not a case where it can be urged with any emphasis that the respondent- company is an alter ego of Arvind Mafatlal who is one of the directors of the company and that he could create a show of the Scheme being apparently beneficial to the shareholders but was in fact concealing any covert and hidden device of augmenting his personal interest and interest of his family which was adverse to the interest of innocent investors and other equity shareholders including the appellant. It is also pertinent to note that fina~cial institutions and statutory corporations held substantive percentage of shares in respondent-company. This class of shareholders who are naturally well informed about the business requirements and economic meeds and the requirements of corporate finance in the light of their personal interest would not have wholly approved the Scheme if it was contrary to the interest of shareholders as a class. Individual personal interest of a minority shareholder like the appellant is absolutely out of consideration when such class meeting acting for the benefit to the whole class of equity shareholders take up the consideration of the Scheme for its approval. Consequently it could not be said that the majority shareholders had sacrificed the class interest of appellant minority shareholders when they voted with overwhelming majority in favour of the Scheme. Point No. 2 is accordingly answered in the negative. That takes us to the consideration of Point No 3 for determination.

G Point No. 3

In a way the answer to point No. 2 necessarily results in negativing this point also. Even that apart we fail to appreciate how the Scheme of Amalgamation can be said to be unfair and amounting to suppression of H minority shareholders represented by the appellant. It has to be kept in

MIHEERH.MAFAlLAL v. MAFAlLALINDS.LTD.[S.B.MAJMUDAR,J.] 45

view that by this proposed Scheme of Amalgamation the transferor-com- A pany was getting merged in the transferee-company. Now even if it is held that the appellant succeeds in his counter-claim in the suit pending in Bombay High Court and if he is to get the share-holding of Arvind Mafatlal and his group transferred to him so far as transferee- company is con- cerned, the transferee-company because of the amalgamation will then be B having more diversified activities and if at all according to the appellant because of this future success, if any, in the counter-claim he is going to replace A'l:vind Mafatlal and his group in the management of the respon- dent-company he would have larger field to operate and larger company to manage. We fair to appreciate as to how such a scheme from any point of view can amount to suppression of appellant's minority interest in the c share-holding of the company. This interest is not going to be in any way adversely affected. If at all, his share-holding is going to increase in the respondent-company if his counter-claim succeeds. If his counter-claim fails he will have to get out lock, stock and barrel from the respondent- company and he will have to wash his hands off the same. In either case the Scheme of Amalgamation will have no adverse impact on the appellant's interest in the respondent-company. On the other hand the Scheme of Amalgamation is likely to have a move beneficial effect on the appellant's share-holding in the respondent-company if he succeeds in his counter-claim in Bombay High Court. It has to be kept in view that the question of bona fide of the majority shareholders or the alleged suppres- sion by them of the minority shareholders or their attempt to suffocate their interest has to be judged from the point of view of the class as a whole. Question is whether the majority equity shareholders while acting on behalf of the class as a whole had eXhibited any adverse interest against the appellant's minority shareholders also having similar interest as members of the same class, while approving the Scheme or had acted with any oblique motive to whittle down such a class interest of the minority. As we have seen earlier no such situation ever existed both at the time when the Scheme of Compromise and arrangement was cleared and proposed by the Board of Directors of both the transferor and transferee companies and also at the stage when the Scheme was put to vote before the meeting of equity shareholders forming a common class of which the app~llant was also a member though a minority member. Consequently point No. 3 will also have to be answered in the negative on the same lines and for the same reasons on the basis of which point No. 2 is answered. H

46 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A Point No. 4

So far as this point is concerned the relevant provis10ns of the · Companies Act to which we have made a reference earlier indicate that the Court has to order under Section 391(1) a meeting of creditors or class of creditors or members or class of members to whom the Scheme of B Compromise or Arrangement is offered by the company. The present controversy centers round a meeting of members. Members of the company are shareholders. Part IV of the Companies Act deals with 'Share Capital and Debentures'. Section 82 provides that 'the shares or other interest of ,. any member in a company shall be movable property, transferable in the c manner provided by the articles of the company'. As per Section 86 the share cap.ital of a company limited by shares formed after the commence- ments of this Act, or issued after such commencement, shall be of two kiQds only, namely, equity share capital and preference share capital. So far as the Articles of Association of respondent-company are concerned D they also contemplate two classes of shareholders, namely, equity and preference shareholders. No separate class of equity shareholders is con- templated either by the Act or by the Articles of Association of respon- dent-company. Appellant is admittedly an equity sharehoWer. Therefore, he would fall within the same class of equity shareholders whose meeting was convened by the orders of the Company Court. However it ·is vehe- E mently contended by learned counsel for the appellant that because of the family arrangement of 1979 on which he relies he was a special class of ·minority equity shareholder who had separate rights against the director of the company and whose special interest because of the pending litigation between him and the director Shri Arvind Mafatlal was likely to be adver- F sely affected by the Scheme, therefore, a separate meeting had to be convened as he represented a class within the class of equity shareholders. It is difficult to agree with this contention. Even though the Companies Act or the Articles of Association do not provide for such a class within the class of equity shareholders, in a given contingency it may be contended G by a group of shareholders that because of their separate and conflicting interest. vis-a-vis other equity shareholders with whom they formed a wider f ' class, a separate meeting of such separately interested shareholders should have been con~ened. But such is not the case of the appellant. It is not his case that his interest as an equity shareholder in respondent-company is in any way conflicting with the general interest of the equity shareholders as H

MIHEERH.MAFATLALv.MAFATLALINDS.LTD.[S.B.MATMUDAR,J.]47

a class. Consequently it could no be urged by him with any emphasis that A the General Body of equity shareholders acting as a class while considering the question of approval of the Scheme was likely to take a decision which could adversely affect the commercial interest of the appellant as an equity shareholder. His personal conflict of interests with the director was totally foreign to the scope of class meeting which was convened to consider the B Scheme in question as we have seen earlier while considering earlier points for determination. It is also to be ~ept in view that the appellant would have urged with some justification his contention for convening a separate meeting representing for him and his group of dissenting equity shareholders if it was his case that the Scheme of Compromise and Arran- gement as offered to him and his group was in any way different from the c Scheme of Compromise and Arrangement offered to other equity shareholders who also belonged to the same class in the wider sense of the term. On the express language of Section 391(1) it becomes clear that where a compromise or arrangement is proposed between a company and its members or any class of them a meeting of such members or class of D them has to be convened. This clearly presupposes that if the Scheme of Arrangement or Compromise is offered to the members as a class and no separate Scheme is offered to any sub- class of members which has a separate interest and a separate Scheme to consider, no question of holding a separate meeting of such a sub-class would at all survive. Even E otherwise it becomes obvious that as minority shareholder if the appellant had to dissent from the Scheme his dissent representing 5% equity share- holding would have been visible both in a separate meeting if any, of his sub-class or in the composite meeting where also his 5% dissent would get registered by appellant either remaining present in person or through proxy. Consequently when one and the same Scheme is offered to the entire class of equity shareholders for their consideration and when com- mercial interest of the appellant so far as the Scheme is concerned is in common with other equity shareholders he would have a common cause with them either to accept or to reject the Scheme for commercial point of view. Consequently there was no occasion for convening a separate class meeting of the minority equity shareholders represented by the appellant and his group as tried to be suggested. It is also to be kept in view that it is not the case of the appellant that any different terms of compromise were offered to persons holding equity shares who were covering by the family arrangement of 1979 or otherwise. In fact the entire proposal of the H

48 SUPREME COURT REPORTS [1996) SUPP. 6 S.C.R.

A Scheme of Arrangement was one affecting equally and in the like manner all the existing equity shareholders of the respondent-company. In this connection it is profitable to refer to what the learned author Palmer in his Treatise Company Law 24th Edition, has to say :

"What constitutes a class : B The Court does not itself consider at this point what classes of creditors or members should be made parties to the scheme. This is for the Company to decide, in accordance with what the scheme purports to achieve. The application for an order for meetings is c a preliminary step, the applicant taking the risk that the classes which are fixed by the judge, unusually on the applicant's request, are sufficient for the ultimate purpose of the section, the risk being that if in the result, and we emphasis the words 'in the result' they reveal inadequacies, the scheme will not be approved. If e.q. rights of ordinary shareholders are to be altered, but those of preference shares are not touched, a meeting of ordinary shareholders will be necessary but not of preference shareholders. If there are different groups within a class the interests of which are different from the rest of the class, or which are to be treated differently under the Scheme, such groups must be treated as separate class for the purpose of the scheme. Moreover, when the Company has decided what classes are necessary parties to the scheme, it may happen that one class will consist of a small number of persons who will all be willing to be bound by the scheme. In that case it is not the practice to hold a meeting of that class, but to make the class a F party to the scheme and to obtain the consent of all its members to be bound. It is however, necessary for at least one class meeting to be held in order to give the Court jurisdiction under the Section."

It is, therefore, obvious that unless a separate and different type of Scheme of Compromise is offered to a sub-class of a class of creditors or shareholders otherwise equally circumscribed by the class no separate f meeting of such sub-class of the main class of members or creditors is required to be convened. On the facts of the present case the appellant has not been able to make out a case for holding a separate meeting of dissenting minority equity shareholders represented by his. The fourth point for determination, therefore, is answered in the negative. That takes

MIHEER H. MAFATLAL v. MAFATLAL INDS. LTD. [S.B. MAJMUDAR, J.] 49

us to the consideration of the last point for determination placed for our consideration by the learned senior counsel for appellant.

Point No. 5

It was submitted that the exchange ratio of equity shareholders so far as the transferee-company is concerned works very unfairly and un- B reasonably to them. As per the proposed Scheme 5 equity shares of transferor-company are to be exchanged for 2 equity shares of transferee- company. So far as this contention is concerned it has to be kept in view. .... that before formulating the proposed Scheme of Compromise and Amal- gamation an expert opinion was obtained by the respondent-company as well as the transferor- company, namely, MFL on whose Board of Direc- c tor~ appellant himself was a members. M/S. C.C. Chokshi & Co., a reputed firm of Chartered Accountants, having considered all the relevant aspects suggested the aforesaid exchange ratio keeping in view the valuation of shares of respective companies. It must at once be stated that valuation of shares is a technical and complex problem which can he appropriately left D to the consideration of experts in the filed of accountancy. Pennington in his 'Principles for Company Law' mentions four factors which had to be kept in mind in the valuation on shares :

"(1) Capital Cover, E' (2) Yield,

(3) Earning Capacity, and

(4) Marketability F For arriving at the fair value of share, three well known methods are applied :

(1) The manageable profit basis method (the Earning Per Share Method) G (2) The networth method or the break value method, anti

(3) The market value method."

So many imponderables enter the exercise of valuation of shares. M/s. C.C. Chokshi & Co. considering all the relevant aspects and obviously keeping H

50 SUPREME COURT REP.ORTS (1996] SUPP. 6 S.C.R.

A in view the accounting principles underlying the valuation of shares sug"" gested the said ratio which was found acceptable both by the Board ot Directors of the respondent-company as well as th.e Board of Directors of the transferor-company. That the appellant himself as a director of that transferor-company gave green single to the Scheme and to this very ratio B of exchange of shares. But Shri M.J. Thakore, appearing for the appellant submitted that form the point of view of the transferor-company it was very profitable to have two shares of transferee-company against five shares of transferor- company. But the difficulty arises only from the point of view of transferee-company shareholders. According to Shri Thakore the proper c exchange ratio would be one share of transferee-company to six shares of transferor-company. It is difficult to appreciate this contention of the appellant. It has to be kept in view that appellant never bothered to personally remain present in the meeting of equity shareholders for point- ing out the unfairness of this exchange ratio to his brother equity shareholders who were likely to be affected by the very same ratio as the appellant. His interest at least to that extent was entirely common and parallel to that of other equity shareholders. But he had no time to remain personally present. He sent his proxy only to record his dissent vote which was in microscopic minority of 5% as compared to 95% majority vote. Not only that even before the Court he did not submitted and contrary expert opinion regarding the valuation of shares of transferor and transferee companies for supporting his ipse dixit that the correct ratio would be 6 : 1 so far as transferor .and transferee. companies were concerned. Shri Shanti Bhushan, learned senior counsel for. the appellant having realised this difficulty submitted that at last these proceedings are continuation of proceedings before the High Court, therefore, this Court may now in order to satisfy itself send for the opinion of an expert. It is difficult to agree. The appellant who was propounding this theory of correct exchange ratio had nothing to offer in support of his contention both b~fore the learned Single Judge as well as before the High Court. It has to be kept in view that the matter was fiercely contested on all permissible points before learned Single Judge. 1:he proceedings were pending before the High t , Court for more than two years from 8th February 1994 till lZth July 1996 when the Division Bench disposed of the appeal. For all these years neither before the learned Single Judge nor before the High Court in appeal the appellant thought it fit to request the Court to either call for the report of

MIHEERH.MAFA1LAL v. MAFA1LALINDS.LID. [S.B.MATMUDAR,J.) 51

any other expert on valuation of shares not did he himself get such report for placing for consideration of the Court in support of his supposed better ratio. It has also to be kept in view that which exchange ratio is better is in the realm of coinmercial decision of well informed equity shareholders. It is not for the Court to sit in appeal over this value judgment of equity shareholders who are supposed to be men of the world and reasonable persons who know their own benefit and interest underlying any proposed scheme. With open eyes they have okayed this ratio and the entire Scheme. 40% of the majority shareholders were financial institutions who were supposed to be well versed on the aspect of valuation of shares. They had no objection to the exchange of 2 shares of transferee-company for 5 shares of transferor company. As stated earlier it was a sort of a package duly · cdnsidering all imponderables and implicit factors which the shareholders had to keep in view for deciding whether to approve the Scheme of Amalgamation or not. The exchange ratio was only one of the itt!ms. They though if fit in their commercial wisdom to ac;cept the Scheme as a whole along with the exchange ration presumaply in expectation of better profits in years to come when the amalgamated companies would operate and when there would be, according to the shareholders, better. prospects of earning greater dividends. They willingly agreed to give in exchange two shares of transferee-company for five share of transferor-company and made them available to the shareholders of the transferor- company. The E appellant was representing only 5% dissenting shareholders and his object was almost a voice in the wilderness, which did not appeal to the majority of his brother shareholders. Shri Shanti Bhushan, learned senior counsel for the appellant in this connection invited our attention to the obser- vation of the Division Bench in its judgment at page 375 wherein it has been observed that "if one were to examine the exactitude of exchange ratio that may be offf'.red fairly on the arithmetic scale by taking into consideration various details, there is some force in what were suggested . by Mr. B.R. Shah on behalf of~e appellant. However, keeping in view the scope of enquiry which the court is required to undertake and with whose findings we are concerned, it will not be ~ermissible for us in law to undertake this exercise in the facts and circumstances of present case in absence of bona fides". We fail to appreciate how this observation can be of any avail to learned senior conceal for the appellant as all that the Court wanted to suggest was that even assuming that some another exchange ratio H

52 SUPREME COURT REPORTS (1996] SUPP. 6 S.C.R.

A can be suggested to be better one, it was for the equity shareholders who acted bona fide in the interest of their class as a whole to accept even a less favourable ratio considering other benefits, that may offset such less favourable ratio once an amalgamation goes through. We wholly concur with this view. In this connection we may also refer to a decision of B Maughm, J., in Re Hoare & Co. (No. 2) case (1933) All ER 105 wherein it was laid down that where statutory majority had accepted the offer the onus must rest on the applicants to satisfy the court that the price offered is unfair. In this connection following pertinent observations were made by . 1

the learned Judge :

c "The other conclusion I draw is this X X X X X X the court ought to regard the scheme as a fair one inasmuch as it seems me impossible to suppose that the court, in the absence of any strong grounds, is to be entitled to set up its own view of fairness of the scheme in opposition to so very large a majority of shareholders who are concerned. Accordingly, without expressing a final opinion on the matter because there may be special circumstances in special cases, I am unable to see that 11 have any, right to order otherwise in such a case as I have before me, unless it is affirm- atively established that notwithstanding the views of a very large majority of shareholder, the scheme is unfair."

We may also refer to a decision of the Gujarat High Court in Kamala Sugar Mills Limited 55 Company Cases p. 308 dealing with an identical objection about the exchange ratio adopted in the Scheme of Compromise F and Arrangement. The Court observed as under :

"Once the exchange ratio of the shares of the transferee-company to be allotted to the shareholders of the transferor-company has been worked out by a recognised firm of chartered accountants who are experts in the field of valuation and if no mistake can be pointed out in the said valuation, it is not for the court to substitute its exchange ratio, especially when the same has been accepted without demur by the overwhelming majority of the shareholders of the two companies or to say that the shareholders in their collective wisdom should not have accepted the said exchange ratio on the ground that it will be detrimental to their interest."

MIHEERH. MAFATIAL v. MAFATIALINDS. LID. [S.B.MATMUDAR,J.] 53

These observations in our view represent the correct legal position on this aspect. We may also keep in view that in the present case not only expert like M/s. C.C. Chokshi & Co. had suggested the ratio but another inde- pendent body ICICI Security & Finance Company Limited reached the "' same conclusion which was conveyed by its letter dated 10th November 1993 to the company approving of the entire Scheme along with suggested ratio. A mere look at the report of the Chartered Accountants M/s. C.C. Chokshi & Co. shows that various factors underlying the Scheme of Com- promise and Arrangement were taken into consideration while suggesting the exchange ratio by the said reputed firm of chartered accountants. The said opinion had taken into account the fact that on amalgamation shares have to be cancelled. Increase in share premium account in equity capital of the MIL will also have to be taken into account as a result of final call made in respect of Bond 1992 issue. It has also taken into account sig- nificant increase in the paid-up equity of MIL as a result of issue of its Bond in the international market. It has undertaken exercise in calculating net-worth of two companies. It has also referred to the method of valuation of exchange ratio on the basis of earning per share of the two companies by taking into account five years' working results of the two companies making certain adjustments. Apart from taking into consideration the past results of the two companies, the chartered accountants have taken into account the potentiality of the two companies to earn profit in future, considering existing expansion and modernisation of projected and planned expenditure by the MIL as well as subsidiary and sister concern in hard. It has also taken into account the market price of equity shares of past 24 months, declared dividend by the two companies the overall effect of security scam in the market price, realisable investment and their market value. Taking into consideration multifarious considerations detailed in the report, note was also taken of the fact that MIL held substantial shares of MFL, which shall have to be cancelled on merger of MFL with MIL. :rwo fully paid up equity shares of MIL of Rs. 100 each for every five equity share of Rs. 100 each of MFL, was considered to he G a fair exchange ratio to be offered as term of amalgamation. It was clarified that, 'in absolute terms it would mean that the MIL is keeping considera- tion of equity capital of par value of Rs. 7.77 crores which at the last issue price of share amounts about to Rs. 38.84 crores and which at the correct market price amounts to Rs. 57.4 crores. At the stage of dividend declared H

54 SUPREME COURT REPORTS [1996] SUPP. 6 S.C.R.

A . for 1992-93, it will result in a cost in terms of distributable profits of Rs. 2.72 crores. For an undertaking in a diversified business activity of textile and chemicals with the tota_l infrastructure, knowhow, technology tie up and range of established products and capacities and potential the aforesaid cost to MIL can be regarded as fair and reasonable'. B The aforesaid report of the chartered accountants heavily w~ighed with the transferor-company's Board of Directors which comprised, amongst others, the appellant himself but also the Board of Directors of transferee-company and also weighed with tCe General Body of equity shareholders who approved the Scheme and the ratio with overwhelming c majority. No grievance, therefore, can be make by the appellant at the stage of Company Petition proceedings.for demonstrating the ratio to be exfacie unfair and unacceptable .as the appellant would like to have it.

Undeterred by this position Shri Thakore, learned counsel for the appellant in support of his contention that the exchange ratio was ex f acie unfair to the shareholders. ·of the transferee- company, invited our attention • to the statement showing the working results of both the transferor and transferee companies as found at Annexures M and N of Vol. II of the Paper Book at page 534 and 535. He submitted that these statements showing the working results of the company for the last five years ended 31st March 1993 showed that the earning per equity share after deprecia- tion and tax so far as the respondent-company was concerned was Rs. 30 while earning of transferor-company Mafatlal Fine Spg. & Mfg. Company Limited was only Rs. 7 for the relevant five years. He also invited our attention to the break-up value of the shares of company on the basis of the Balance Sheet as on 31st March 1993 so far as respondent-company was concerned. Annexure 'Q' at page 538 showed value per equity share t of Rs. 100 each at Rs. 1,515 while so far as the transferor-company was concerned the break-up value per equity share was Rs.259. That may be so. But as a package deal when the Scheme as a whole is examined and found to be advantageous to the economic and commercial interest of shareholders as a class only one or two item simplicitor for deciding the exchange ratio cannot tilt the balance as so 'may factors and aspect would enter that exercise. It was undertaken by expert body of chartered account- ants like M/s. C.C. Chokshi & Co. Before parting with the discussion on this point it would be apposite to refer to the decision of this Court in

MIHEER H. MAFATLAL v. MAFATLALINDS. LTD. [S.B. MAJMUDAR, J.) 55

Hindustan Lever Employees' Union (supra). In paragraph 41 of the Report A Justice Sen speaking for himself and Venkatachaliah, CJ, and to which Sahai, J concurred has observed that the problem of valuation in the case of amalgamation of two companies has been dealt with by Weinberg and Blank in the book 'Take-overs and Mergers' in which it is stated that some or all of the 8 listed factors will have to be taken into account in determin- B ing the final share exchange ratio. The Court has also approved the fixation of exchange ratio of the shares of the companies on the basis of adoption of combination of two or more well-known methods of valuation of shares out of many such methods. In para 37 of the Report it has been observed that the question is what method should be adopted for arriving at a proper exchange ratio. The usual rule is that shares of the going concern must be c taken at quoted market value. This principle was also recognised by this Court in the case of CWT v. Mahadeo lalan, (1973) 3 SCC 157. It is not .the case of the appellant that M/s. C.C. Chokshi & Co. had not taken into consideration the quoted market value of shares of both the companies which were going concerns and which were subjected to the Scheme of D Amalgamation in question. For all these reasons, therefore, there is no substance in this contention canvassed on behalf of the appellant that the exchange ratio was ex f acie unfair to the equity shareholders of the trans- feree- company. The fifth point for determination is also, therefore, answered in the negative. E

Before parting with this appeal we may mention that written submis- sions comprising of 69 pages have beeµ. submitted by learned counsel for the appellant. We have gone through the written submissions. We may mention that learned counsel for the appellant was permitted to file written submissions spread over 4 to 5 pages while his written submission have gone upto 69 pages. It may also be mentioned that there was an order passed by us 21st August 1996 permitting filing of written statements within two days but the learned counsel for the Appellant has filed written submissions only on 27th August 1996. Therefore, ex f acie his written submissions are not required to be considered. However in order to see that the appellant may not suffer on account of non-consideration of these written submission we have gone through them and have considered them in the interest of justice. But having gone through the same we find that they involve repetition of the main contentions canvassed before us during oral arguments by their learned senior counsel Shri Shanti Bhushan and by H

56 SUPREME COURT REPORTS (1996) SUPP. 6 S.C.R.

A their counsel Shri M.J. Thakore. Some additional points also appear to have been raised in the written submissions pertaining to additional objec- tions which were not pressed before us at the time of oral hearing and, therefore, they obviously cannot be considered in support of the conten- tions on which the appeal was pressed before us. The written submissions in connection with the points which were already pressed before us are already dealt with by us while considering the main points for determina- tion in the earlier part of this judgment and, therefore, it is not necessary to deal with the same once again.

These were the only contentions canvassed in support of the points for determination which have all been answered in the negative. The inevitable result is that the appeal fails and is dismissed. Jn the facts and circumstances of the case, however, there will be no order as to costs.

v.s.s. Appeal dismissed.