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Judgment
S.N. Veriava, J.—These two petitions for amalgamation are being opposed only by the Regional Director, Company Law Board, Bombay, on the grounds that both these companies are registered under the Monopolies and Restrictive Trade Practices Act, 1969, and that the companies have not applied u/s 23, Monopolies and Restrictive Trade Practices Act.
Mr. Rele, appearing for the Regional Director, has argued that the exemption u/s 23(3) is not available to these companies because such exemption is available only in respect of companies whose main business is rendering services which are similar. According to Mr. Rele, the main business of Larsen and Toubro Ltd. is of selling goods and the services rendered are only in the nature of "after sales service" as indicated by the fact that it has sales worth Rs. 372 lakhs whereas the value of the services it provides are only to the extent of Rs. 2.29 lakhs and that, therefore, the services which it renders is only in the region of 0.6 per cent of its total sales. According to Mr. Rele, section 23(3), therefore, cannot apply in such a case.
Mr. Mehta, on the other hand, submits that as shown by the tabulated statement, both the companies are carrying on the same business. He also relies upon the case of In Re: Tata Iron and Steel Company Ltd., in support of his contention that it need not necessarily be the main business of the company and Mr. Mehta submits that since all the three requirements as laid down u/s 23(3) are fulfilled, the exemption u/s 23(3) is available to the companies and they need not apply under the Monopolies and Restrictive Trade Practices Act. In my view, Mr. Mehta is right and the argument of the Regional Director cannot be accepted. The exemption u/s 23(3) is available to these companies.
Under the circumstances, Petition No. 405 of 1986 is made absolute in terms of prayers (a) to (h). Petition No. 406 of 1986 is made absolute in terms of prayers (a) to (g). Costs of the Regional Director fixed at Rs. 300 in each petition and also of the official Liquidator at Rs. 300 in each petition to be paid by the petitioners.