Section 237 of CA 2013 : Section 237: Power Of Central Government To Provide For Amalgamation Of Companies In Public Interest

Explanation using Example

Imagine that there are two pharmaceutical companies, PharmaCorp and MedHeal, which are the only producers of a critical vaccine in the region. Due to a global health crisis, it becomes necessary to increase vaccine production. The government determines that an amalgamation of PharmaCorp and MedHeal would be in the public interest to ensure an efficient and increased supply of the vaccine.

The Central Government, under Section 237 of the Companies Act, 2013, issues an order for the two companies to amalgamate into a new entity, "VaxStream." The order specifies the new company's structure, assets, and liabilities, ensuring VaxStream has the necessary powers and rights to produce the vaccine at scale.

Legal proceedings that were pending against PharmaCorp and MedHeal are now to be continued against VaxStream. Shareholders and creditors of the original companies are assured that their interests and rights are preserved in the new company, or they will receive compensation assessed by a prescribed authority.

Should any member or creditor feel the compensation is inadequate, they can appeal to the Tribunal within 30 days of the assessment's publication. Finally, the amalgamation order will be placed before Parliament, fulfilling the requirement for legislative oversight.