Question

Amalgamation of Companies in National Interest is dealt under

• A. Section 388 of the Companies Act
• B. Section 378 of the Companies Act
• C. Section 396 of the Companies Act
• D. Section 390 of the Companies Act

Hint:

Remember to distinguish between voluntary mergers/amalgamations (governed by Sections 230-234 of the 2013 Act, previously S.391-394 of the 1956 Act) which are scheme-based and require Tribunal approval, and compulsory amalgamation in public interest (S.237 of the 2013 Act, previously S.396 of the 1956 Act) which is an executive power of the Central Government.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
The question asks for the specific provision in the Companies Act that empowers the Central Government to order the compulsory amalgamation of companies. This is distinct from voluntary mergers and amalgamations approved by the Tribunal, as this power is exercised by the government when it is deemed essential in the public interest.
Step 2: Detailed Explanation:
The power for compulsory amalgamation in the public interest was a significant feature of the Companies Act, 1956. \begin{itemize} \item Section 396 of the Companies Act, 1956 was titled "Power of Central Government to provide for amalgamation of companies in public interest." \item This section granted the Central Government the authority to order the amalgamation of two or more companies into a single company if it was satisfied that it was essential in the public interest. \end{itemize} This power has been carried forward into the Companies Act, 2013, under Section 237, which deals with the power of the Central Government to provide for the amalgamation of companies in the public interest. Since the options refer to the section numbers of the 1956 Act, Section 396 is the correct answer.
Step 3: Final Answer:
Amalgamation of Companies in National Interest is dealt under Section 396 of the Companies Act (1956).