Hindustan Lever Employees' Union vs Hindustan Lever Limited And Ors on 24 October, 1994
22. In the course of hearing, certain judgments were referred to by both the learned advocates. We are impressed by the judgment delivered in the case of Hindustan Lever Employees' Union v. Hindustan Lever Ltd. [1995] 83 Comp Cas 30 ; AIR 1995 SC 470, and in the case of Miheer H. Mafatlal v. Mafatlal Industries Ltd. [1996] 87 Comp Cas 792 ; AIR 1997 SC 506. According to the ratio of both the judgments, it is clear that the court, while sanctioning a scheme has not to exercise jurisdiction of an appellate court. It has to exercise jurisdiction founded on fairness and it should not interfere with the wishes of the requisite number of shareholders only because the valuation figure arrived at by the valuer could have been different had some different method been used for the valuation. What is to be seen by the court is that the valuation was as per law or settled principles and was done by an independent body. The company court has not to minutely scrutinize the scheme like an appellate court for arriving at an independent conclusion. The court should interfere only if it finds that the scheme, even if sanctioned by the majority, is unconscionable, unfair or illegal. The court should not sit in appeal over the decision of the shareholders nor impose its wisdom on the shareholders in the matter of their discretion with regard to acceptance of the scheme of amalgamation or otherwise. The court never sits in appeal to decide whether the decision of a requisite majority was right or wrong.