The amalgamation had run into trouble with the union challenging the matter in court. The issue had reached its climax when the Registrar of Companies (RoC) under the directions of the regional director, western region, department of company affairs (DCA) filed an affidavit supporting the union's stand and alleging that the merger would not be in the public interest.

In an unexpected development, however, the RoC decided not to press for the objections and left it to the court to decide the issue on merits.

While dictating the matter in the open court, justice FI Rebello pulled up the RoC and the regional director for treating the matter casually. "It is the statutory duty of the official liquidator and regional director to investigate and file their affidavits in matters ofamalgamation," he said.

According to the judge, if any information is required, then it should be first obtained complete with the formalities. The official liquidator gave his okay to the amalgamation in May this year.

The judge also rejected the plea of the union's counsel, Rabindara Hazari, to stay the order. It is learnt that the union has decided to appeal before a division bench against Friday's judgment.

Meanwhile, Hoechst Marrion has decided to proceed with the amalgamation procedure. Company sources say the court's order will be placed before the board on October 16 when it will also consider the consolidated accounts of Roussel India and Hoechst Marrion.

Relying on two judgments of the Supreme Court (Mehir Mafatlal Industries and Hindustan Lever Employees' Union), justice Rebello ruled here on Friday that the amalgamation of Roussel India with Hoechst Marrion was not against the public interest.

"What is in public interest cannot be put in a strait jacket as it keeps on changing," thejudge said. Citing the HLL employees' union order, the judge said that special care should be taken when the merger involves the subsidiary of a foreign company.

The two apex court judgments lay down in detail the principles of amalgamation of companies and the tests which decide if the amalgamation is in public interest or not.

Justice Rebello, in his order, considered the questions - whether public interest is involved in the case and secondly, if amalgamation is approved, would public interest suffer?

The judge struck down the objections put forth by the union and the RoC as there was no merit involved. The objections included the change in the accounting policy of the company, improper disclosure by the directors, concealing the fact that Roussel India was making losses, avoidance of capital gains and overvoicing and undervoicing of products.

Regarding the remittance of foreign exchange of Rs 3.91 crore, the judge said: "If such permission is granted by the RBI, then it is not with the court toprobe as to what the RBI has done."

Regional director, RoC get flak

The regional director, western region, SB Mathur and registrar of companies, Probodh, found themselves on the wrong side of the fence. While passing strictures against both (who were present in the court), justice FI Rebello said that the authorities should verify the facts before levelling serious allegations including excess remittance of forex of Roussel India.

The judge repeatedly asked the RoC counsel HK Vardhan whether the matter required any investigation or not. "Though the Reserve Bank of India allowed remittance of the money and you are objecting, show whether the matter requires investigation," the judge wanted to know. The judge also asked if the government wanted to write to the RBI.

Probodh and Mathur on Friday filed their affidavits answering the court as to why the RoC decided not to press the objections raised against the merger.

Probodh has denied that he asked his counsel to withdraw the objections. Mathurhas stated that the department received directions through Aditya Prakash, deputy secretary, ministry of company affairs, to leave the matter for the court to decide.