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1962 (9) TMI 32 - HC - Companies LawMemorandum of association Special resolution and confirmation by CLB required for alteration of
Issues: Petition under section 17 for confirming alteration of memorandum of the company regarding addition of a new business activity not covered by existing clauses.
Analysis: The judgment pertains to a petition under section 17 for confirming the alteration of the memorandum of a company to add a new business activity. The company, Punjab Distilling Industries Ltd., sought to include a fresh object related to acquiring picture houses, cinemas, and theaters for exhibiting pictures and films. The Registrar of Companies opposed the petition, arguing that the proposed new business did not fall under any clause of section 17(1) except possibly sub-clause (d). The judge considered the argument and referred to a previous unreported decision and other case laws to analyze the situation. The judge highlighted the requirement that the new business activity should be conveniently or advantageously combined with the existing business of the company. It was noted that the new business of picture houses and cinemas did not align with the existing distilling business of the company. The judge emphasized that there was no indication that the new business would enhance the existing business or provide any convenience or advantage in combining the two activities. Consequently, the judge found the petition lacking merit and dismissed it with costs amounting to Rs. 100. In conclusion, the judgment focused on the interpretation of section 17 of the Companies Act, 1956, regarding the alteration of a company's memorandum to include a new business activity. The judge considered the requirement that the new business should be conducive to the existing business and provide some advantage or convenience in combination. The judge determined that the proposed business of picture houses and cinemas was not aligned with the existing distilling business of the company and would not serve the purpose of section 17(1)(d). Therefore, the judge dismissed the petition as it failed to demonstrate how the new business activity would benefit or complement the existing operations of the company.
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