1966 (11) TMI 50 - HC - Companies Law

Alteration of memorandum, Memorandum of association Special resolution and confirmation by CLB required for alteration of and Representation of Corporation at Meetings of Companies & Creditors, Meetings and proceedings Contents and manner of service of notice and persons on whom it is to be served

Summary

Issues Involved:
1. Application for alteration of the memorandum of association to change the registered office location.
2. Contestation by the State of West Bengal and the Registrar of Companies.
3. Locus standi of the State in the matter.
4. Validity of the resolution and notice.
5. Economic implications and potential loss of revenue for the State of West Bengal.

Issue-wise Detailed Analysis:

1. Application for Alteration of the Memorandum of Association:
The petitioner, Mackinnon Mackenzie & Co. Private Limited, sought an order to confirm the alteration of its memorandum of association by changing the registered office from Calcutta to Bombay. The company argued that the change was necessary for more efficient and economical business operations, as the majority of its business activities and senior staff were now based in Bombay.

2. Contestation by the State of West Bengal and the Registrar of Companies:
The application was contested by the State of West Bengal and the Registrar of Companies. The State argued that the company had benefited from the State's resources and that the shift would lead to increased unemployment and loss of revenue for West Bengal. The Registrar also raised concerns about the validity of the resolution and notice.

3. Locus Standi of the State:
The court examined whether the State had the locus standi to contest the application under section 17 of the Companies Act. The court noted that section 17 requires notice to be given to every person or class of persons whose interest will be affected by the alteration. While the State is not explicitly mentioned, the court acknowledged that the State had been given notice and was therefore entitled to be heard. However, the court emphasized that the State's right to object was not absolute and depended on the specific circumstances of each case.

4. Validity of the Resolution and Notice:
The court addressed the contention that the resolution was not validly passed and the notice lacked material particulars. It was argued that the representatives of the shareholders at the meeting were not shareholders themselves. However, the court referred to section 187 of the Companies Act, which allows a body corporate to authorize a person to act as its representative at any meeting. The court found that the resolution was validly passed and the notice contained sufficient material facts, even if not all particulars were detailed.

5. Economic Implications and Potential Loss of Revenue:
The State argued that the transfer of the registered office would lead to a loss of revenue and increased unemployment in West Bengal. The court noted that the State had not provided specific details about the potential loss of revenue. The court also emphasized that the interests of the Republic of India as a whole should be considered, rather than focusing on the sectional interests of a particular State. The court found that the company's reasons for the change, including the concentration of business activities and senior staff in Bombay, were valid.

Conclusion:
The court concluded that the petitioner was entitled to succeed in its application. The alteration of the memorandum of association to change the registered office from Calcutta to Bombay was confirmed. The court ordered the company to pay the costs of the State and the Registrar, assessed at 30 G.Ms each.