1966 (12) TMI 37 - HC - Companies Law

Memorandum of association Special resolution and confirmation by CLB required for alteration of

Summary

Issues:
Application to alter the memorandum of association of a company to add new sub-clauses related to objects clause. Interpretation of section 17 of the Companies Act, 1956 regarding altering the provisions of the memorandum with respect to the objects of the company.

Analysis:
The judgment pertains to an application seeking to alter the memorandum of association of a company to add new sub-clauses after the existing objects clause. The company in question is primarily a mining corporation, and the proposed alterations aim to introduce new business activities beyond the scope of its main mining business. The key issue revolves around the interpretation of section 17 of the Companies Act, 1956, specifically focusing on whether the proposed alterations meet the statutory requirements outlined in section 17(a), (b), and (d) of the Act.

The court analyzed the proposed alterations in detail and concluded that they do not align with the statutory provisions of section 17. The judge emphasized that the existing business of the company is primarily mining, and the proposed new clauses introduce activities that do not fall within the scope of the company's core operations. The judge highlighted that the proposed clauses related to construction, fabrication works, machinery dealings, and real estate ventures were unnecessary and deviated from the company's fundamental mining business.

Furthermore, the judge pointed out that several of the proposed clauses were already covered by the existing memorandum of association, rendering the additional alterations redundant. The judge referenced established legal principles from previous court decisions to support the decision to dismiss the application, emphasizing the importance of maintaining consistency with the company's name, Bharat Mining Corporation Limited, and its core business activities.

The Registrar of Joint Stock Companies opposed the application based on similar grounds as discussed by the judge. Despite the Registrar not filing an affidavit, the opposition was deemed valid, considering the principles derived from the existing memorandum and the proposed alterations. Ultimately, the court dismissed the application, citing that the proposed alterations did not meet the statutory requirements under section 17 of the Companies Act, 1956. No costs were awarded in this case.