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TMI Blog1965 (4) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... business of life assurance, sickness assurance, accident assurance and any other kind of assurance in general. Another object mentioned was to purchase or otherwise acquire the business and property of any other person, company or firm, and to carry on or stop that business. Some of the other objects included were: "to place on deposit with local banks or lend to persons, firms or other companies, money on securities or otherwise for any period, the monies not required for the immediate purpose of the company or to invest the same in any of the securities, or in properties, estates, buildings, or shares of any joint stock company or companies; to carry on business as bankers capitalists, financiers, concessioners and merchants and to undertake and carry on and execute all kinds of commercial trading and other operations ; to carry on all kinds of promotion business and in particular to form constitute, float and lend money to assist and control any companies, associations or undertakings whatsoever." On 18th November, 1964, - a special resolution was passed unanimously at an extraordinary general meeting of the company after notice and it was resolved to alter the objects of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importers, exporters, merchants, ship-owners, charterers of ships and transport, cartage and haulage contractors, garage proprietors, owners and charterers of road vehicles, aircraft, tugs, barges and boats of every description, lightermen and carriers of goods and passengers by road, rail, water or air, carmen, cartage contractors and agents, forwarding, transport and commission agents, customs agents, stevedores, wharfingers, cargo superintendents, packers, haulers, warehousemen, storekeepers, electricians and job masters. (6) To carry on business as proprietors of flats, and to let on lease or otherwise apartments therein, and to provide for the tenants and occupiers thereof all or any of the conveniences commonly provided to flats, suites and residential and business quarters. (B) Sub-clause ( p ) be deleted and in its place, the following sub-clauses be incorporated : To carry on any other business, industry or trade whether manufacturing, commercial or otherwise that may seem to the company capable of being conveniently carried on in connection with the above objects or calculated, directly or indirectly, to enhance the value of or render profit able any of the company's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge, Delhi. The audited statement of assets shows an excess of Rs. 39,67,491 over the liabilities. Prayer has, accordingly, been made for confirmation of the alterations in terms of the special resolution. Notice of the petition was given to the creditors, shareholders and other persons interested in the company by publication in the Delhi Gazette, Hindustan Times and New Bharat Times. Notice was also given to the Registrar of Companies. No one apart from the Registrar of Companies has opposed the petition. According to the Registrar, the company has been doing no business after 1st December, 1961, except in investment of funds, which was only ancillary to its main object and its income since 1961 consisted mainly of dividends, interest and profits on the sale of investments. The Registrar has further stated that the proposed object can neither be carried on more economically or efficiently nor can the new objects be conveniently and advantageously combined with the existing investment business. The substratum of the company, it is stated, has gone and it is liable to be wound up. Reference has also been made by the Registrar to a complaint dated 17th November, 1964, from R.L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the company has continued to carry on its investment business, and its income for the years 1961, 1962 and 1963 consisted mainly of dividends, interest and profits on sale of investments. The Registrar too admits that the company has been carrying on the business of investment of funds, though, according to him, this business was only ancillary to its main objects and the income of the company since 1961 consisted mainly of dividends, profits and interest on sale of investments. According to the statement of assets and liabilities of the company as on 31st December, 1963, the investment and cash deposits amounted to Rs. 27,85,994 while loans on mortgage of properties and shares amounted to Rs. 8,89,600. The report and accounts for the year 1963 have also been produced at the hearing of the petition and they contain more details of investment. The profit and loss of the company for the year 1963 shows that gross interest and dividends amount to Rs. 2,17,152. Mr. Ved Vyas has urged that the investment business carried on by the company was an independent business and not an ancillary business. He has in this connection referred to Standard General Assurance Co. Ltd., In re A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expiry of the licence of the company it had no existing business. It was held that the company carried on cold storage business since January, 1956, and so it was not correct to say that the company had no existing business. The additional business proposed by the company was held to be not destructive of or inconsistent with the business already carried on and as such the objection raised by the Registrar was repelled. Dealing with the scope of section 17(1)( d ), Capoor J, quoted with approval the following observations made in Bhutoria Brothers ( Private ) Ltd., In re [1958] 28 Comp. Cas. 122 . "That provision says that the memorandum may be altered with respect to the objects of the company to enable it to carry on 'some business'. The words 'some business' in that clause apparently must include business other than the business which is already being carried on under the existing memorandum. Therefore, the addition of 'some business' may be the addition of a business which is entirely a new departure from the business already carried on. The only requirement of the statute law in India is that such business must be one which can (1) conveniently or advantageously be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness as manufacturers of and dealers in chemicals, petro-chemicals, drugs, essences, acids, etc.; to carry on the business of engineers, metallurgists, iron, steel and brass founders; to execute contracts for the supply of machinery ; to carry on business of importers, exporters ; to render pecuniary or other assistance for helping settlement of industrial or labour problem. The application under section 17 of the Companies Act, filed on behalf of the company, after an exhaustive review of the case-law, was allowed and the special resolution was confirmed. In the present case I find that the material on the record shows that the assets of the company exceed its liabilities by over Rs. 39 lakhs. Satisfactory arrangements have been made with regard to settlement of all pending liabilities of the company. The company is in good financial position and has sufficient working capital. It would also appear from the material on the record that the shareholders are of the view that better returns are likely to be given to the shareholders if some industrial or commercial activity is undertaken by the company. The new business suggested is not inconsistent with or destructive of the prev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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