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TMI Blog1972 (4) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ries Ltd., hereinafter referred to as the company, was originally incorporated under the name of Bharat Airways Ltd. on or about August 11, 1945. Upon the nationalisation of the scheduled passenger traffic by air, the name of the company was changed to Bharat Commerce Industries Ltd. with effect from January 4, 1956. The present registered office of the company is situated at No. 10, Camac Street, Calcutta, within the original jurisdiction of this court. The authorised share capital of the company is Rs. 5,00,00,000 divided into 25,00,000 equity shares of Rs. 10 each and 2,50,000 preference shares of Rs. 100 each. The issued and subscribed share capital of the company is Rs. 1,50,00,000 divided into 10,00,000 equity shares of Rs. 10 each, 30,000 9% redeemable cumulative preference shares of Rs. 100 each and 20,000 9.3% second redeemable cumulative preference shares of Rs. 100 each. All the aforesaid shares are fully paid up. The objects of the company will appear from its memorandum of association. The company now carries on, inter alia , the business of manufacturing yarn and textile goods. After the nationalisation of the scheduled passenger flight by air, the company dive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory of Delhi" It was further resolved that, subject to the aforesaid resolution becoming effective, "the registered office of the company be removed from ' Industry House', No. 10, Camac Street, Calcutta-17, to No. 10, Ring Road, Lajpat Nagar IV, New Delhi-24, or such other place in the Union Territory at Delhi as may be determined by the board of directors of the company". The company has not issued any debenture and in fact has no creditor save and except the usual trade creditors in the course of its business. No creditor or shareholder of the company has opposed this application. The court of first instance granted leave to Birla Brothers and its allied concerns' employees' union, of which the employees of this company are also members, to intervene in the proceedings. For the appellant Mr. S. B. Mukherjee submits that the shareholders of the company after due deliberation unanimously resolved to transfer the registered office from Calcutta to New Delhi. No shareholder nor any creditor of the company opposed the transfer. The State of West Bengal was served with a notice of this application but did not choose to oppose the same. There are 18 employees of the company at its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the domestic forum of the company in regard to some of its internal management and affairs as mentioned in the said section. According to Mr. Sen, employees are persons within the meaning of sub-section (4) of the said section whose interests are likely to be prejudiced by the proposed transfer if carried into effect and thus the court of first instance was right in granting leave to the union to intervene. Mr, Sen further contended that the question of bona fides of the company in removing the registered office can be and in fact has to be gone into in such an application. The facts of closure of the registered office and nonpayment of the salaries of the employees have been suppressed in the petition, which, according to Mr. Sen, shows the mala fides on the part of the company. Further, there was no genuine ground, according to Mr. Sen, for transferring the registered office of the company. The proposed transfer, if effected, will certainly prejudicially affect the interest of workers. Mr. Sen relied on cases, Rank Film Distributors of India Ltd. v. Registrar of Companies [1968] 38 Comp. Cas. 487; 72 C.W.N. 384, 389; A.I.R. 1957 Cal. 234 , In re Westburn Sugar Refi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Registrar of Companies in order to enable him to appear before the court and state his suggestion in regard to confirmation of the alteration. Sub-section (4) to the said section was introduced by way of amendment in 1965 by Act LXV of 1965 to empower the Registrar to appear before the court and point out any irregularity in an alteration proposed by a company to its memorandum. Under the English law confirmation by court is not necessary in order to alter the memorandum by a company. The members of the company can do so by means of a special resolution and that comes into effect at once. If 15 per cent. or more of the members of the company object to the alteration they may apply to the court for nullifying the effect of the special resolution. But in our country the alteration proposed by a company by a special resolution of its members to the memorandum of the company cannot take effect until scrutinised and confirmed by the court. Under the section the court has discretionary power to confirm the alteration wholly or in part and/or on such terms and conditions as it may think fit. As noted earlier, only three of the employees of the company did not agree to the proposed tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not removal of registered office. In fact, in England, as it is apparent, no registered office of a company can be removed from one State to another. In the case of Pickles case ( supra ) it was laid down that if a person can do an act lawfully his motive behind doing of the act would be immaterial. In fact, even if the motive was mala fide or malicious to injure another until and unless the action was illegal the motive could not be called into question. In the instant case it appears to us that the resolution was not illegal nor ultra vires nor injurious to any of the members or creditors of the company nor even to its employees who chose to oppose the application for confirmation of the alteration, in view of the statement made by Mr. Sen in this court in regard to them. In the instant case, it is submitted by Mr. Prabir Sen that the fact of closure of the registered office of the company in Calcutta was suppressed from the shareholders in the notice convening the extraordinary general meeting including the explanatory statement to the said notice. In our opinion, the omission of the said fact to be stated in the notice or the explanatory statement thereto did not i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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