9911796707
TMI Blog1972 (5) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... he company held on December 18, 1971, that the word "cotton" be added after the word "grains" and before "and oils oilseeds of all kinds" in clause III, sub-clause 1, thereof. The petitioner-company has been, among other things, regulating and maintaining a clearing house for fixing and declaring market rates and settlement dates for fixing brokerage, for the periodical settlements of contracts and differences, for passing on the delivery orders for clarification, control, regulation and admission of members, for declaring members as defaulters for non-payment of dues and doing various other such acts in the course of such business mentioned in paragraph 6 of the memorandum of association of the company. This petition was opposed by R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any receipt. Raj Kumar Bansal filed a petition (No. 26 of 1972) under section 155 of the Companies Act stating that the forfeiture of his shares was invalid and asking for rectification of the said register. Yet another application (C.A. No. 146 of 1972) has been filed by Raj Kumar Bansal praying that Company Petition No. 7 of 1972 may be stayed till the disposal of Company Petition No. 26 of 1972. To dispose of Company Petition No. 26 of 1972 evidence would have to be recorded. On the other hand Company Petition No. 7 of 1972 is stated to be urgent because the company's request for the issue of necessary permission by the Government will be held up and would not be considered unless the memorandum of association is altered. I find no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner-company has not been doing any business itself in food-grains, etc . It has been only acting as a kind of a clearing house, a task which has been specifically and fully referred to in paragraph 6 of the memorandum of association. For this purpose it would hardly matter if it acted as a clearing house in respect of food-grains, as it was formerly, or cotton, as it is now sought to be amended. The true legal position is that the business must remain substantially the same and the additions, alterations and changes are only steps-in-aid to improve the efficiency of the company. This was so held by Ramaprasad Rao J. of the Madras High Court in In re Rajendra Industries ( Private ) Ltd. [1967] 37 Comp. Cas. 563 (Mad.) who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany can carry on many businesses not connected with jute, and hence confirmation of the alteration shall not be contrary to the spirit of the objects of the company. Further, the new business to be started by the company must be one for which there is a demand and which will prove advantageous to the members and creditors thereof. Nothing has come to my notice which may show that there is a greater demand for goods which can be manufactured under the existing memorandum of association than for rubber goods desired to be manufactured by the company. To put it differently, the manufacture of rubber goods shall not, under existing circumstances, be detrimental to, nor shall be destructive of, or inconsistent with the existing business, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objects clauses in the memorandum as they stand. The doctrine of paramount object or main object of the company which have received judicial notice in several cases is a matter, which in my view, is material for consideration in applications for an order for winding up of the company on the just and equitable ground or in other applications, where the question of winding-up is material, for instance, in an application under section 397 of the Act. This is the view which has been taken in all the cases discussed above, in which the question was whether the company should be wound up on the just and equitable ground. If the substratum of the company is gone, that may be a good ground for making an order for winding up of the company on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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