TaxTMI 
TaxTMI 
1972 (11) TMI 31
X X X X Extracts X X X X
X X X X Extracts X X X X
....company owning in all 4,525 shares of the value of Rs. 10 each. The company was incorporated on May 12, 1967, with its registered office in Bombay. Its authorised capital is Rs. 17 crores. The share capital of the company is divided between equity shares and redeemable cumulative preference shares. The principal business of the company is the manufacture and sale of agricultural chemicals and fertilisers. After its incorporation the company issued a prospectus at a time when the registered office of the company was in Bombay. The company received a certificate of commencement of business on March 20, 1968. On March 29, 1972, the company gave notice to its shareholders that the fifth annual general meeting of the company would be held in B....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ery year in Bombay for the next three years and that once in every six months information regarding the working of the company would be given through press releases. When the resolution was put to vote fifty-nine persons voted in favour of the resolution and ninety-one persons against it. Thereupon, the chairman demanded a poll. It appears that with the consent of the shareholders then present, the meeting was adjourned to July 12, 1972, for the purpose of taking the poll. The adjourned meeting was held on July 12, 1972, when twenty-three shareholders attended in person and eight by proxy. The resolution, was carried by 91,77,625 votes in favour of the resolution and 9,305 votes, against it. Thereafter, the company has filed the present pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd the remaining about Rs. 2 crores to companies, firms or persons in India. The contention of Wadia and other opposing shareholders is that it makes no difference to the shareholders and creditors in U.S.A. as to where in India the registered office of the company is situated, but it does make a difference to the shareholders in India who are mostly from Bombay and who after the prospectus was issued showing the registered office in Bombay subscribed to the capital of the company on the basis that its registered office was in Bombay. The suggestion is that the shareholders are usually shy of investing in companies away from the place of their residence. Mr. J.I. Mehta, on behalf of the opposing shareholders, invited my attention to the pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....So far as the rights and interests of members as a whole are concerned, the fact that a special resolution is required to be passed by a majority of at least 3/4ths of the persons present and voting, in my opinion, takes care of their rights and interests. Mr. Mehta drew my attention to a judgment of the Orissa High Court in the case of Orient Paper Mills Ltd. v. State [1958] 28 Comp. Cas. 523 (Orissa), where the State Government was allowed to oppose an application for confirming a resolution shifting the registered office out of the State on the ground that under section 12(3) of the Indian Companies Act, 1913, equivalent to section 17(3)(a), it was provided that before confirming the alteration the court must be satisfied that sufficien....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd the court was not concerned to consider the wisdom or desirability of the proposed alteration and that the domestic decision of the shareholders or business wisdom of the shareholders as embodied in the resolution should be confirmed by the court. In my opinion, in considering a petition for confirming the resolutions of alteration of memorandum of association of the company shifting the registered office of the company, the court has to see whether all the formalities of the statute have been complied with. These formalities contain certain safeguards and protection for persons affected. If these formalities have been carried out, the court will next look to the interests of absent shareholders and creditors and consider objections, if....