Judgment:
1. The Petitioner Company has presented this petition under Section 17 of the Companies Act, 1956 for confirmation of the alteration of Clause II of the Memorandum of Association of the company for shifting of its registered office from the State of Madhya Pradesh to the State of West Bengal as approved in the Special Resolution passed in accordance with Section 189 of the Companies Act, 1956, at its Annual General Meeting of the Company held on 22.2.2001.
2. Four Shareholders had sent letter of objection for grant of the prayer of the petitioner company. When the matter was taken up for hearing one of the shareholders Shri Anil Kumar Sharma having authority from the other shareholders was present in person and objected to the shifting of the registered office as proposed by the Company. He submitted that in the meeting held on 22.2.2001 the Board of Directors of the Company forcibly took the approval of the shareholders for shifting the registered office of the company. He further submitted that none of the reasons given by the Company in the Explanatory Statement for the Special Resolution is satisfactory. Since the activities of the Company are being controlled from Jabalpur where the factory is located as also the registered office, shifting of the registered office to Kolkata where all the directors are residing, cannot be a valid ground to shift the registered office. The reason that by shifting the registered office to Kolkata the business of the company can be carried on in a most favourable manner is unfounded.
Shri P.K. Lamba, Practicing Company Secretary appearing for the Company submitted that the company is having its business all over India and it is trying to enlarge its business in West Bengal and other near States.
Due to cut throat competition in the domestic market, the Company is finding it difficult to sell its products in M.P. and other adjacent areas. Further, all the directors of the company are residents of Kolkata where the company has its Corporate Office. In a General Meeting held on 22.2.2001, fourteen shareholders present approved the shifting of the registered office by a Special Resolution unanimously.
Some of present objectors were also present at that time and they never raised any objection.
3. I have considered the matter. From the copy of the minutes of the Board Meeting held on 22.2.2001, I find that the Chairman of that meeting has recorded that the proposal to shift the registered office was approved unanimously by the shareholders. I also find that the comprehensive explanatory statement had been enclosed with the notice for that meeting. The objections that have been raised by the objectors herein mostly relate to the contents of the Explanatory Statement. The objectors neither in their objection memo nor during the hearing indicated as to how the shifting of the registered office would be prejudicial to the interest of the Company or to the shareholders. If they had any reservation on the contents of the Explanatory Statement, they should have raised their objection in the General Body Meeting at the time the proposal was being considered by the General Body. In accordance with Section 194 the minutes of the meeting signed by the Chairman of the meeting in terms of Section 193 shall be the evidence of the proceedings recorded therein. If so, when the resolution has been approved unanimously, the objectors being shareholders cannot now object to the shifting of the registered office in the present proceedings. Accordingly, the objections raised by these four shareholders are rejected.
4. In view of the above and also taking into consideration the contents of the petition and the affidavits filed in support thereof, as also the oral submissions made by Shri P.K. Lamba, Practicing Company Secretary, as also the submissions made vide reports dated 27.6.2002 and 23.8.2002 by the Registrar of Companies, Madhya Pradesh, the alteration in the Memorandum of Association of the petitioner company as approved by the Special Resolution passed in accordance with Section 189 of the Companies Act, 1956 at its Annual General Meeting held on 22.2.2001 is hereby confirmed as set forth in the Schedule hereto forming part of this order subject to the condition that interest of no employee employed, if any, in the registered office of the petitioner company shall be adversely affected either by transfer, retrenchment or otherwise.
RESOLVED THAT pursuant to the provisions of Section 17 of the Companies Act, 1956, Clause II of the Memorandum of Association be altered by the substitution of the words State of West Bengal in place of the words State of Madhya Pradesh.
Further resolved that Clause II of the Memorandum of Association shall be read as under: II. The Registered Office of the Company shall be situated in the State of West Bengal.