1. The petitioner company has presented this petition under section 17 of the Companies Act, 1956 (hereinafter referred to as “the Act”); for confirmation of the alteration to the situation clause in the Memorandum of Association of the company for shifting of the registered office of the company from the State of West Bengal to the National Capital Territory of Delhi, as approved by a Special Resolution passed in accordance with section 189 of the Companies Act, 1956, at its Annual General Meeting held on 24-9-2004. An application filed by the company seeking extension of time in filing the petition, is allowed.
2. Initially, Director, Economic Offences Investigation Cell, Finance Department, Government of West Bengal, vide his letters dated 8-7-2005, had raised certain queries in respect of the company regarding non-payment of Sales Tax/Profession Tax and non-payment of compensation to the employees for transferring the company to M/s. Hindustan Lever Limited. In reply, the company by its communication dated 11-4-2007, explained all those queries to which Director, Economic Offences Investigation Cell, did not react thereafter, despite further notice dated 16-4-2007 issued by this Bench.
3. Further, this Bench has also issued notices in June, 2007 and August, 2008 to the State Government, for communicating its final view on the petition filed by the company to which neither any objection/ representation has been filed nor did any one appeared for the State Government before this Bench when the matter was heard for final disposal.
4. Two ex-employees of the company, viz., Shri Achhitanand Rai and Shri Prabir De have filed objections to which the company also filed its counter-replies refuting all the allegations raised therein.
5. The company by its letter dated 26-2-2007, has intimated this Bench that it has changed its location of registered office from the previous address to 41, Queens Mansion, 4th floor, 12, Park Street, Kolkata 700 016 and also filed required Form No. 18 with Registrar of Companies, West Bengal, on 28-9-2006, notifying such change in location of registered office.
6. In course of hearing, Shri Anjan Kr. Roy, Practising Company Secretary, representing the company, has reiterated the pleadings and urged this Bench to allow the petition confirming the proposed transfer of registered office from the State of West Bengal to the National Capital Territory of Delhi through alteration of Clause II of the Memorandum of Association of the company. He also emphasized the necessity of shifting of registered office to the National Capital Territory of Delhi, mainly on the grounds that the whole business of the company has been transferred to M/s. Hindustan Lever Limited, as a going concern; it would be beneficial to the members if the registered office is shifted to Delhi as all the members and directors are Delhi based; and that for better administrative control and convenience, the shifting of registered office to Delhi is necessary.
7. On the other hand, the objectors appearing in person, have urged this Bench not to allow the shifting of registered office of the company to National Capital Territory of Delhi as the Court proceedings initiated by them against the company are pending and as such, they will be prejudicially affected by such transfer of registered office Controverting all the allegations of the said objectors, Shri Roy, representing the company, has submitted that the objectors are neither shareholders nor creditors of the company and their objections are baseless, frivolous, motivated and un-sustainable in law and on facts. Moreover, the objectors being ex-employees of the company, were paid off their statutory dues which they had accepted and as such, they are not entitled to voice their grievances before this Bench which is not the proper forum to entertain and adjudicate such wrongful claims of the ex-employees in the instant proceedings under section 17 of the Act. Apart from this, the company is defending the said court cases and pending litigation cannot be a plausible ground which stands in the way of confirming the alteration of situation clause of the Memorandum of Association of the company as mandated by the members of the company in the Annual General Meeting held on 24-9-2004. Thus, the frivolous objections of the ex-employees should be rejected and the petition be allowed in terms of the prayers as sought for therein.
8. This Bench has taken into consideration the contents of the petition and the affidavits in support thereof, objections, counter-replies, oral submissions made by the Authorised Representative of the petitioner as also the objectors appearing in person and the report of the Registrar of Companies, West Bengal (hereinafter referred to as “the ROC, West Bengal”). It is noted that the special resolution has been passed unanimously by the members of the company at the Annual General Meeting held on 24-9-2004 and that the ROC, West Bengal has no objection to the proposed alteration and confirmed that the special resolution has been taken on record. While the decision to shift the registered office of the company to another State being a domestic matter, rests with shareholders, the company is the best judge of how to run its business more economically or conveniently or where to locate the registered office for efficient running of the business, as has been held in various reported decisions of the court. It is rather pertinent to note that neither any member nor any creditor of the company has raised or filed any objection to the company’s proposal.
9. Objections of ex-employees of the company on the ground of pending court cases cannot be said to be a valid ground to stall the shifting of registered office of the company through alteration of situation clause of the Memorandum of Association of the company, as mandated by the members of the company. It is the corporate decision and has no connection with the pending litigation initiated by the said objectors before the Court. Further, the transfer of registered office of the company from the State of West Bengal to the National Capital Territory of Delhi is not in any way going to adversely affect the proceedings of court cases. Facility for litigation cannot also be a ground for stalling the shifting of registered office of the company. It is an admitted position that there is no restraint order from any Court against the proposed alteration of situation clause of the Memorandum of Association. Neither this Bench has been restrained by any order of the Court from proceeding with the petition under section 17 of the Act, nor any thing stands in the way of passing an order by this Bench on the instant petition. Taking into account the above legal position, this Bench finds no substance in the objections raised by the ex-employees of the company and hence, the objections do not survive.
10. This Bench has further noted that the petitioner has duly complied with the provisions of regulation 36 of the Company Law Board Regulations, 1991, and that no objection has been received from anyone in this regard. Although, a copy of the petition was served on the State Government by the petitioner in May, 2005 and notices were issued in June, 2007 and August, 2008, by the Bench Office, neither any one appeared at the time of hearing nor any specific objection has so far been filed by them. This Bench is satisfied that having regard to the rights and interests of the members of the petitioner company (and of every class of them) as well as the rights and interests of the creditors of the petitioner company (and of every class of them), it is just and proper that the petition should be allowed subject to condition that the interest of none of the employees at the registered office of the company shall be prejudiced by retrenchment or otherwise.
THIS BENCH DOTH HEREBY ORDER
That the alteration to the situation clause in the Memorandum of Association of the above named petitioner company proposed by the Special Resolution passed in accordance with section 189 of the Companies Act, 1956, at its Annual General Meeting held on 24-9-2004, (which Special Resolution is set forth in the Schedule hereto) is hereby confirmed.
SCHEDULE
“Resolved that the clause II of the Memorandum of Association of the company be altered by substituting the words “State of West Bengal” by the words “National Capital Territory of Delhi.”