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2013 (2) TMI 393 - HC - Companies LawAlteration in Articles of Association - Respondent No. 3-association was granted license under section 25 and as per license condition, no alteration could be made in Articles of Association unless alteration had been approved by Central Government - Alteration made to Articles of Association of respondent had been approved but according to petitioner-members their representation was not considered - Petitioner sought for quashing of approval and mandamus to grant fair hearing to petitioner - petitioners were called upon to explain the delay and laches in approaching the Court - Held that:- Even if the petitioners have accepted by participating in elections prior to filing of the writ petition, still, the delay and laches of ten months will not stand in their way to legitimately question the altered AOA being in contravention of provisions of the Companies Act, 1956, as section 9 mandates that the Act overrides the Memorandum, Articles, etc. to the extent they being repugnant to the provisions of the Act. So, respondent's plea of delay, laches and acquiescence is repelled. As Petitioners' representation was not considered while granting impugned approval it is deemed appropriate to direct second respondent to provide a post decisional hearing to petitioners or their authorized representative on their representation within a period of six to eight weeks and to pass a speaking order on the aforesaid representation while returning a positive finding as to whether the alterations in Articles of Association impugned are repugnant to sections 255 and 256 and as to whether reliance upon section 263A and section 265 by the third respondent, justifies the impugned approval or not. Such a course is adopted as principles of natural justice mandate hearing and disposal of objection prior to grant of approval in question. A writ Court would refrain to dwell upon the soundness of impugned alterations in Articles of Association by requiring the competent authority to certify compliance of section 9 by effectively meeting the objections of petitioners. If the second respondent comes to a conclusion that the impugned approval is in violation of any provision of the Companies Act, 1956 then the second respondent would be well within its rights to withdraw the impugned approval but only after affording an opportunity of hearing to the third respondent.
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