TMI Blog1972 (11) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... y one F.S. Wadia and five other shareholders of the 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y will arrange informal meetings of the shareholders every 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, agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o banks, insurance companies and corporations in U.S.A. and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f shares according to the rights attached to such shares. 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration was fair and equitable as between the members of the company and 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 int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the company has been properly passed and the majority shareholders have in their business wisdom chosen to pass it. I find no substance in the contentions of the opposing shareholders. It was argued on behalf of the opposing shareholders that in case I decided to grant the petition, I should order that for some time informal meetings of the shareholders should be held in Bombay whereat the shareholders would be apprised of the progress of the company. At the annual general meeting of the company held in Bombay on June 28, 1972 the chairman of the company gave this assurance to the shareholders. I see no reason to impose such condition on the confirmation of the resolution In the result, I grant the petition in terms of paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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