H.K.Bose, J. -
(1.)This is an appeal from an order of P. B. Mukharji, J. dated the 1,5th June, 1959 dismissing an application for confirmation of certain alterations in the object clauses of the Memorandum of Association of a company known as Mahaluxmi Bank Ltd.
(2.)The appellant company was incorporated under the Indian Companies Act in 1910 as a company limited by shares to carry on inter alia the business of banking. On 27th February, 1950 by an order made by this Court a scheme of arrangement between the company and its creditors was sanctioned and by the said order the company was prohibited from receiving further deposits or to function as a bank until further orders from the Reserve Bank of India. The relevant portion of that order read as follows:
"And it is further ordered that the said company shall not be entitled to receive further deposits or to function as a Bank until the Reserve Bank of India permits the said Bank to do so."
By a letter dated 20th August, 1953 the company applied to the Reserve Bank of India for permis sion to carry on non-banking business. The Reserve Bank of India by its letter dated the 27th August 1953, stated that if the company desired to convert itself into a non-banking company it should:
(1) pass a resolution declaring in unequivocal terms its intentions to cease carrying on the business of banking;
(2) alter the Memorandum of Association so as to delete therefrom such clauses as enable it to transact the business of banking; and
(3) change its name so as to conform to section 7 of the Banking Companies Act, 1949. In pursuance of these directions of the Reserve Bank of India the company convened two separate meetings of the share-holders and creditors on 28th June, 1954 and 29th June, 1954 respectively to consider the question of conversion of the company into a non-banking company and at both these meetings it was unanimously resolved that the name of the company be changed to Mahaluxmi Loan and Trading Company Ltd., and the object clauses in the Memorandum of Association be altered suitably. Thereafter fay a special resolution of the company passed at an Extraordinary General Meeting of the company held on 14th August, 1954, it was resolved that the objects of the company be altered by aban- doning the object clauses relating to banking and to expand the scope of its object with a view to carry on other non-banking business which under existing situation may conveniently and advantageously be taken up and carried on with its existing non-banking business. On 7th September, 1954, the company made an application to this Court for confirmation of the alteration of its objects as passed by the special resolution dated the 14th of August, 1954 and upon presentation of such application directions were given for proper advertisements and for service of notice on the Reserve Bank of India and the Registrar of Joint Stock Companies, West Bengal. It appears that the Registrar of Joint Stock Companies thereafter filed an affidavit-in-opposition in answer to this application and also appeared at the hearing of the application and opposed the application but on the 25th January, 1955 this Court made an order confirming the said alteration. A certified copy of this order was duly filed with the Registrar of Joint Stock Companies as required under the provisions of the Indian Companies Act and it appears that on the 29th May, 1958, the registration was effected by the Registrar of Joint Stock Companies. The alterations that were confirmed by the order were inter alia as follows:
"1. That the object clauses in the Memorandum of Association of the Company be and are, hereby altered and/or modified as follows: A. Sub-clauses b, g, h, k, n and o of Clause 3 be deleted. B. The following be added in Clause 3 as Sub-clauses b, c, d and e. (b) To borrow or to take deposit of money on interest or otherwise and either with or without security from any person or persons, local authorities, Government and Defence Loan and to deposit or lend any such money or other monies of the company either with. Or without security or otherwise as the Company deem expedient. To raise money by issuing debentures charged upon all or any of the Company's property both present and future and to purchase redeem or pay off any such securities. (c) To carry on the 'business of lending or advancing of money either with or without security and to discount, buy, sell, deal in Bills of Exchange, Hundies, Promissory Notes, shares of Joint Stock Companies and other transferable instruments. To buy, sell or otherwise deal in Bullions, Jewels, Government Promissory Notes, Municipal and Port Trust Debentures, War Bonds, Defence Certificates, Post Office Cash Certificates and like securities,"
It is not necessary to set Out the other sub-clauses of Clause B.
"D. The word "Bank" be deleted and the word "Company" be inserted in its Place wherever it occurs in Clause 3 except in the 4th Line of Sub-Clause (c) of Clause 3 and the word "Banking" in Sub-clause (1) be deleted and in its place the word "similar" be inserted. The word "other" in the 4th line of Sub-clause (c) be deleted. E. That the name of the company be changed to "Mahaluxmi Loan and Trading Co. Ltd."
(3.)On 25th March, 1955 the company applied to the Central Government for approval of the change of the company's name as Mahaluxmi Loan and Trading Co, Ltd. This step was obviously taken in view of the provisions of Section 11 (4) of the Indian Companies Act 1913, which provides that "any company may by special resolution and subject to the approval of the Central Government signified in writing change its name," and which corresponds to section 21 of the Companies Act of 1956. The Central Government by its letter dated the 13th of December, 1958 suggested that Sub-clauses 3 (b) and 3 (c) of the object clauses should be suitably altered as to eschew the business of banking and to apply thereafter for change of its name. The relevant portion of the letter dated the 13th of December, 1958 may be set out hereunder.