S.B.Capoor, J. - (1.) This is a petition by the Ambala Electric Supply Company Ltd. (hereinafter called the 'company') under section 17 of to Companies Act 1956, for confirming a special resolution passed under section 189 of the Act at a general meeting of the company held on the 10 Oct. 1962, whereby certain additions to its memorandum of association were approved. The copy of the minutes of the proceedings of that meeting is annexure 'D' and the special resolution appears at item No. 1 of this annexure as approved by the shareholders on that day. The petition was advertised by issue of citation in the Tribune, Ambala, which citation had duly appeared in the issue of that paper on the 16 Dec. 1962, and a notice was also issued to the Registrar of Companies. The petition is opposed in the written statement submitted by the Registrar of Companies and there is no other opposition whatever to the petition.
(2.) The facts as given in the petition and as amplified in the counter affidavit of Bhagat Jaswant Singh, a director of the company, in reply, to the affidavit of the Registrar of Companies are not really in dispute and are as follows. The company was registered in the year 1931 as a company limited by its shares. Its issued capital is divided into 50,000 ordinary (equity) shares of Rs. 10 each. A printed copy of the memorandum and articles of association (annexure 'B') has been put on the record and the object for which the company was formed are set out in clause III in the memorandum of association and the sub-clause are reproduced in extension in paragraph 4 of the petition. In sub-clause (i) it is stated that one of the object was to carry on the business of electric engineers, electricians, engineers, constructors, manufacturers, etc., and to general, accumulate, distribute and supply electricity for the purposes of light, heat, motive power, etc. In sub-clause (2)(a) the object as stated was to acquire concessions and licenses for any electric installation for the production, transmission or for use of the electric installation for the production, transmission or for use of the electric power for various purposes while the object mentioned in sub-clause (2)(b) was to acquire from the Punjab Traders, the Ambala City Electric License, 1932, which had been obtained by them from the Punjab Government. Sub-clause (3) and (14), on which particular reliance has in this connection been made on behalf of the petitioner, is given below in extenso: "(3) To acquire by purchase or otherwise, construct, equip, maintain and improve, work, manage or control or aid, or subscribe towards the acquisition, construction, equipment, maintenance, improving, working, management or control of works, undertakings and operations of all things, both public and private, which may seem to the company capable of being conveniently carried on in connection with the above, or calculated directly or indirectly to enhance the value of or render profitable any of the company's property or rights, and in particular carrying on undertaking by land or water, railways, tramways, roads, telegraphs, telephones, cables, launches, boats barges, and conveyances, lighters, ferries, harbors, piers, docks, quays, wharves, warehouses, bridges, viaducts, aqueducts, reservoirs, embankments, water works, water courses, canals, flumes, irrigation, drainage, saw mills, iron, steel engineering and implement works, hydraulic works, gas works, electric light works, quarries, collieries, foundries, furnaces and factories of all kinds." "(14) To receive money on deposit and to lend money to any company partners, associations or persons either with or without security and conditions and generally upon such terms that the directors may deem expedient, and to deposit money with bank on interest or otherwise and to run banking accounts as the directors deem expedient."
(3.) The company after its incorporation continued to conduct the generation and distribution of electricity to the town of Ambala City. The license for that purpose was to expire on the 4 July 1962, and it appears that some time in the year 1956, the company obtained its bulk power from the Bhakra Nangal Hydro Electron Grid and its activity so far as it pertained to the electricity ceased while the distribution of electricity in the area under its license continued. Its motor and the power house ceased to be of any utility and for properly utilising them and, for augmenting its income the company started a cold storage plant. This business was started with effect from the 1 April 1956, after passing a resolution on the 30 Nov. 1955, a copy of which was filed in the office of the Registrar of Companies by the company's office letter No. 2975/55 dated the 3 Dec. 1955 (copy annexure 'G'). The Registrar of Companies in his reply dated the 14 Dec. 1955 (copy annexure 'H'), asked the company to supply him with a copy of the memorandum of association in order to enable him to see if the work contemplated by the company was within its objects as provided in the memorandum of association. The company in its letter dated the 14 Jan. 1956 (copy annexure 'I') informed the Registrar of Companies, inter alia, as follows: "Clause 3 provides that the company can undertake any work which is calculated directly or -indirectly to enhance the value of or render profitable any of the company's property. The huge power house building with big tanks and water works system have been rendered surplus on buying power from hydro project. If this property is not employed for any profitable use it is likely to become a liability. The proper utilisation of the surplus property can only be effected by the installation of cold storage.";