J L MORISON INDIA LIMITED Vs. STATE

JUDGEMENT

(1.) THE petitioner-company has presented this petition under Section 17 of the Companies Act, 1956 (hereinafter referred to as "the Act") to this Bench on March 23, 1998, for confirmation of alteration to the situation clause of the memorandum of association of the company shifting the registered office from the State of Karnataka to the State of West Bengal, as approved by the special resolution passed at its extraordinary general meeting held on February 5, 1998, in accordance with Section 189 of the Act. THE petition came up for hearing from time to time and finally on August 27, 1998.

(2.) Shri Harikrishnan, senior counsel appearing for the company, while initiating arguments reiterated the averments made in the petition as well as the reply to the statement of objections filed by the objectors, to the effect that the company's corporate office is located at Calcutta. The chairman and two other directors are based in Calcutta and more than 44 per cent. of the share capital of the company is held by members residing in the State of West Bengal. The company has suspended its operations at Bangalore for nearly two years and the major products of the company are being manufactured through agencies located at Calcutta- By shifting the registered office, the company will carry on its business more economically, efficiently and profitably achieve its main purpose, enlarge its operations and it will be in the interest of the company, its members and its employees. The company has duly complied with the procedural formalities and requirements as required under the provisions of the Act. There has been no opposition either from shareholders or creditors. The Government of Karnataka has no objection to shifting the registered office from the State of Karnataka to West Bengal. Moreover, shifting the registered office is purely a domestic matter left to the absolute discretion of shareholders of the company. He further pointed out that Pharmaceutical Chemicals and Allied Employees Union, the objectors have misconceived the entire perception of shifting the registered office to the State of West Bengal under the pretext that the cases pending before the courts at Karnataka will be transferred from the State of Karnataka, consequent upon shifting the registered office to the State of West Bengal. In this connection, Shri Harikrishnan categorically made a statement that the company will give an undertaking that all the pending cases before the courts in Karnataka will continue to be heard at Karnataka, and that the company will abide by the decision of the courts with regard to the claims of the employees. He further denied any mala fide intention on the part of the management of the company and accordingly sought for the prayer as made in the petition.

(3.) SHRI R. Yeashod Vardhan, advocate appearing for the objectors, submitted that the Bangalore unit of the company has been doing extremely well and contributed to the most of its turnover. However, the company has gradually stopped its operations at Bangalore and entered into subcontracting arrangements. The management has been adopting anti-labour policy and acting against the interest of the employees. The company has sought permission of the State Government of Karnataka to close down the factory at Bangalore which was not granted by the State Government of Karnataka against which the company has filed a writ petition before the High Court of Karnataka. The management avoids the prescribed legal regime, especially as contemplated by Section 25-O of the