DEUTSCHE BABCOCK POWER SYSTEMS LTD 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 April 28, 1998, for confirmation of the 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 Tamil Nadu as approved by the special resolution passed in accordance with Section 189 of the Act at its extraordinary general meeting held on January 27, 1997.

(2.) Mr. K. Krishnamurthy, practising company secretary and authorised representative for the petitioner, while reiterating the averments made in the petition as well as reply to the statement of objections filed by Power-max India Private Limited (hereinafter referred to as "the objector") to the effect that the company incorporated in the year 1988 is having its registered office in Bangalore. The company carrying on the business of designing, selling and manufacturing of heat exchangers has established its manufacturing facility at Chennai. The company is expecting substantial growth in catering to the needs of infrastructure industries such as power, fertiliser and refinery sectors. It will be convenient to the company to co-ordinate and follow up with the works and other statutory bodies, provided the registered office is shifted to Chennai. He further submitted that with the transfer of the registered office to Chennai, the company will easily deal with customs authorities, saving the expenses and time. The interest of none of the employees of the company will be affected by the proposed shifting of the registered office of the company as the factory and registered office of the company will be at one and the same place, i.e., at Chennai. He has further submitted that the company has duly complied with the procedural formalities and requirements as required under the provisions of the Act. There has been no opposition from the shareholders or creditors, save the objector hereabove. The Government of Karnataka has no objection in shifting the registered office from the State of Karnataka to Tamil Nadu. Moreover, shifting the registered office is purely a domestic matter left to the absolute discretion of the shareholders of the company. He pointed out that a sum of Rs. 11,205 alone was due to the objector as per the books of account of the company, which was also subsequently paid by the company by cheque No. 812314, dated September 9, 1998, drawn on ANZ Grindlays Bank in favour of the objector. At present, the company does not owe any money to the objector. The amount of Rs. 89,89,447.29 said to be due to the objector is in relation to a certain transaction between the objector and International Development and Engineering Associates Limited (IDEA), a group company of the petitioner. The alleged transaction is not between the company and objector. The objector cannot have any remedy for the said sum of Rs. 89,89,447.29 against the company. Shri Krishnamurthy relied on Symphony Comfort Systems Ltd., In re [1998] 91 Comp Cas 404 (CLB) to state that the Company Law Board cannot adjudicate claims and counter-claims between the company and its objector creditor. In the circumstances, he sought for the prayer as made in the petition.

(3.) AFTER considering the pleadings and arguments of both the authorised representatives for the petitioner and objector, the issue that arises for consideration is whether this Bench shall confirm alteration to the situation clause of memorandum of association of the company on the facts and circumstances of the case.