ESTATE Vs. STATE

JUDGEMENT

(1.) This is a petition for confirmation of a special resolution proposing alterations and additions of the company's objects. If raises questions of practice with regard to petitions under Section 12 of the Indian Companies Act (VII of 1913). This section corresponds to Section 5 of the English Companies Act, 1929. Under the Indian Act, and also under the English Companies Act, 1929, the alteration of the company's objects does not take effect until it is confirmed by the Court. The law has now been changed in England. Under Section 5 of the English Companies Act, 1948, the alteration takes effect without confirmation by the Court except where an application is made for cancellation of the alteration. Under the English practice before 1948 a summons for directions had to be taken out in every case immediately on the presentation of the petition. On such summons, directions for advertisements, services of notices, settlement of lists of creditors where necessary and other necessary directions were given. This practice was embodied in the Rules of the Supreme Court, Order 53B, Rules 5(a), 10 and 11. Having regard to the alteration of the law in England in 1948 there is now no necessity there for presenting a petition (sic) confirmation of the alteration and consequently no necessary (sic) taking out a summons for directions. The old R. (sic) 53B has been replaced by a new Order.

(2.) There has been no change of law in our country. The company may by special resolution alter the provisions of its memorandum with respect to its objects but the alteration cannot take effect in this country even now until it is confirmed by the Court on petition.

(3.) The foundation of the jurisdiction to confirm the alteration is the passing of the special resolution. There must be strict evidence that meetings have been duly convened and that the special resolution has been duly passed. In Re: Omnium Investment Company, 1895 2 Ch 127 and In Re: Debenture Corporation, Ltd,1931 47 TLR 399.