TMI Blog1999 (3) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholder of Herbertsons Limited, which has filed C. P. No. 67 of 1998, alleging acts of oppression and mismanagement in the affairs of BDA Limited. The applicant is not a shareholder of BDA, which is a wholly owned subsidiary of the petitioner-company. According to the applicant, besides its holding of about 3.5 per cent shares in the petitioner-company, it has also the support of shareholders holding further about 40 per cent shares in the petitioner-company. The contention of the applicant is that the petition has been filed by the petitioner-company without taking into confidence the shareholders holding substantial shares in the company and as such the applicant should be impleaded as a party to the proceedings to bring out relevant facts. 3. Shri Subramanian, advocate appearing for the applicant, viz., Sringray Traders Private Ltd., submitted that the applicant together with supporters control majority voting power in the petitioner-company and the petition has been filed by the board, controlled by minority shareholders holding about 36 per cent shares for collateral purposes. The applicant and the supporters are not supporting the petition as many relevant facts have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company. Under these circumstances, he submitted that no shareholder can require the board to do or not to do something. The board of the petitioner-company, being the holding company, has taken a decision to file the petition and the wisdom or otherwise of the board cannot be questioned by a shareholder. He submitted that for being a party to the instant proceedings, such a person should be either a shareholder of BDA or against whom certain reliefs have been sought in the petition. The applicant is neither a shareholder of BDA nor any relief has been sought against the applicant or its supporters. He also referred to Virbhadrappa Shilvant v. Shekabai Harun Sayed Ahmed Arab, AIR 1939 Bom 188, and Aiyasha Begum v. Kapurchand Rahmal, AIR 1972 Bom 145, to point out the circumstances under which one could be considered to be either a necessary or a proper party. According to him, the applicant does not satisfy the requirements of either being a necessary or a proper party and as such has no locus standi to get impleaded in the proceedings. 6. We have considered the arguments of counsel. It is an admitted position that the applicant is not a shareholder of BDA against which this p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich could be exercised by the board independently, those which could be exercised with the approval of the general body and those which are in the exclusive domain of the general body. Initiating legal proceedings is within the independent powers of the board. Further, not only the Companies Act but all other statutes dealing with incorporated companies, whether criminal or civil, always recognise the board of directors as the one responsible for conducting the affairs of a company. As rightly pointed out by learned counsel for the petitioner-company, not only Section 291 of the Companies Act authorises the board to do every thing in the name of a company, article 161 specifically empowers the board to initiate proceedings in the name of the company. Shri Sarkar's reference to Balmford v. Balmford [1969] 1 All ER 969 (CA) and submission that as a corollary, action taken by the board without the shareholders' approval can also be questioned, we are afraid cannot be accepted since the members of the board are the elected representatives of the shareholders and whatever powers the board enjoys in terms of the provisions of the Act and articles, the same cannot in normal circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -company is decided in the Bombay High Court, Shri Faizullabhoy, advocate appearing for the applicant, submitted that in the last annual general meeting of the petitioner-company, resolutions have been moved for removing some of the directors and for induction of directors from the applicant's group and votes polled in respect of these resolutions have been kept in a sealed cover as per the directions of the Bombay High Court and that the matter is coming up before that court in the first week of March, 1999. Since the applicant and his associates hold majority shares in the company and have voted in respect of all these resolutions, on declaration of the results, the applicant group will become majority directors in the petitioner-company and they may not like to pursue the petition. Therefore, he submitted that the hearing of the petition be deferred till the outcome of the Bombay proceedings is known. 10. Shri Andhyarujina, senior advocate, submitted that in the Bombay proceedings, BDA is not a party and that the only issue under challenge in those proceedings is about the legality of acquisition of shares by the applicant and his group and as such there is no need to kee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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