TMI Blog1952 (3) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... leave, and thereafter the leave is revoked, the court will have no jurisdiction to try the suit. The revocation of leave deprives the plaintiff of his right to have his suit tried by the court of his choice. The matter, therefore, is very serious to the plaintiff. The granting and revocation of the leave is a matter in the discretion of the court, to be exercised on well-established judicial principles. In our court the practice is that such leave is asked for at the time of the presentation of the plaint to the Master. The Master goes through the plaint, and if he finds that the allegations in the plaint require that such leave should be obtained, he makes an endorsement on the plaint to the effect that such leave has been asked for. Then the plaint is presented before a Judge of this court sitting on the Original Side for the grant of the leave. The Judge after perusal of the plaint grants such leave if he thinks fit. But the whole thing in the first instance is done ex parte, and naturally so, because until the leave is granted, there is no suit filed, and therefore no question arises as to hearing the defendant on an application for granting the leave. If the defendant i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace, Calcutta, within the said jurisdiction. Thus, the plaintiffs, defendants 1, 2, 5 and 6 either reside or carry on business within the local limits of the Ordinary Original Civil Jurisdiction of this court. The other defendants, six in number, are described in the cause title as either being residents of, or carrying on business at, places outside the said jurisdiction. Hence, according to the plaintiffs, was the necessity for obtaining the leave. The plaintiffs' case as pleaded in the plaint shortly put is as follows: Prior to September 25, 1947, two directors of the company, called the managing directors, were in charge of the management of the affairs of the company. They have since retired. Some time prior to February, 1947, the defendant Hanuman Prasad Dhanuka and two Nepalese gentlemen entered into a partnership for the purpose of buying the majority of the shares of the defendant company with a view to get a controlling power in the affairs of the company. Pursuant to the agreement, the partners acquired 19,540 preference shares and 5,085 ordinary shares of the company. As the preference shares carry with them the right to vote, it is alleged that the three partners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... radical change would be made in the articles of association nor any extra provision would be made in respect of the remuneration, and terms of appointment, of the managing agent. The changes in the articles made at the meeting held on October 29, 1947, are large in number; two of them at least are very important, namely, relating to (1) the appointment of the managing agent and (2) the voting right. Under the old articles, each share carried with it the right to vote. Under the new article that was not so. The old article 97 read as follows: "97. On a show of hands, every member present in person shall have one vote, and upon a poll, every member present in person or by proxy shall have one vote for every share held by him, provided that no company shall vote by proxy so long as a resolution of its directors under the provisions of section 80 of the Act is in force." The new article which replaces the old article reads: "99. Subject to any special rights or restrictions as to voting upon which any shares may be held on a show of hands, every member present in person or by general proxy (as defined by article 103 hereof but who is not a member of the company or who is a mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable for inspection at the office, meaning the registered office of the defendent company, which is at Kanpur. The plaintiffs claim various reliefs, inter alia, a declaration that the special resolutions Nos. 1 and 2 passed on 20th October, 1947, are void, inoperative and should be set aside. There is no dispute in this case between counsel who appear for the parties that that is the main prayer. The other reliefs claimed in the plaint follow as a matter of course. Indeed it has been admitted by the counsel for the plaintiffs who are the appellants before us, that this declaration is the real relief claimed. The defendant company was under no misapprehension as to the contents of the plaint and the nature of the relief claimed. In the defendant company's petition for revocation, it summarises the plaint as follows: "The plaint alleges (1)that the appointment of the selling agents and the managing agents was not in the interest of the company; (2)that the articles were altered to stifle the minority; (3)that due notice of the changes proposed to be brought about in the articles was not given to the shareholders; (4)that the full terms on which the managing agents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Kekewich, J., in Normandy v. Ind. Coope Co., the notice should call attention to any material alterations and in Baillie v. Oriental Telephone and Electric Co., the Court of Appeal (in England) held that the notice of a proposed resolution to alter articles involving a large increase in the remuneration of the directors was invalid on the ground that the proposed increase was not fully and frankly disclosed". In Baillie's case, a shareholder brought an action on behalf of himself and all the other shareholders of a company for a declaration that certain resolutions were not binding on the ground of insufficient notice of the meeting at which they were passed, and for an injunction to restrain the company and the directors from acting upon them. The plaintiff moved for an interim order. The Court of Appeal held that the notice did not give a sufficiently full and frank disclosure to the shareholders of the facts upon which they were asked to vote; and that the resolutions were invalid and not binding upon the company. Baker, J., considered this case in Narayan Lal v. Maneckji Petit Manufacturing Co. Ltd., and also reviewed other English cases. In that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meeting should state that fact. But nowhere did he say that it was not necessary to send copies of the new proposed regulations with the notices. On the other hand, from the latter passage which I have quoted, it is clear that the learned author said that in some cases it was expedient to send printed copies of the proposed new articles with the notices and he has cited two English cases for that proposition. Assuming, however, that Mr. Plamer's observation supports Mr. Mitter's contention, it may not be possible for us to adopt that view in India, having regard to the local conditions and a variety of other considerations that prevail in India. It will not in all cases be sufficient in India to leave a copy at the registered office and state that fact in the notice, inviting the shareholders to inspect the proposed changes at the registered office. The travelling facilities here are not the same as in England, neither the country is so small as England. There are various difficulties that prevent the shareholders from going to the registered office and having inspection. Besides whether such a course should be adopted or not depends on the facts of each case. For example, it may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eans and includes the suggestion as a fact of that which is not true by one who does not believe it to be true; the active concealment of a fact by one having knowledge or belief of the fact. A fraud may consist of the suppression of what is true as well as the representation of what is false. Therefore, it can be fairly argued that this notice comes within the mischief of Baillie's case ( supra ) and may be called a 'tricky' notice. The main question then is: Has any part of the cause of action arisen within the jurisdiction of this court? For, if no part of the cause of action has arisen within that jurisdiction, leave or no leave, this court cannot entertain or try the suit. On this part of the case, Mr. Mitter's contention is that no part of the cause of action arose within the jurisdiction of this court and consequently the learned Judge was right in revoking the leave which the plaintiffs obtained by representation that a part of the cause of action had arisen within the jurisdiction. Let us analyse the position. (1) The plaintiffs are shareholders of the defendant company, however small their shares may be. (2) They reside within the jurisdiction of this court. (3) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post." What does this mean? It means that if a notice is sent by post, the service of it shall be deemed to have been effected at the time when in the ordinary course of post the letter would be delivered. If the company proves the posting of the notice, it has not to prove the service. The court is to presume that the addressee has received the letter when it should have been delivered to him in the ordinary course of post. The word "deem" is significant. What does it mean? It means "to think of as existing": "to believe a thing to be true till the contrary is proved." The articles only raise the presumption as to the time of service and not the place. The presumption only goes this far and no further: namely, until the contrary is proved, it should be presumed that the addressee received the notice at the time when the letter would be delivered to him in the ordinary course of post. That is all. But the question arises, where did the service take place? At Kanpur or in Calcutta? Neither the regulations nor the articles on which Mr. Mitter relies give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... succeed. It has no relation whatsoever to the defence which may be set up by the defendants. The test for determination of what a cause of action is, has been thus stated by Rankin, C.J., in Engineering Supplies Ltd. v. Dhandhania Co. "The only definition that will work, if it has to be applied to cases of all kinds, is the entire set of facts that gives rise to an enforceable claim, or in the words of Fry, L.J., 'everything which if not proved gives the defendant an immediate right to judgment'; every fact which is material to be proved to entitle the plaintiff to succeed, every fact, which the defendant could have a right to traverse." Now, apply this test to the present case. The plaintiffs must prove in order to succeed: (a) that they received the notice; (b) that the notice did not disclose all the material facts. Where was the notice received? The answer must be, in Calcutta. Where was the misrepresentation made? It must be in Calcutta. These two facts are material to be proved and they must be proved by the plaintiffs; otherwise the defendant company would be entitled to get judgment in its favour forthwith. There cannot be any doubt, therefore, that a part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comparative expenses are material considerations. But mere balance of convenience is not enough. It must be proved to the satisfaction of the court that either the expenses or the difficulties of trial in this court are so great that injustice will be done to the defendant. But at the same time the court ought not to exercise the jurisdiction, if by so doing an injustice is caused to the plaintiff." Unless the inconvenience is so great as to cause injustice to the defendant, the leave granted by the court should not be revoked. In another case, Bhualka Bros. Ltd. v. Gobindram Bros. Ltd., the learned Chief Justice observed: "The plaintiff is the dominus litis and has the right to choose his own forum. This right of choice is, however, not absolute, and the court has the power in a proper case to interfere with the plaintiff's choice and revoke leave if the court considers that the forum has been chosen by the plaintiff mala fide or that the forum chosen is such that if the court permits the suit to go on, the other party would be so handicapped in his defence that it would lead to injustice or that the balance of convenience is decidedly or overwhelmingly against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling agency agreement, the managing agency agreement. The rest is a matter of inference. On this part of the cause of action also, prima facie, no witness nor any books of account need be brought down from Kanpur. That being the case, we are unable to agree with the learned Judge that the convenience of the trial being held at Kanpur is so great that the leave should be revoked. Mr. G.K. Mitter may be right in his criticism of the plaint that it contains many paragraphs not strictly relevant. But it is not for us at this stage to enter into a critical review of the plaint or the allegations it contains. I have not overlooked the fact that the revocation of leave was entirely a matter of discretion with the learned Judge and a court of appeal would be very slow to set aside the discretion, unless it is proved that he has misdirected himself as to the facts or on the law. It may be that the court of appeal does not see eye to eye with the trial Judge in such a matter. But that is no ground for setting aside the discretion exercised by the learned trial Judge. But in this case, with great respect to the learned Judge, we think there has been a misdirection as to the facts and ..... 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