TMI Blog1979 (2) TMI 174X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned trial judge will remain stayed subject to the following modifications : 1.The special officer, Mr. T.P. Das, appointed by the learned trial judge at the remuneration fixed by him will be present at each board meeting of the company as an observer. He will, however, have no right to participate in the deliberations of the board meeting or to cast any vote in the same. 2.The order of the learned trial judge superseding the board is stayed in its entirety and the board will continue to function in the usual way. If at any such board meeting, there is any dispute between the members of the board, all such disputes should be referred to the special officer, who will be present at such board meeting as observer, and the special officer will submit a report to the court with his comment." By another order dated March 14, 1978, the original appellants Nos. 3, 4 and 5, Bimal Kumar Hoare, Nirendra Nath Bagchi and Samarendra Nath Sen Gupta were transposed from the category of appellants to the category of respondents. Out of them, Bimal Kumar Hoare and Samarendra Nath Sen Gupta are two of the petitioners in the instant application. Mr. T.P. Das, the special officer, has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer at his residence. The special officer was directed to preside over the meeting. On 25th August 1977, the appeal court, inter alia , gave liberty to the special officer to fix time for holding the adjourned annual general meeting. By an order dated September 23, 1977, the appeal court, inter alia , directed that the adjourned annual general meeting would be held on the 3rd of February, 1978, and notice of such meeting would be served on all members whose names would appear in the share register on 23rd December, 1977. The appeal court directed that the notice of the meeting would be settled by the special officer. By another order dated December 20, 1977, the appeal court extended the time to hold the adjourned annual general meeting until March 25, 1978, and directed the filing of fresh nomination by February 15, 1978. On February 14, 1978, pursuant to the directions contained in the order dated 23rd December, 1977, fresh nominations proposing the names of (1) Naresh Chandra Das Gupta, (2) Koushik Kumar Neogi, (3) Sukumar Ray and (4) Sunil Kumar Ray, inter alia , were filed with the special officer at his residence. By an order dated March 14, 1978, the appellate court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Rabindra Nath Sen Gupta filed two nominations proposing the names of Sukumar Ray and Sunil Kumar Ray with the special officer at his residence. On or about 23rd June, 1978, Kalyan Kumar Neogi issued a notice dated 27th May, 1978, convening an annual general meeting of the company for the year 1974-75 on July 3, 1978, at the registered office of the company. By the said notice, the shareholders of the company were directed to submit their proxies and fresh proxies at the residence of Mr. T.P. Das, the special officer. The said notice intimated that Shri T.P. Das will preside over the meeting pursuant to the order of the court and nominations for the office of directors were to be submitted at the residence of the special officer at 63, Sarat Bose Road, Calcutta. On June 29, 1978, by an order made by Salil K. Roy Chowdhury J. in the company petition filed under section 155 of the Act (Sunil Kumar Ray v. Debijhora Tea Company Ltd.) it was directed to hold the meeting called to be held on July 3, 1978, for the purpose of adjournment for a period of a fortnight. In pursuance of the said order, the annual general meeting was held on July 3, 1978, for the purpose of adjourning the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings and resolution passed therein to be void and of no effect and injunction restraining appellant No. 2 and the respondents Nos. 1, 4, 6 and 11 from giving any effect to or acting in furtherance of the resolution passed at the annual general meeting of the company for the year 1974-75, held on July 17, 1978. Mr. Sankar Ghosh, learned counsel appearing on behalf of the applicants, challenged the validity of the said annual general meeting on the following grounds : Nomination for office of the director under section 257(1) of the Companies Act, 1956, have to be left at the registered office of the company not less than 14 days before the meeting under article 121(1) of the articles of association of the company read with section 257(1) of the Companies Act. Company's registered office was at all material times and still is at Gurjonjhora Building, Jalpaiguri. In any event, the premises No. 63, Sarat Bose Road, Calcutta 25, has never been the office of the company. All nominations filed at No. 63, Sarat Bose Road, Calcutta 25, have been filed in violation of article 121(1) of the articles of association of the company and the provisions of section 257(1) of the Companies Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd June, 1978, was issued by Kalyan Kumar Neogi giving the names of the persons whose names were proposed as candidates for the office of directors of the company along with the names of the proposers. The said notice mentioned that the names of Shri Sukumar Ray, Shri Sunil Kumar Ray, Sri Koushik Kumar Neogi and Naresh Chandra Das Gupta would be proposed by different shareholders for the office of the directors of the said company at the adjourned annual general meeting of the company to be held on 3rd July, 1978, at 10-30 a.m. at the registered office of the company. Mr. T.P. Das in view of the order dated 7th June, 1978, was not c ompetent to preside over the said adjourned annual general meeting held on July 17, 1978, in clear breach of the provisions of the Companies Act, as well as the articles of the company under which only the chairman of the board of directors and failing him any director present at the meeting and chosen by the shareholders and failing that any member chosen by the members present would act as chairman of the annual general meeting. Mr. Ghosh further submitted that even if acquiescence was made by the petitioners in the instant application to the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered in terms of article 98 of the articles of the company. Mr. Sen further submitted that the articles constituted a contract between shareholders and company and the shareholders and company can, if they so choose, vary the contract. In any event, the court had ample jurisdiction and power to override the statute in regard to the formalities of calling a meeting in this matter wherein all the orders were made by the court under sections 397 398 and 402 of the Companies Act. Thus, the court could appoint a special officer under sections 397 and 398 and give directions regarding the holding of annual general meeting. Such directions might contravene the special provisions of the Act, e.g. , section 186. In the instant case, according to Mr. Sen, direction was given by the trial court and the appellate court that the share register of the company would be in the custody of the special officer. It was also directed that the proxies should be filed at the residence of the special officer. The board of directors of the company on 27th May, 1978, settled the notice of the adjourned annual general meeting prior to the order dated 7th June, 1978, on the basis of the previous ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 25th of May, 1978. Petitioners were present at the board meeting and pursuant to the said notice and the notes contained therein, Rabin Sen Gupta filed 2 nominations for Sukumar and Sunil with the special officer on 15th of June, 1978. They also, according to Mr. Sen, sought direction from the learned trial judge for filing proxies with the special officer at the meeting. Mr. Sen relied on article 121 of the articles of association of the company and Catesby v. Burnett [1916] 2 Ch 325 (Ch D). According to Mr. Sen, Mr. T.P. Das, the special officer, presided over the meeting in terms of the order dated 27th May, 1977. When the notice for the adjourned meeting was settled no objection was taken to it which said that the special officer would be presiding over the meeting. The notice dated 27th May, 1978, convening the meeting shows that Mr. Das would preside over the meeting. Pursuant to the said notice the adjourned meeting was held on 3rd July, 1978, under the presidency of Mr. Das. No objection was taken. Mr. Das was empowered to preside over the meeting by the order of the court. So there was no illegality. Ray's group are in a minority. The shareholding of them is 11,000, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held on 17th of July, 1978, cannot be said to be illegal, in our view. The adjourned general meeting was held pursuant to the notice dated 27th of May, 1978, on 3rd of July, 1978, and was adjourned to 17th of July, 1978, in accordance with the order dated 29th June, 1978, passed by Salil K. Roy Chowdhury J. The meeting on that day, i.e. , on the third of July, 1978, was specifically adjourned till 17th of July, 1978, at the same time and place. In terms of the different orders of the court, Mr. T.P. Das had the power and authority to preside over the said meeting. The petitioners were parties to the notice dated 27th of May, 1978, which specifically stated that the special officer would preside over the meeting and they cannot be allowed to challenge such presiding over by the special officer at the adjourned annual general meeting for the year 1974-75. In fact, the order of the appellate court dated 17th of May, 1977, specifically and unequivocally directed that the special officer would preside over the adjourned annual general meeting for the year 1974-75. Objection was raised at the meeting of the board which was held on 27th of May, 1978, that fresh nomination papers cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the records that the registered office was not closed as alleged on the date of the meeting and members filed proxies with the special officer at the meeting in terms of the order dated 14th of July, 1978, passed by Salil K. Roy Chowdhury J., at 4 p.m. It should be noted that at the time there was no secretary of the company and the board of directors had all the power and authority to authorise Kalyan Kumar Neogi, the assistant secretary, to issue the notice on behalf of the board. In the premises, the notice dated 27th of May, 1978, is legal and binding upon all concerned. The order dated 7th of June, 1978, as already stated, does not appear to us to have done away with all the previous directions of the court for conducting the adjourned annual general meeting or the filing of the proxies or nominations. It merely extended the time to file nominations for election of the office of directors. Under sections 397 and 398 read with section 402 power has been conferred upon the court "to make such orders" as it thinks fit. The power conferred upon the court by the above-mentioned sections is very wide and object or objects sought to be achieved by the exercise of such power ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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