TMI Blog1974 (1) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... were fully paid up and 1,000 preference shares were also paid up. The object of the company was manifold and we will deal with the same at the appropriate place. The company was supplying electrical energy in and around Narasaraopet. While the company was carrying on its business, the entire undertaking of the company was acquired on February 26, 1951, by the then Government of Madras. The company was awarded compensation of Rs. 1,06,977. It was alleged in the company-petition that the company has no other assets apart from the compensation amount. The 2nd respondent to the petition (who is the managing director of the company on a remuneration of Rs. 250 per month from 1962) , has been engaging himself in fruitless litigation. The 1st petitioner, therefore, compelled the managing director, respondent No. 2, to call for a meeting for the voluntary winding-up of the company. The meeting was, accordingly, called on August 18, 1968. There was, however, no quorum. Since the company has ceased to do any business since 1951 when the entire undertaking was taken over by the then Govt. of Madras, and since there was no possibility of the company doing any business in future, the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he received the proxies on the morning of January 10, 1974. Those proxies were presented on January 10, 1974, itself at 4 p.m., but the managing director of the company, although (he) received the proxies, objected to their presentation. His complaint appears to be that he was not allowed to vote on behalf of the two respondents, on whose behalf he held the proxies. Under the proviso to sub-section (1) of section 176 of the Companies Act, a proxy shall not be entitled to vote except on a poll. Sub-section (3) of that section also makes it clear that the proxies must be filed at least 48 hours before the meeting is held. The complaint of the said advocate that he was not allowed to vote has, therefore, no substance because he had not demanded any poll, nor was there any possibility of setting forth such a claim, because he was the only man differing with the views expressed by the 5 other shareholders who were present, apart from the proxies supporting the same view. Those proxies also were not received in time. The aforesaid meeting was, however, convened only to find out the views of the shareholders, and we are satisfied that the view expressed at the said meeting, indicated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 10, 1968. From 1968 onwards, therefore, no question of carrying on any other business could arise. It, however, appears that on January 17, 1969, another meeting of the shareholders was held. The said meeting was informed that a petition to wind up the company had been filed. The meeting, therefore, had to be adjourned without transacting any business, in view of the petition for winding up, filed in this court. It is also pertinent to note that, after the business of energy supply to Narasaraopet was taken over by the Government, the question of fixation of compensation and its payment took a considerable time. The compensation was received only in 1963. It is also relevant to note here that the respondent herein, who holds preference shares, was the director of the company till 1965. What attempts, as the director of the company, he made to commence any other business, is not clear. The only period which, therefore, remains to be considered is, from 1965 to 1968, when the present proceedings commenced. There is no explanation on either side as to why the meeting could not be held ? No attempt seems to have been made to call the meeting. But, it is also clear that the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the several other general objects mentioned in the objects clause were independent of each other and, therefore, each of them had to be treated as principal and independent object. Repelling the contention of the petitioners in that case, the learned judge observed that (Headnote of AIR): "The existence or non-existence of a concrete scheme at the time the petition comes before the court, is wholly irrelevant". He further said (AIR Headnote at p. 134): "Where one of the objects of the company of supplying electricity at Akola, which was the only business that the company was carrying on, had failed by reason of the fact that the period of licence to run the company granted by the Government had expired and the undertaking was taken over by the Government, and there were other independent objects mentioned in the memorandum of the company, and it was not established that there was no chance of carrying on the objects, it cannot be held that the substratum of the company had disappeared". This case seems to us to be on all fours applicable to the facts of the present case. In this case also, although the Narasaraopet electric supply business was taken over by the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wishes of the shareholders expressed in the meeting held on January 10, 1974, and also in view of the fact that the substratum of the company still exists, we have no doubt whatsoever that it would not be just and equitable to direct the winding-up of the appellant-company. With due respect, therefore, to the learned judge, who took a different view, we are unable to share either the reasoning or the conclusion of the learned judge. It was contended before us that if clause ( f ) of section 433 is not applicable, we should direct the winding-up of the company under clause ( c ) of section 433. That clause permits the court to direct the winding-up of a company, where the company has suspended its business for a whole year. We do not think that clause ( c ) is applicable to the present case. The business which the appellant-company was carrying on, was taken over by the Government, and before it could start any other business, as mentioned in the objects clause of the memorandum of association, the company got into litigation and then, the winding-up proceedings. Since no new business, according to the objects of the company, was started, no question of its suspension for a whole ..... X X X X Extracts X X X X X X X X Extracts X X X X
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