TMI Blog1982 (6) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... imited by shares. Defendants Nos. 2, 3 and 4 at all material times were and still are directors of defendant No. 1 and the petitioner along with the said directors constituted the board of directors of defendant No. 1. The petitioner and defendants Nos. 2 and 4 were the first named directors of the company in its articles of association. According to the petitioner, he was duly appointed as the managing director of defendant No. 1 by the board of directors for the initial period of three years with effect from June 1, 1978, and subsequently from June 1, 1981, he was duly appointed as the managing director of the defendant on various terms and conditions as set out in paragraph 9 of the petition. Since June 1, 1976, the petitioner has been duly acting as the managing director of defendant No. 1 and performing his duties as such. It was the petitioner's case as made out in the petition, that on May 23, 1982, the petitioner for the first time came to know from an advertisement caused to be published by the defendants in an issue of Amrita Bazar Patrika, dated May 16, 1982, that a resolution had been passed at an extraordinary general meeting of defendant No. 1, dated May 14, 1982, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent airways whom he met during that period and also relied on a few letters written by the third parties to him as the managing director. Under the circumstances, the petitioner was apprehensive, since defendant No. 1 and other directors have threatened to invade the right of the petitioner to act as the managing director of defendant No. 1. The petitioner instituted this suit for a declaration that the petitioner is the managing director of the defendants and is entitled to act as such, for a declaration that the resolution is illegal, void and of no effect, and for a perpetual injunction restraining defendant Nos. 1, 2, 3 and 4 and/or their agents or servants from in any way or manner interfering with the right of the petitioner to act as the managing director of defendant No. 1 or from giving effect to the resolution, dated May 14, 1982. The petitioner alleged that the defendants have given instruction to the office staff not to carry out any instructions of the petitioner and they in fact appointed security staff from the Security Service of India for preventing the petitioner from attending or having any access to his office from May 31, 1982. Mr. Sinha relied on the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvelope was opened by the court's officer in the presence of the learned lawyers appearing for both the parties and the contents of the said cover were brought out which corroborated the affidavit testimony of Rajendra Prosad Khaitan. Under the circumstances, the petitioner's submission that he had not been served with any notice whatsoever of the proposed meeting to be held on May 14, 1982, as also the proposed resolution to be passed at such meeting is untenable and equally unacceptable is his submission that he did not get any chance of making any representation against the proposed resolution which was going to be passed at such meeting removing him from acting as a director. Under the General Clauses Act, 1897, under section 27 such tender of the registered cover and his refusal to accept the same is valid service in accordance with law. Mr. Sujit Sinha submitted that the explanatory statement given by the company was not sufficient inasmuch as the special notice given by the requisitionists should also have been accompanied by the explanatory statement. In support of his contention he relied on an unreported judgment of Mr. Justice Salil K. Roychowdhury (as he then was) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to managing directors. In the event of any breach of contract of employment of a managing director, in the opinion of Palmer, at article 60/11 at page 668, is the remedy for damages for such breach of contract. The decisions relied by Mr. Sinha have no application to the facts and circumstances of this case. Section 170 of the Companies Act provides as follows : "170(1). The provisions of sections 171 to 186 ( i )shall, notwithstanding anything to the contrary in the articles of the company, apply with respect to general meetings of a public company, and of a private company which is a subsidiary of a public company; and ( ii ) shall, unless otherwise specified therein or unless the articles of the company otherwise provide, apply with respect to general meetings of a private company which is not a subsidiary of a public company. (2)( a )Section 176, with such adaptations and modifications, if any, as may be prescribed, shall apply with respect to meetings of any class of members, or of debenture holders or any class of debenture holders, of a company, in like manner as it applies with respect to general meetings of the company. ( b )Unless the articles of the compan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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