TMI Blog1983 (11) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Business Standard on September 12, 1983, informing all concerned that the annual general meetings were to be held on October 7, 1983, at the place and time specified therein. It is the case of the appellant that on September 12, 1983, the appellant posted under certificate of posting proper notices together with the annual reports to all the registered shareholders of the company including the respondent, Dhiresh Chandra Roy. The appellant has produced the certificate of posting in support of his contention in court. It has been stated on behalf of the respondent that the notices were posted on September 16, 1983, as would appear from the postal endorsement on the envelope received by the respondent. The case of the respondent is that the respondent received the said two notices both dated September 9, 1983, on September 22, 1983. The respondent was not given clear 21 days' notice for the meetings scheduled to be held on October 7, 1983, as enjoined by section 171 of the Companies Act, 1956. It has been contended that the two annual general meetings that were held on October 7, 1983, were held disregarding the mandatory provisions of law and the proceedings of the two m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order should be continued. It has next been submitted that even if the allegations made by Dhiresh Chandra Roy are all assumed to be true and correct, even then the respondent would not be entitled to obtain an order of injunction. It has been submitted that it is not necessary to file any affidavit and the matter can be disposed of here and now on the assumption that the allegations made by the respondent are all true and correct. The only grievance of Dhiresh Chandra Roy is that the two notices both dated September 9, 1983, were received by him on September 22,1983, and the annual general meetings were held on October 7, 1983. The period prescribed under section 171, however, is 21 clear days' notice. Under section 171(2)( i ), a general meeting may be held after giving a shorter notice only with the consent of all the members entitled to vote thereat. Mr. Nag, appearing on behalf of the respondent, has argued that the provisions of section 171 are mandatory. At least 21 days' notice in writing must be given to every shareholder for holding the annual general meeting of a company under section 171(1). A shorter notice can be given only under the circumstances set out in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal omission to give notice to any member or non-receipt of notice by any member shall not invalidate the proceedings at the meeting. If we have to uphold the contention of the respondent, we shall have to hold that if the notice to a shareholder is not accidentally posted at all, the proceedings at the annual general meeting of a company will be valid. But if the notices were posted accidentally less than 21 days before the meeting, the proceedings at the meeting will be void even though the shareholder received the notice in good time before the meeting was held and actually attended the meeting. If Mr. Dhiresh Chandra Roy did not receive the notice at all, the company could have invoked the protection of the provisions of section 172(3) of the Act. In our opinion, such a construction would lead to absurdity and should be avoided. We are aware of the dictum that law is not always logic. But the court should be very slow to give a construction to a section which would lead to absurdity and will cause injustice. We are unable to accept the contention that a short notice served on a member will invalidate a meeting altogether but non-receipt of the notice by a member will not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts appear to take a realistic view of the working and management of the affairs of the company and consider the problems of a company from a practical business point of view. The approach of the English courts to the question of these requirements is not generally a narrow and a legalistic one and is essentially a realistic one from the view-point of the actual working of a company in practice, bearing, however, in mind the requirements of justice in each case. The approach of the English courts, to my mind, is eminently reasonable and sound. The said approach serves the purpose for which the said provisions have been made and at the same time promotes the cause of justice and results in effective and proper working of the company." (p. 302-303) Mr. Nag drew our attention to a Division Bench judgment of the Madras High Court in the case of N. V. R. Nagappa Chettiar v. Madras Race Club [1949] 19 Comp. Cas. 175 . That case was noted and dealt with by A. N. Sen J. in Surajmull's case, ( supra ). That was a case decided under the Indian Companies Act, 1913. In that case, construing section 81(2) of the Indian Companies Act, 1913, which corresponds to section 171 of the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company was under a legal duty to give notice of the resolutions that were sought to be passed. In that case, the learned judge had no occasion to go into the question of the effect of the shortness of notice and also the implication of section 172(3). The point at issue and the facts of that case were entirely different. The judgment of A. N. Sen J. in the case of Surajmull Nagarmull v. Shew Bhagwan Jalan ILR [1975] 1 Cal 207, was neither cited nor considered in that case. In the case before us, the two annual general meetings of the company for the financial years 1980-81 and 1981-82 have been held belatedly and with great difficulty. The working of the company has come to a standstill. The company will suffer prejudice if the newly elected board of directors is not allowed to take charge at this juncture. The petitioner admittedly has not suffered any prejudice in any way from the shortness of the notice. There is no reason why the new board of directors should not be allowed to take charge of the company and given a chance to revive it. From a practical business point of view there is no reason why the balance of convenience does not require that the interim order shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for interference from the appellate court. These principles are well established; but, as has been observed by Viscount Simon L.C. in Charles Osenton Co. v. Johnston [1942] AC 130 at p. 138,' the law as to the reversal by a court of appeal of an order made by a judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case". (p. 1159) In this case, in our view, the order of injunction should not have been passed in favour of the plaintiff when the plaintiff was unable to show any loss or prejudice in any manner whatever. The balance of convenience does not require an order of injunction. In fact, the two annual general meetings were at last held after protracted litigations. We fail to see why the resolutions passed at the annual general meetings will not be given effect to merely because one shareholder having seven shares of Rs. 10 each actually received the individual notices less than 21 days in advance. There is no dispute that the notice of the meetings was published in a newspaper in good time. There is also no dispute that the shareholder is a resident ..... X X X X Extracts X X X X X X X X Extracts X X X X
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