TMI Blog1992 (8) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... The respondents are members of the company. P.A. Francis, also a member, filed C.A. No. 188 of 1992 for impleading himself as a respondent. The application was allowed and P.A. Francis has been impleaded as respondent No. 9. The facts giving rise to this application are as under: On April 6, 1992, respondents Nos. 1 to 8 addressed the requisition (exhibit P-1) to the chairman, calling upon him to convene an extraordinary general meeting of the company. The requisition set out two resolutions proposed to be moved at the meeting. Resolution No. 1 was for immediate removal of the existing directors and resolution No. 2 was in respect of recovery from the chairman, of money lost to the company by reason of the illegal increase in the number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... divided into 50 equity shares of Rs. 10,000 each. But the paid-up value of each share is only 8,000. This makes the total paid-up share capital Rs. 4 lakhs. Ten per cent. of this value is Rs. 40,000. No doubt the company had increased the number of members to 52 by allotting two additional shares. This was done without raising the share capital of the company. The issue of two more shares thereby increasing the share capital was held illegal by this court in C.A. No. 64 of 1992. Therefore, the authorised share capital of the company remains at Rs. 5 lakhs and the paid-up share capital at Rs. 4 lakhs. The eight requisitionists together held share capital worth Rs. 64,000 (8,000 x 8 = 64,000) which exceeds 10 per cent. of Rs. 4,00,000. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two matters, viz ., the two resolutions. The test is whether each of the matters is supported by the qualifying shareholding. Sub-section (5) of section 169 stipulates application of the qualifying test laid down in sub-section (4) "separately" in regard to "each such matter". In this case, the requisitionists who hold the qualifying paid-up share capital have consented to the calling of the meeting to consider each of the two matters. The most important question, however, is whether the proceedings of the meeting and the resolution passed therein are valid. It is necessary to understand what happens when the provisions of section 169 are set into motion. If the board does not, within 21 days from the date of the deposit of a valid re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g. The company is bound to send a copy of the representation to every member of the company to whom the notice of the meeting has been sent. It is only after these steps are taken that the resolution can be passed. The special notice of the resolution was not given to the company as required by law. The omission to serve the special notice is a serious error in the conduct of the proceedings. The directors have been denied their statutory right to the notices, to make representations and persuade the members to reject the resolution. The resolution removing the directors is vitiated by failure to fulfil the fundamental requirements of law. The resolution removing the directors is, therefore, invalid. Resolution No. 2 censures the chairm ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
