TMI Blog2005 (7) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... the power of attorney executed by the first holder is valid. The learned Company Judge held that the power of attorney is a proxy and that the votes cast by the power of attorney holder to the extent of the number of shares specified in the power of attorney are valid. Hence this appeal. 2. The appellants are the original respondent Nos. 1, 2 and 4. The respondent Nos. 1 to 7 are the original applicants and the other respondents are original respondent Nos. 8 to 13. The appellant No.1 ( the company for short) was incorporated on 6-3-1967 as a private limited company by shares and with effect from 1-8-1988 it is a deemed public company limited by shares by virtue of section 43A of the Companies Act, 1956 ( Act for short). The respondent Nos. 1 to 7 ( the applicants for short) at the relevant time held approximately 28 per cent of the total share holdings and the respondent Nos. 2 to 13 held the remaining 72 per cent of the shares of the company. 3. The applicants had filed Company Petition No. 77 of 1990 in this Court under sections 397 and 398 of the Act seeking appropriate reliefs under sections 402 and 403 of the Act. In view of certain allegations regarding the conduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irji under the P/A is in respect of 1021 shares. I hold, therefore, that P/A so also voting by Mrs. Hirji under the said P.A in respect of 1021 shares is invalid." We may note that the votes cast by Mrs. Hirji in the said 28th Annual General Meeting were against special Resolution Nos. 6, 7 and 8. Inviewof the ruling of the Chairman that the 4301 votes cast by Mrs. Hirji are invalid, the special resolution Nos. 6, 7 and 8 put to vote at the 28th Annual General Meeting were declared as carried and passed by a margin of 86 votes. 6. Challenging the above ruling of the Chairman, the applicants filed Company Application No.127 of 1995 in the pending Company Petition No. 77 of 1990 inter alia on the ground that the ruling of the Chairman is erroneous on a point of law. The applicants prayed that the ruling of the Chairman in rejecting the 4301 votes cast by the power of attorney holder be set aside and consequently, the ruling given on special resolution Item Nos. 6, 7 and 8 be reversed and it be declared that at the 28th Annual General Meeting, the Special Resolution Nos. 6, 7 and 8 were defeated. The said company application was opposed by the appellants inter alia on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the votes cast by such power of attorney holder would be valid. 9. The learned Company Judge further held that the power of attorney is a proxy because neither under the Act nor under the Articles of Association of the Company the proxy is required to be executed in any prescribed form. The learned Judge noted that Article 109 of the Articles of Association of the Company merely provides that the proxy should be as near as practicable to the form set out in Schedule IX of the Act. The Articles of Association of the Company nowhere provide that a document of proxy would be invalid if that document confers not only the power to vote but some other powers also and, therefore, the power of attorney executed by the applicant Nos. 4 and 5 clearly amounts to proxies within the meaning of the articles of association framed by the company. Accordingly, the learned Judge held that the proxy votes cast by Mrs. Hirji could not be rejected as invalid. 10. Even assuming that the votes cast in respect of shares held jointly were invalid, the learned Company Judge observed that the applicant No. 4 held 960 shares in his individual name and, therefore, the 960 votes cast by the power of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company Judge ought not to have held that the power of attorney is a proxy. He submitted that if the power of attorney is considered to be a proxy, then clause 2 or the power of attorney which specifically empowers the power of attorney to appoint a proxy would become redundant or superfluous, because, in law a proxy cannot appoint a proxy. He submitted that the Courts ought not to interpret documents which are destructive of a portion of any of its clauses. Moreover, when the deed empowers the power of attorney holder to appoint a proxy, by no stretch of imagination the deed itself can be considered to be a proxy. He submitted that the challenge to the ruling of the Chairman can only be by establishing that the power of attorneys are valid and that the votes cast under the power of attorneys are valid and not by construing the document as proxy, especially when a such contention was not even raised before the Chairman. 14. Counsel for the appellants further submitted that the learned Judge could not construe the power of attorney as a proxy, because, the document itself did not purport to be proxy, the same was not lodged with the company as a proxy and the company did not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rneys dated 21-3-1990 executed by the applicant Nos. 4 and 5 in favour of Mrs. Hirji were forwarded to the company and the same were duly registered in the books of the company. In fact, voting slips have also been issued by the company authorising the power of attorney holder Mrs. Hirji to vote at the 28th Annual General Meeting of the company. Therefore, it cannot be disputed that the power of attorney holder is entitled to vote at the meeting of the company. 17. Learned counsel for the applicants further submitted that as per article 101 of the articles of association of the company, where more than one joint shareholders are present at the meeting, then, it is the first holder whose name appears in the share certificate alone is entitled to vote in the Annual General Meeting of the company. It is not in dispute that in the present case, both the power of attorneys have been executed by the first holder whose name appears first in the share certificates. If the first holder is entitled to vote in respect of the shares held jointly, then the first holder can very well execute a power of attorney empowering some third person to vote on his behalf in respect of the shares held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liable to be declared as defeated. Therefore, the learned Company Judge was justified in holding that the Chairman of the company ought to have held that at least 960 votes cast by Mrs. Hirji were valid. Accordingly, the learned counsel for the applicants submitted that the order passed by the learned Judge is just and proper and no interference is called for in this appeal. 20. On careful consideration of the rival submissions, we do not find merit in the contentions raised by the appellants and, in our opinion, the decision of the learned Company Judge deserves to be upheld. 21. As stated earlier, the question before us is, whether the power of attorneys executed by the first holder in respect of the shares held jointly are valid and whether the power of attorney is a proxy. 22. The words "power of attorney" and "proxy" are not defined under the Companies Act, 1956. Even the articles of association of the company do not define these words. 23. Section 1A of The Powers of Attorney Act, 1882 defines the word power of attorney to include any instrument empowering a specific person to act for and in the name of the person executing it. 24. Section 176 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of shares held jointly ? 27. Article 101 of the articles of association framed by the company provides that where the shares are held jointly and more than one of such joint holders remain present at any meeting personally or by proxy, then, the person whose name stands first on the register ( first holder for short) shall alone be entitled to vote in respect of the shares held jointly. The words personally or by proxy used in article 101 cannot be construed to mean that the right to vote at the meeting of the company is restricted to shareholder or to the proxy holder only. Article 109 framed by the company clearly provides that apart from shareholder and proxy holder, some other person can also be empowered to vote by executing a valid document. In other words, the first holder can himself vote or validly execute a power of attorney authorising some third person to vote for and on his behalf. As the first holder is entitled to vote in respect of the shares held jointly, the power of attorney executed by the first holder in respect of the shares held jointly would be valid and in that event it would not be necessary for all the joint holders to sign the power of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cast by the power of attorney holder in respect of the shares held individually by applicant No. 4 were taken into consideration, the special resolution Nos. 6, 7 and 8 were liable to be declared as defeated. 29. It is true that the issue as to whether the power of attorney can be treated as a proxy was not considered by the Chairman of the company while deciding the validity of the votes cast by the power of attorney holder. That issue was raised by the applicants for the first time before the learned Company Judge. As we have held that the votes cast under both the power of attorneys are valid, it is not necessary to consider the issue as to whether the power of attorney is a proxy or not. However, the above issue being raised and decided by the Company Judge and the counsel on both sides have also canvassed respective arguments before us, we deem it proper to deal with the said issue as well. 30. In our opinion, a shareholder may execute an instrument of power of attorney or an instrument of proxy empowering a specified person to vote on his behalf at the meeting of the company. If the instrument, is in conformity with the proxy form set out in the Schedule IX of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses another person, who is called the donee, attorney or agent, to act on his behalf. In the absence of any specific bar, a power of attorney that substantially complies with the requirement of Schedule IX can be considered as proxy. In the present case, it is not dispute that the power of attorney executed by the applicant Nos. 4 and 5 contains all the particulars set out in the form in Schedule IX and on being satisfied, the company has issued the voting slips in favour of the power of attorney holder. The fact that clause 2 of the power of attorney empowers the power of attorney holder to vote himself or appoint a proxy, it does not mean that the power of attorney holder cannot vote without executing a deed of proxy in his own favour. Where the power of attorney holder himself decides to vote, then he has to forward the deed of power to attorney to the company and if the same is in conformity with the proxy form set out in Schedule IX, then the company would register it and issue voting slip to the power of attorney holder. In the present case, on registration of power of attorney, voting slips have been issued by the company to the power of attorney holder. Therefore, in the fa ..... 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