TMI Blog2013 (1) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... and conducing of the meeting, the operation of the provisions of this Act and of the company's articles - Thus when convening of extraordinary general meeting in terms of provisions of section 169 fails or meeting does not take place for any reasons and/or it is not practicable, only then provisions of section 186 can be invoked. Where convening of the extraordinary General Meeting in terms of the provisions of section 169 fails or the meeting does not take place for any reasons and/or it is not practicable, only then the provisions of section 186 comes into play, and can be invoked. The petitioner was required to make compliance of section 169 by undertaking the entire exercise afresh before filing the instant petition. It seems that the petitioner is relying upon the earlier compliance made in the year 2006, when the dispute arose. Such compliance cannot be said valid as the outcome of the same are already under challenge, in the civil suits pending before High Court. Therefore, the respondents has rightly argued that the petition is bad for non-compliance of section 169 - petition is liable to be dismissed. - C.P. NO. 424 (186)/KB/2011 - - - Dated:- 27-7-2012 - A.K. TRIP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further that Mr. Sankrarn Basu be and is hereby appointed as Director in place of Mr. Arun Chakraborty to hold office during such time as Mr. Arun Chakraborty would have held office had he not been so removed (viii) Resolved that pursuant to section 284 of the Companies Act, 1956, Mr. Ashoke Saha be and is hereby removed as director. 3. It is observed that on the basis of such resolutions, the company had called upon such removed directors to, inter alia, hand over all the documents of the company in their possession immediately to the company and not do any act or deeds for and on behalf of the company or in its name. 4. It is further stated that such directors challenged the validity of EOGM and the resolution passed therein. Accordingly, they approached the Hon'ble High Court of Calcutta by way of filing a Civil Suit bearing No. 311/2006 seeking permanent injunction thereby restraining the petitioner to act on the basis of the purported EOGM held on 03-11-2006. 5. It further appears that the petitioners' group also filed a Civil Suit for injunction in the Hon'ble High Court at Calcutta, which was registered as Civil Suit No. 302/2006, for decree declaring the plaintiff n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s beneficially owned and held by Mangalamoyee Vyapar Pvt. Ltd., who is beneficially owned by two distinct group of shareholders both holding their respective equity shares through private limited companies/Individually in their control;, that the earlier directors of Mangalmoyee Vyapar Pvt. Ltd. and the petitioner company were appointed with the assent of both the groups; that, no proceedings could have been instituted on behalf of the petitioner at the instance of only one of the groups of shareholders of the petitioner company, 10. Further, there has been wrongful and illegal allotment and increase of shares in the petitioner company itself and the wrongful acts are against the interest of the bona fide and genuine shareholders of both the said two companies i.e. Mangalmoyee and the petitioner company. Recently serious acts of fraud, forgery and acts of oppression and mismanagement have come to the knowledge of the shareholders of the said two companies. 11. It is further stated In the reply that there are serious disputes which are pending before the Calcutta High Court with regard to wrongful and illegal appointment of directors of the respondent No. l company. Thus, a suit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... removed as directors of the company; that the respondent No. 2 has not acted wrongfully or illegally or without authority in causing public notice published on 16.11.2006; that he has not acted in any manner prejudicial to the interest of the company and the shareholders as well; that he is not trying to deal with the properties of the company and all the properties and assets of the company are under the custody of the Asset Sale Committee, appointed by the Debt Recovery Tribunal (DRT) and they are dealing with the same pursuant to the orders passed by the DRT. 14. It is submitted that there is no dispute with regard to the shareholders of the company and also to the constitution of the board of directors of the company and continue to be a director of the company; that the deponent is wrongly and illegally trying to usurp the management of the company along with other directors purported to be appointed by the EOGM held on 03.11.2006. The majority shareholders of the company can make application or can pray for relief with regard to the holding of general meeting or can raise any issue with regard to the registered office of the company before this Board. It is impracticable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner had sought identical reliefs, but the application was dismissed by the Hon'ble High Court vide its order dated 29-07-2009. He contends that no appeal was preferred by the petitioner against the said order passed by Hon'ble High Court, therefore, this order has become final and binding upon the parties and thus, the present petition is barred by the principle of res judicata. 19. On the other side the ld. Counsel for the petitioner submits that the Hon'ble High Court vide its order dated 29-07-2009 passed in GA No. 1467 of 2007 has clearly observed that the power to call, hold and conduct EOSM is vested with the Company Law Board by virtue of the provisions contained in Section 186 of the Companies Act, 1956, Therefore, the Bench is competent to hear and adjudicate this petition and is not barred to adjudicate this petition. 20. I have considered the rival submissions and have gone through the relevant laws. In my opinion, the contentions raised by the Ld. Counsel for the petitioner have substance. Copy of the order passed by Hon'ble High Court is available on record at page no. 542-551 of the petition. I may like to reproduce the relevant order passed by the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies Act, 1956. 22. The Hon'ble High Court, after having considered the aforesaid challenge and particularly the plea of jurisdiction, has dismissed this application holding that the Company Law Board only has power to pass an order for convening, conducting and holding general meeting, under Section 186 of the Companies Act, 1956. 23. It is cardinal principle of law that where the Court lacks inherent jurisdiction over the reliefs sought for, the findings of such Court does not operate res judicata. In my opinion, the respondents having raised this plea in the said application before the Hon'ble High Court are themselves barred to raise this plea here, I, therefore, have no hesitation to hold that this petition is not barred by the principle of res judicata. The contentions of the ld. Counsel for the respondents are not tenable and the same are hereby rejected. 24. Now, I would like to prefer to examine the provisions contained in Section 186 of the Companies Act, 1958, which reads as under: Sec. 186 : Power of Company Law Board to order meeting to be called. (1) If for any reason it is impracticable to call a meeting of a company, other than an annual general me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in support of his case, has relied upon the following decisions : The Malhati Tea Syndicate Ltd., In re [1951] 21 Comp. Cas. 323 (Cal.) - wherein it has been held that the word 'impracticable' means impracticable from a reasonable point of view. The Court should take a commonsense view of the matter and act as a prudent person of business. Indian Spinning Mills Ltd. v. His Excellency Lt General Shamsher Jang Bahadur Rana AIR 1953 Cal. 355 wherein the same view has been affirmed. Motion Pictures Association, In re [1974] 44 Comp. Cas. 298 (Delhi) wherein it has been held - Where there is doubt as to the existence of a board o validity appointed directors and there is possibility of interminable troubles and prejudice to the interest of the company if a meeting is held otherwise than under the direction of the court, it will be expedient for the court to call a meeting of the company. Once a meeting is called under section 186 of the Companies Act, 1956, there is no need for confirmation by the court of the proceedings. Nor is there any need for an application to actually set aside the proceedings of the meeting called by the court where such a meeting is not conducted acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f requisition slips issued was more than the number of members signing the register In token if their having been present; (ii) some members who had left their requisition slips with the scrutineers had not turned up to collect their ballot papers; (iii) the requisition slips for the ballot papers were not signed by many voters; (iv) representatives of companies had recorded their votes without producing authorized copies of resolutions passed by those companies under section 187 authorising them to vote on behalf of the respective companies. Baptist Church Trust Association v. Member, Company Law Board [1986] 60 Comp. Cas. 381 (Cal.), wherein it has been held-Impracticability : It has been held by the' Company Law Board that it is not practicable to call a meeting of the trust association in the usual course. The grounds on which the conclusion has been arrived at have been found to be, inter alia, that the trust association had become a divided entity and was being sought to be run by two rival groups each of which was seeking to carry on management through its own committee and its own set of office bearers. There was also a dispute as to where the registered office of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their rights to sue. Therefore, he contends that such prayer cannot be allowed and the petition is liable to be dismissed. 29. The ld. Counsel for the petitioner, refuting the arguments of the ld. Counsel for the respondents, submits that the petitioner has left open the discretion upon the Bench to frame a different agenda for calling EOGM, in case this bench does not feel appropriate to pass any direction in respect of the consideration of the agenda marked as Annexure "Q" to the petition. The ld. Counsel for the petitioner further says that the Hon'ble High Court has itself by its order dated 29-07-2009 has since held that the power to convening a meeting vests with the Company Law Board, therefore, there can be no disobedience nor it can termed as encroachment upon the jurisdiction of Hon'ble high Court. 30. I have given my serious thoughts on the contentions of both the parties and have carefully examined the relevant documents available on record. 31. First of all 1 may like to reproduce the reliefs sought by the respondents in their civil suit bearing No.311/2006 pending before the Hon'ble High Court, which are as follow; (a) Declaration that the public Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court may deem fit and proper. (c) Ad interim orders in terms of the prayers above. (d) Costs at and incidental to this application. (e) Such further and/or other order or orders be passed and/or direction or directions be given as to this Hon'bie Court may deem fit and proper. 33. From the perusal of both the plaints and the reliefs:, as sought for, it is undoubtedly dear that the resolutions passed in the purported meeting held on 03-11-7.006 is not only under challenge, but the determination of the board of directors as to who is entitled to be ousted and who is to be inducted is also under challenge. 34. In spite of my serious anxious consideration I fail to arrive at that a different agenda for convening a meeting which could be possible without entering into the contentions raised in the suit referred to above. Assuming I reframe/modify the agenda in a different manner for consideration directing that the shareholders to consider as to who are entitled to be in the board of directors or where the company should be located, even then all the questions which are already under challenge would incidentally arise for discussion and for voting in the meeting and thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to that matter, (5) Where two or more distinct matters are specified in the requisition, the provisions of sub-section (4) shall apply separately in regard to each such matter; and the requisition shall accordingly be valid only in respect of those matters in regard to which the condition specified in that sub section is fulfilled. (6) If the Board does not, within twenty-one days from the date of the deposit of a valid requisition in regard to any matters, proceed duly to call a meeting for the consideration of those matters on a day not later than forty-five days from the date of the deposit of the requisition, the meeting may be called (a) By the requisitionists themselves; (b) In the case of a company having share capital, by such of the requisitionists as represent either a majority in value of the paid-u share capital held by all of them or not less than one-tenth of such of the paid-up share capital of the company as is referred to in clause (a) of sub-section (4), whichever is less; or (c) In the case of a company not having a share capital by such of the requisitionsts as represent not less than one-tenth of the total voting power of all the members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall apply where the company has availed itself of the option given to it under section 265 to appoint not less than two-thirds of tm total number of directors according to the principle of proportional representation, (2) Special notice shall be required of any resolution to remove a director under this section, or to appoint somebody instead of a director so removed at the meeting at which he is removed. (3) On receipt of notice of a resolution to remove a director under this section, the company shall forthwith send a copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall he entitled to be heard on the resolution at the meeting, (4) Where notice is given of a resolution to remove a director under this section and the director concerned makes with respect thereto representations in writing to the company (not exceeding a reasonable length) and requests their Notification to members of the company, the company shall, unless the representations are received by it too late for it to do so, - (a) in any notice of the resolution given to members of the company, state the fact of the representations having been made; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute with regard to the compliances of the said provisions. However, in my view, the provisions contained in section 169 stipulates requisitioning of extraordinary General Meeting, where in normal course the meeting is to be convened; Undisputedly, as far as the provisions contained in section 284 is concerned, this to be complied with where removal of directors is the one of the subjects in the agenda. Similarly, the compliance of the provisions contained in section 190 will also be mandatory prior to convening of the meeting. 40. To my mind, where convening of the Extraordinary General Meeting in terms of the provisions of section 169 fails or the meeting does not take place for any reasons and/or it is not practicable, only then the provisions of section 169 of the Act comes into play and can foe invoked. I am further of the view that the petitioner was required to make compliance of section 169 of the Act by undertaking the entire exercise afresh before filing the instant petition, it seems that the petitioner is relying upon the earlier compliances made in the year 2006, when the dispute arose, in my view, such compliances cannot be said valid as the outcome of the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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