TMI Blog1963 (11) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... defeated, and the 5th defendant was elected, Then two share-holders moved a resolution that the election of the two other Directors may be postponed. The chairman disallowed the motion. Thereafter the plaintiff was proposed as a candidate to fill up the vacancy to be caused by the retire-ment of the 3rd defendant. But the chairman ruled that he was not qualified to stand as a candidate as he was already defeated in the contest with the 5th defendant. In the election the 3rd defendant was declared elected. The suit was for a declaration that the proceedings of the meeting as regards the elections of the Directors were null and void, and for an injunction restraining defendants 3 to 5 from functioning as Directors and for directing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e majority of the shareholders. An individual membership right is a right to maintain himself in full membership with all the rights and privileges appertaining to that status. This right implies that the individual shareholder can insist on the strict observance of the legal rules, statutory provisions and provisions in the memorandum and articles which cannot be waived by a bare majority of share holders. The distinction between individual membership rights and corporate membership rights of a share-holder is founded on the following considerations: By his contract with the company (and the other members; of Section 20) the share-holder undertakes with respect to some - and, in fact, most lights which his membership carries, to acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority of shareholders had a claim in damage against some of the Directors by reason of the fraudulent act of those Directors. At the general meeting the Majority resolved that no action should be taken against the detinquent Directors. Two of the minority share-holders took out legal proceedings against the Directors and others to compel them to make good the losses to the company; but the court dismissed the action on the ground that as the nets of the Directors were capable of being ratified by the majority of the members, the Court should not interfere, It was left to the majority to decide what was for the benefit of the Company, and their decision cannot be questioned except under certain well-defined circumstances. 4. In Nagappa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of which he has a right to add. That has nothing to do with the question like that raised in 1843-2 Hare for and that line of cases. He has a right to say, whether I vote in the majority or minority, you shall record my vote, as that is a right of property be-longing to my interest in this company, and if you refuse to record my vote I will institute legal proceedings against you to compel you.' What is the answer to such an action. It seems to me it can to maintained as a matter of substance, and that there is no technical difficulty in maintaining it. 6. In Edvards v. Halliwell, 1950-2 All E. R. (sic) at P. 1067 Jenkins L. J., observed: The personal and individual rights of member-ship of each of them have been i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the facts and circumstances of this case, 9. It was argued for the appellant relying on Ram Narain v. Ram Krishan, 10 Ind Cas 515 at p. 523 (Lah) that all questions relating to the regularity of the meeting of the company and the votings therein are matters relating to the internal management of the company. The question, there was whether a shareholder was entitled to recover damages from the chairman who illegally refused to record his vote. It was held that a shareholder who had been wrong fully refused the right to vote for the election of a Director cannot maintain an action for damages against the chairman of the company without alleging and proving that the latter was actuated by malice and that mere deprivation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for carrying on the election and as that was rejected by both the courts below, the plaintiff was not entitled to have a declaration of the invalidity of the 3rd defendant's election as Director. It cannot be said from this circumstance that the plaintiff's suit was not maintainable. The plaintiff's suit was maintainable because there was the prayer for the consequential relief to hold a meeting from the stage at which the chairman declared the plaintiff to be incompetent to stand for election. I can sec no point in the argument of counsel that since the consequential relief was not granted by the courts below the declaration of the invalidity of the election granted by them cannot stand. 11. In the circumstances, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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