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TMI Blog2015 (8) TMI 1515X X X X Extracts X X X X X X X X Extracts X X X X ..... e decisions taken therein are illegal, invalid and void; b) for a declaration that the Extraordinary General Meeting proposed to be held on 28.12.2007 is illegal, invalid and void; c) for permanent injunction restraining the defendant Club from alienating any land in its possession for establishing a Hotel." The fact emerged from the plaint are adumbrated herein below: (a) The defendant/petitioner is a Company and registered with the Companies Act, 1956 having 3100 members. The main object is to promote and develop a sport known as Golf. (b) The plaintiff is a permanent member of the defendant/petitioner-club since 1985. (c) A notice dated 19.07.2007 is issued by the club for holding an AGM on August 31, 2007 under Article 57 of the memorandum and article of association. In course of the AGM, a fresh agenda was circulated which is in gross violation of Article 57 of the memorandum and article of association and any decision thereon is illegal and bad. (d) Subsequently a circular dated 08.09.2007 was circulated amongst the members of the said club detailing the salient points discussed in passed in an AGM held on 31st August, 2007. Apart from the appointment of the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other wise deal with all or any of the property of the Company and, therefore, the decision to go ahead with the hotel project could not be in contravention to the object and purpose of the petitioner club. The Co-ordinate Bench observed that though the power to sale or deal with the property of the club is present in the memorandum of association but the same cannot be exercised in total disregard to the ultimate object for which the claim is formed. Ultimately the revisional application was disposed of restraining the defendant/petitioner to maintain status quo with regard to alienation of the suit property till the disposal of the suit. Though the Court further requested the Trial Court to dispose of the suit expeditiously, the defendant/petitioner was advised to proceed under Order 7 Rule 11 of the Code seeking rejection of the plaint. The prayer for rejection of plaint is based on the facts that once the High Court in revisional application held that the petitioner club had a right to sale and/or dispose of any part of its property and the club was not trying to allowing any land in its possession for hotel project, the suit has become infractuous. It is further stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that if the document is not appended and/or disclosed in the list of documents required at the time of presentation of plaint, the Court shall look into the said document produced for the first time by the defendant under Order 7 Rule 11 of the Code if the foundation of the plaint case is based thereupon and placed reliance upon a judgment of this Court in case of Punjab National Bank -v- Britannia Industries Ltd. reported in (2001) 2 Cal LT 219(HC), Bhagwan Das -v- Goswami Brijesh Kumarji & Ors; reported in AIR 1983 Raj 3 and in case of SNP Shipping Services Pvt. Ltd. & others; - v- World Tanker Carrier Corporation & another reported in AIR 2000 Bombay 34. Lastly he submits that the suit which is per se vexatious and devoid of actual cause of action should be nipped in the bud as held in case of I.T.C. Limited -v- Debts Recovery Appellate Tribunal & Others; reported in (1998) 2 SCC 70. The opposite party refuted the contention of the petitioner saying that despite the provision of Section 397 & 398 of the Companies Act, the civil suit is maintainable if the challenge is made to a validity of the meeting which is per se illegal and placed reliance upon a judgment in case of Dr, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f association of the club and the decision taken therein is illegal, void and not binding being opposed to clauses 3(a), (d) & (e) of the memorandum and article of association of the defendant club. The plaint case proceeds that in the notice for AGM to be held on 31st August, 2007, there was no agenda for setting up the hotel project which was circulated to the members present in the said meeting and was thereafter passed by majority by raising of hands. It is further stated that Article 57 of the memorandum and article of association relatable to the business of the AGM stipulates the election of captain, committee, appointment and fixation of remuneration of auditors as ordinary business and the special resolution shall be transacted only after compliance under Section 173 (2) (3) of the Companies Act. The special resolution being not in conformity with the said clause is, therefore, bad and is also opposed to the object for which the club was established. It is undeniable that the application for temporary injunction was dismissed by the Trial Court as the Plaintiff/Opposite Party failed to make out any prima facie case and affirmed by the Court of appeal below, on the other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be remembered that the averments made in the plaint as well as the contents of the document which may constitute part of the plaint, can be looked into on the face value thereof and the question relating to the validity or invalidity of the document cannot be considered at the stage of deciding an application under O.7,R.11,C.P.C." The ratio laid down in the above noted report is accepted and/or applied in case of SNP Shipping Services Pvt. Ltd & Others; (supra) in following words: "17. * * * * * * * * * * * * * * * * * * * * &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aritable Trust & Education Charitable Society -v- Ponniamman Educational Trust reported in (2012) 8 SCC 706, it is held: " It is settled law that where a document is sued upon and its terms are not set out in the plaint but referred to in the plaint, the said document gets incorporated by reference in the plaint. This position has been reiterated in U.S. Sasidharan v. K. Karunakaran reported in (1989) 4 SCC 482 & Manohar Joshi v. Nitin Bhaurao Patil reported in (1996) 1 SCC 169." The ratio which emerged from the aforesaid reports is that the document on which the cause of action is pleaded in the plaint, if not disclosed or included in the list of documents, becomes part of the plaint by necessary reference and can be looked at under Order 7 Rule 11 of the Code. The first clause of the memorandum and association is to promote the game of Golf and affording to its members all usual privileges, advantages, conveniences and accommodation of a golf club. Clause 3(e) thereof stipulates the lay out and prepare, adopt and improve the lands for the purpose of playing golf, bowls, or other games or any kind of athletic sports, amusement or recreations and to construct and/or demolish an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in that case(See AIR 1950 Privy Council 80). 14. It is now an accepted principle of law that where an act by the majority of the share-holders is merely irregular and can be rectified by the majority of the share-holders, an action is not maintainable against that act, but if the act is ultra vires the company itself and is beyond the powers of the members of the company or its share-holders to ratify that act or to rectify the same, an individual member of the company may sue the company and its directors, for himself and on behalf of the other share-holders for declaring that act as illegal and for consequential reliefs. In such actions, however, the plaintiff has no larger right to relief than the company would have as plaintiff." The judgment rendered in case of Jhajharia Bros. Ltd. (supra) relied upon by the petitioner laid down that the suit at the instance of an individual shareholder of the Company on his behalf and on behalf of other unspecified shareholders against the Company alleging the fraud upon the minority may not have been perfectly instituted but carved out an exception in these words: "7. I propose, as shortly as I can without going into the cases in de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a duty of the Court to take such action which is necessary in the interest of Justice. Every facts germinated after the litigation having a substantial nexus and/or bearing on the relief claimed in the suit may be taken into consideration for ends of Justice. The reliance can be placed in this regard to a judgment in case of Shipping Corporation of India Ltd.(supra), it is held: "25. Thus it is clear that by the subsequent event if the original proceeding has become infructuous, ex debito justitiae, it will be the duty of the court to take such action as is necessary in the interest of justice, which includes disposing of infructuous litigation. For the said purpose it will be open to the parties concerned to make an application under Section 151 CPC to bring to the notice of the court the facts and circumstances which have made the pending litigation infructuous. Of course, when such an application is made, the court will enquire into the alleged facts and circumstances to find out whether the pending litigation has in fact become infructuous or not." The petitioner-club says that the challenge is made to a resolution dated 31st August, 2007 when, in fact, the resolution hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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