1996 (11) TMI 317 - HC - Companies Law

Summary

Issues:
1. Validity of the order directing the appellant to hold annual general meetings from 1986 to 1995.
2. Interpretation of the Companies Act in relation to the management committee constituted by the Supreme Court.
3. Compliance with statutory provisions excused under certain circumstances.
4. Effect of the Acquisition Act on the necessity of holding annual general meetings.

Analysis:

The judgment involves a dispute between the Madras Race Club (appellant) and a member of the club (respondent) regarding the holding of annual general meetings for the years 1986 to 1995. The respondent filed a petition under section 167 of the Companies Act, seeking to compel the club to hold these meetings. The Company Law Board directed the appellant to conduct the annual general meetings, leading to this appeal.

The appellant argued that the non-holding of meetings was due to the management committee appointed by the Supreme Court after the striking down of the Acquisition Act. The appellant contended that the club had become defunct under section 560 of the Companies Act, and the newly elected management committee had already held an annual general meeting for the year 1996, rendering the previous meetings unnecessary.

The court examined the events following the passing of the Madras Race Club (Acquisition and Transfer of Undertaking) Act, 1986, and the subsequent constitution of a management committee by the Supreme Court. It was noted that during the committee's tenure, the club remained largely inactive, with only race events being conducted. The court emphasized that the management committee appointed by the court was not the same as the managing committee under the club's articles, and thus, the responsibility for convening annual general meetings fell on the latter.

Additionally, the court considered the legal maxim "lex non cogit ad impossibilia," which excuses non-compliance when performance is impossible due to circumstances beyond the party's control. The court highlighted that the club's affairs were effectively taken over by the court-appointed committee, making it impractical to convene annual general meetings during that period.

Ultimately, the court allowed the appeal, setting aside the Company Law Board's order to hold annual general meetings for the years 1986 to 1995. The court found that the club's compliance with statutory obligations, given the circumstances, was reasonable, especially since the newly elected management committee had already conducted an annual general meeting for the year 1996. The respondent, acknowledging the meeting's completion and the accounts' approval, chose not to pursue the matter further.