1998 (7) TMI 640 - HC - Companies Law

Summary

Issues Involved:
1. Entitlement of the plaintiff to the claimed amount.
2. Effect of the plaintiff's enrolment as an advocate in 1975.
3. Entitlement of the plaintiff to claim interest, including the amount, rate, and period.
4. Relief.

Issue-wise Detailed Analysis:

1. Entitlement of the Plaintiff to the Claimed Amount:
The plaintiff, Major R.S. Murgai (Retd.), claimed he was appointed as Managing Director-cum-Chairman of the defendant-company by a resolution dated 6-2-1974, with a salary of Rs. 2,500 per month plus perquisites. He sought salary from 1-6-1975 until the filing of the suit, totaling Rs. 90,000 plus interest. The defendant denied such a resolution existed and highlighted that the plaintiff was removed from his position by court orders due to mismanagement and health issues. Certified copies of Form No. 23 and the articles of association were exhibited, proving the plaintiff's appointment on 6-2-1974. However, the plaintiff was removed by an order dated 28-4-1978 in C.P. No. 29 of 1975, and this removal was upheld by subsequent court orders. The court concluded that since the plaintiff ceased to function as Managing Director due to the appointment of an administrator on 23-5-1975, he was not entitled to the claimed salary from 1-6-1975 onwards.

2. Effect of the Plaintiff's Enrolment as an Advocate in 1975:
The defendant argued that the plaintiff's enrolment as an advocate in 1975 rendered him ineligible to continue as Managing Director. However, the court did not need to provide a separate finding on this issue due to the conclusions reached on the other issues.

3. Entitlement of the Plaintiff to Claim Interest:
The plaintiff sought interest on the claimed amount at 12% per annum, totaling Rs. 15,000. The court, however, found that since the plaintiff was not entitled to the salary from 1-6-1975 onwards, he was also not entitled to the claimed interest. This issue was answered against the plaintiff.

4. Relief:
Given the findings on the previous issues, the court dismissed the suit. The plaintiff was not entitled to the claimed amount or interest. The parties were left to bear their own costs.

Conclusion:
The court dismissed the suit, concluding that the plaintiff was not entitled to the claimed salary and interest due to his removal as Managing Director-cum-Chairman by court orders, which were upheld in subsequent appeals. The plaintiff's enrolment as an advocate and other arguments did not alter this conclusion.