1964 (10) TMI 103 - HC - Companies Law

Summary

Issues Involved: Competence of revision petition, legality of possession under Section 9 of the Specific Relief Act, authority of the Board of Directors under the Companies Act, and interpretation of 'consent' within the meaning of Section 9 of the Specific Relief Act.

Issue-wise Detailed Analysis:

1. Competence of Revision Petition:
The non-applicants raised a preliminary objection regarding the competence of the revision petition, arguing that the applicant had an alternative remedy of a suit. The court noted that interference in revision under Section 9 of the Specific Relief Act is justified only in exceptional circumstances, such as misapprehension of the scope of Section 9 or where the balance of convenience is not in favor of driving the plaintiff to a regular suit. The court found no exceptional circumstances in this case and upheld the preliminary objection, stating that no interference in revision was possible. However, the court decided to examine the merits of the case as well.

2. Legality of Possession under Section 9 of the Specific Relief Act:
The applicant argued that the possession of the property by the defendants was without its consent and not in due course of law. The trial court found that the possession was given by the General Manager, Shri A. V. Pandit, under the directions and powers given by the Board of Directors, and thus could be deemed to have been with the consent of the applicant. The trial court dismissed the suit, concluding that the mere illegality of the transaction or defective title did not entitle the applicant to relief under Section 9.

3. Authority of the Board of Directors under the Companies Act:
The applicant contended that as a public limited company, it could act only as prescribed by the Companies Act, 1956, and that the Board of Directors' powers were restricted under Sections 291, 292, and 293. The applicant argued that valid consent for transferring possession could only be given by the general body of shareholders through a special resolution under Section 189. The court examined whether the possession taken by the defendants was with the consent of the company for the purposes of Section 9 when the transaction was invalid due to the lack of consent from the general meeting as required by Section 293.

4. Interpretation of 'Consent' within the Meaning of Section 9 of the Specific Relief Act:
The court emphasized that Section 9 of the Specific Relief Act is concerned with whether the plaintiff was dispossessed without consent, not the legality of the transaction. The court referred to the general principles of corporate consent, noting that a company's consent can be represented by the 'directing mind and will' of the company, such as the Board of Directors or General Manager. The court found that the Board of Directors and the General Manager, who were entrusted with the company's affairs, represented the company's consent. Thus, possession taken with their consent, even under an invalid transaction, was deemed to be with the company's consent for the purposes of Section 9.

Conclusion:
The court concluded that the applicant was not dispossessed without its consent for the purposes of Section 9 of the Specific Relief Act, as the possession was taken with the consent of the company's directing mind and will. The revision petition was dismissed with costs, and the court did not express a concluded opinion on the interpretation of 'otherwise dispose of' under Section 293 of the Companies Act.