1923 (3) TMI 7 - HC - Indian Laws

Summary

Issues Involved:
1. Construction of Section 36, Clause (p), of the City of Bombay Municipal Act.
2. Disqualification of councillors from voting due to interest in the company.
3. Validity of the Chairman's declaration at the meeting.
4. Maintainability of the suit as framed.

Issue-wise Detailed Analysis:

1. Construction of Section 36, Clause (p), of the City of Bombay Municipal Act:
The court examined the construction of Section 36, Clause (p), which states, "A councillor shall not vote or take part in the discussion of any matter before a meeting in which he has, directly or indirectly, any share or interest." The court clarified that this includes interests described in Clauses (g) to (k) of Section 16, such as interests in newspapers or joint stock companies contracting with the Corporation. The court emphasized that the interest must be more than sentimental and should be pecuniary or material.

2. Disqualification of Councillors from Voting Due to Interest in the Company:
- Mr. Murzban: The court found that Mr. Murzban was not the proprietor but the editor of the Jam-e-Jamshed, earning a salary, and had no interest in the paper that would disqualify him from voting.
- Mr. Meyer Nissim and Mr. Mahomedbhai Currimbhai Ebrahim: Both were disqualified due to beneficial interests in shares of the company.
- Mr. Miya Mahomed Chhotani: The court accepted evidence showing he had sold his shares and had no interest on the material date.
- Mr. Hansraj Pragji: The court found the alleged gift of shares to his wife unproven, thus disqualifying him from voting.
- Dr. Master: The court accepted his evidence of having transferred shares to his wife and daughter, finding no disqualification.
- Dr. Cursetji: The court believed his evidence of transferring shares to his son, finding no disqualification.
- Sir Temulji Nariman: The court found no obligation for him to vote according to the beneficiaries' wishes, thus no disqualification.
- Mr. Murzban (Complimentary Pass): The court held that the complimentary pass did not constitute a disqualifying interest.

3. Validity of the Chairman's Declaration at the Meeting:
The court held that the Chairman's declaration that the amendment was lost was incorrect. If the disqualified councillors had not voted, the amendment would have passed with sixteen votes for and fifteen against. The Chairman was wrong in giving his casting vote.

4. Maintainability of the Suit as Framed:
The court rejected the defendants' contention that the suit should have been brought in the name of the Corporation. It held that the minority has the right to challenge the validity of votes in a court of law. The court found no substance in the argument that the suit would be rendered nugatory by convening another meeting. The court also ruled that the suit could be amended to include other members of the Corporation, but decided not to delay the proceedings for such an amendment.

Conclusion:
The court declared that the amendment should be taken as carried and restrained the defendants from acting on the Chairman's declaration. The court also addressed the issue of costs, criticizing the plaintiff for making reckless charges of fraud against fellow councillors and ordering the defendants to pay three-fourths of the plaintiff's costs.