2018 (4) TMI 1812 - AT - Companies Law

Direction to call AGM - no interim relief was sought for by the petitioner in the petition, but later on after considering affidavit interim order passed by Tribunal, without deciding main case on merits - HELD THAT - Parties have not disputed that the company petition has been filed with the prayer to direct the 1st Respondent to hold the Annual General Meeting for the Financial Year 2015-16 and the petition is pending for consideration before the Tribunal. The Tribunal has not deliberated on the issues on merit including the question as to which member is eligible or ineligible to take part in the AGM of The Madras Race Club (1st Respondent). Without deliberating on the issue aforesaid, based on the report submitted by an Hon ble Retired Judge of the Madras High Court the impugned order has been passed without notice to the parties who will be affected - No objection was called by the Tribunal for by the Tribunal against the report of retired Hon ble Judge about ineligibility of one or other person/member. It is a settled law that the Court or the Tribunal cannot pass an interim order, which amounts to grant of final relief without deciding the main case on merit. In this case as the interim order dated 13th December, 2017 passed by Tribunal amounts to grant of final relief, the order is set aside - In the effect all consequential order(s) passed by Tribunal are declared illegal. Appeal allowed by way of remand.

Summary

Issues:
1. Petition under Section 97 of the Companies Act, 2013 for calling an Annual General Meeting (AGM) of 'Madras Race Club' for the Financial Year 2015-16.
2. Appointment of an independent person to scrutinize the record and decide on the genuineness of club members for AGM notice issuance.
3. Impugned order appointing Chairman and Independent Observer for AGM without considering objections or deliberating on member eligibility.
4. Legality of passing an interim order amounting to final relief without deciding the main case on merit.

Analysis:

1. The petitioner filed a petition under Section 97 of the Companies Act, 2013 seeking directions to call the AGM of 'Madras Race Club' for the Financial Year 2015-16. The Tribunal appointed a retired judge to scrutinize the club's membership records for AGM notice issuance.

2. The Tribunal, based on the retired judge's report, passed an order appointing a Chairman and Independent Observer for the AGM without considering objections or deliberating on member eligibility. The order directed compliance with the law and Articles of Association, with reports to be filed post-AGM.

3. The Tribunal's order was challenged as it amounted to granting final relief without deciding the main case on merit. The court emphasized that interim orders should not grant final relief and set aside the order, declaring all consequential orders illegal.

4. The case was remitted to the Tribunal to decide on merit after providing notice to affected parties. If the retired judge's report is accepted, non-compliant members should be given notice, possibly through paper publication. The appeal was disposed of with these directions, without costs incurred.