1937 (5) TMI 5 - HC - Companies Law

Summary

Issues involved:
1. Validity of the rules made on 26th April.
2. Plaintiffs' right to inspect the records.
3. Plaintiffs' right to take copies of the minutes.
4. Necessity to imply a term in the contract for taking copies.
5. Plaintiffs' entitlement to a declaration of their rights.

Issue-wise detailed analysis:

1. Validity of the rules made on 26th April:
The court examined whether the rules formulated by the Committee on 26th April were valid. These rules stipulated that inspection of the minute book required an application containing specific details and a deposit, and prohibited taking copies or notes. The court found that the rules, in so far as they left the matter of inspection to the discretion of the Committee and prevented a member from taking copies or notes, were ultra vires. It was held that the plaintiffs had a contractual right of inspection under Article 34 of the Articles of Association, which could not be reduced to a mere right to claim inspection subject to the Committee's approval. Therefore, the rules on those two points were declared ultra vires and invalid.

2. Plaintiffs' right to inspect the records:
The plaintiffs, being members of the defendant Association, had a contractual right to inspect the records of the proceedings of the Committee under Article 34. The court noted that the plaintiffs had already been allowed to inspect the records, and thus, their claim for a declaration of their right to inspect was unnecessary. The court referenced the decision in Bank of Bombay v. Suleman Somji, indicating that a declaration could only be obtained if a case for an injunction had been established, which was not applicable here as the plaintiffs had already inspected the records.

3. Plaintiffs' right to take copies of the minutes:
The court analyzed whether the plaintiffs had a right to take copies of the minutes. It was noted that a contractual right of inspection does not of itself carry with it any right to take copies. The court referred to various precedents, including the Judicial Committee's decision in Bank of Bombay v. Suleman Somji and the case of Mutter v. Eastern and Midlands Railway Co., to conclude that a right of inspection does not imply a right to take copies. The court found that the plaintiffs' interests were sufficiently protected by the Common Law right of inspection and there was no necessity to imply any greater rights in their contract.

4. Necessity to imply a term in the contract for taking copies:
The court considered whether it was necessary to imply a term in the contract allowing the plaintiffs to take copies of the minutes. The court held that a term should not be implied unless it is driven to the conclusion that it must be implied. The court found that the Common Law right of inspection was adequate, and there was no indication that the intention was to give a right to take copies of the minutes. Therefore, it was not necessary to imply any term in the contract.

5. Plaintiffs' entitlement to a declaration of their rights:
The plaintiffs sought a declaration of their right to inspect and take copies. The court held that since the plaintiffs had already inspected the records, they could not obtain a declaration in respect of their right to inspect. As for the right to take copies, the court found that the plaintiffs did not have a right to take copies under the Common Law or the contract. Hence, the claim for a declaration of a right to take copies failed. The suit was dismissed with costs on scale No. 2, including reserved costs.