1947 (3) TMI 20 - HC - Companies Law

Summary

Issues Involved:
1. Validity of the general meeting held on 28th March, 1946.
2. Impracticability of holding the general meeting on 28th March, 1946.
3. Court's power to interfere under section 79 of the Companies Act if a meeting is alleged to be illegal.
4. Court's power to interfere under section 79 when it is still practicable to hold a general meeting under section 76(1).

Detailed Analysis:

1. Validity of the General Meeting Held on 28th March, 1946:
The learned District Judge found that although a meeting of some sort was held on 28th March, 1946, it was not a valid meeting. The Judge stated, "I think it likely that some sort of meeting was held at the office for a short time on the morning of 28th March but that the persons who attended it knew that the President had cancelled the meeting." The Judge emphasized that an illegal meeting could be disregarded and that the validity of the notice was crucial. Since the notice was not issued and posted until 15th March, 1946, there was no clear fourteen days' notice as required by Article 49 of the company's Articles of Association.

2. Impracticability of Holding the General Meeting on 28th March, 1946:
The Judge concluded that it had been established by the evidence that the calling of the annual general meeting on 28th March, 1946, as prescribed by the Articles of Association, had become impracticable. This conclusion was reached without a definite finding on whether the President had the power to call a meeting after 31st March, 1946. The Judge stated, "It is agreed that I have the power to call a meeting after 31st March. If the President also had that power, I am merely doing for him what he could do himself."

3. Court's Power to Interfere Under Section 79 of the Companies Act if a Meeting is Alleged to be Illegal:
The learned District Judge found that the meeting alleged to have been held on 28th March, 1946, was not a valid meeting and thus could not prevent him from exercising his power under section 79(3) of the Indian Companies Act. The Judge stated, "If the notice in this case was valid, the petitioner admits that he cannot ask me to intervene. If, on the other hand, the notice was invalid, I think he has a right to ask my help."

4. Court's Power to Interfere Under Section 79 When It Is Still Practicable to Hold a General Meeting Under Section 76(1):
The Judge did not record a definite finding on this issue but made observations indicating that if the President had the power to call a meeting after 31st March, 1946, the intervention by the Court was not necessary. However, the Judge concluded that the calling of the meeting had become impracticable in the manner prescribed by the Articles of Association, thereby justifying the exercise of power under section 79(3).

Conclusion:
The Court held that the general provisions contained in section 76 of the Indian Companies Act do not apply to the period between the time-limit fixed by a company's Articles of Association and the wider time-limit prescribed by section 76(1). The jurisdiction under section 79(3) can be invoked if the calling of a meeting becomes impracticable in the manner prescribed by the Articles of Association. The Court also held that it has the jurisdiction to determine the validity of a meeting when its jurisdiction under section 79(3) is invoked, and the order passed by the learned District Judge was within his jurisdiction. The petition in revision was dismissed with costs.