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TMI Blog1940 (2) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... Genuine Insurance Company. That is the essence of the matter. As a result, there have been since the latter part of October last two separate organizations, two rival boards of directors. This suit is in substance one by a member of what I shall call the "C" board for declarations which will oust the "B" board. The meaning of these two symbols will appear from the facts which in a simplified form I will now set out. The company is an insurance company on a modest scale. Recent legislation has imposed certain presumably necessary burdens or conditions upon such insurance companies in the interests of policy-holders. The directors, whom I will call the "A" board, who were functioning prior to 1st October, 1939, were as follows: I number them, because although I am at this stage now more familiar with their names, the names are at first very confusing: (1) Kumud Chandra Roy Chowdhury; (2) Khetra Mohan Chaterjee; (3) Sailendra Nath Bose. These three had been elected by the shareholders; (4) Subodh Mitra (elected by the policy-holders); (5) Sailen Sircar; (6) Hiralal Ghose; (the last two being appointed by the managing agents, and therefore under the articles permanent). On 29th S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... function and which may now be designated the "B" board, consisted of the six co-opted directors and three of the "A" board, Nos. 2,3 and 5. After 16th October, the "B" board purported at any rate to function and consisted of the six co-opted members, with Kumud Chandra Ray Chowdhury and Hiralal Ghose. Subodh. Mitra continued as the policy-holders' director. Owing to the disputes which subsequently arose challenging the status of the "B" board after 16th October (it is not disputed between 1st October and 16th October) parallel sets of minute books, both for the company and the directors' meetings were kept. In the "B" board's minute book is a minute which has not been put in evidence, but which I shall allow to remain on the record, of 30th October 1939. I use it for no other purpose, than to explain the history of the matter. It appears at this meeting, as appears from the documents put in, that certain disputes arose, as the result of which the "B" board co-opted the Chief Presidency Magistrate and sought the assistance of the police, one of the factors which has such an effect in promoting business in Bengal. The next day was that fixed for the extraordinary general meeting, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce" with another company called the Aryasthan Insurance Co. The relevant resolutions are in December 1939. It was at this stage, I presume, that the third group of opinion to which I have referred, the isolationists, who like neither the "B" board's amalgamation nor the "C" board's amalgamation, came into existence. Meanwhile, on dates which I have not for the moment before me, the deposit under the new Insurance Act not having been paid, the Government took steps to cancel the registration certificate of the company. As a result of this unfortunate imbroglio, we have an imposing set of proceedings: this suit by a director of the "C" board, the next suit by a number of shareholders to obtain a decision as between the "A" board and the "C" board, the "A" opinion and the "C'' opinion. There is an application to sanction the amalgamation under the Companies Act. There are, I understand, proceedings to challenge the decision of the Government. There are also proceedings in which the position of those supporting the ' C ' amalgamation is sought to be affirmed or established. At some stage of the proceedings, as to which I am not quite clear (I would be glad if counsel would inform me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of Association, for this reason, that the B board for whom Mr. Chaudhuri appears, rely upon this article to validate their position and upon nothing else. Mr. Chaudhuri, in my opinion, exercised very sound discretion in not relying upon what is relied upon in his written statement, namely, a company meeting of 23rd October 1939. As a result the minutes of this meeting which appear at page 29 of the brief but marked "not admitted" by the plaintiff have not been proved. Now Mr. Chaudhuri, while he has .deprived us of a description which would have delighted the heart of Gilbert and Sullivan, has achieved two very desirable objects for his client, first, he avoided a finding on the lines of two very popular English sayings: "That a little company law is a dangerous thing" and second, "That girls rush in where Khan Bahadurs fear to tread." I do not mean to be flippant but to indicate that Mr. Chaudhuri was very wise. He achieved an even more important object because he excluded an argument (which as it has not been put before me I will say no more than that it appears highly plausible), namely that there was an actual meeting on the 23rd, either an adjourned or a distinct meeting, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... English Schedules and is in our case mandatory, relying upon differences of language, ( e ) And lastly, that the last words of Article151 must be read in the language of the Schedules to the Companies Act where after "reelection" appear "as additional directors," and that this involves that at the meeting there must be a proposal to appoint additional directors, and that that is a condition precedent to any re-election of those who have been additional directors. I come back to Mr. Roy's point, and although, I think, I have followed the argument I still am not clear as to the philosophy behind it. It seemed to me, and so I put it to him in the course of the argument that his point must depend upon establishing that the vacancy created by the two classes of retiring directors is in some way different, and I have not been able to discover how it is different. I asked him whether the vacancy was one which according to his argument must be filled by directors. This was not his point although it was a point taken by Mr. Ghose, and that would be logical. He did contend on the authority of a certain case with which I shall deal in a moment that the difference was this. That in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh anything further. Blair Open Hearth Furnace Co., Ltd. v. Reigarit [1913] 108 L.T. 665: Mr. Roy used this for the proposition that director's directors were of a different quality to shareholder's directors. That they were a mutually exclusive body. Now, to some extent, while they are functioning, that is so, but as I read that case the decision amounts to no more than this : that where under a company's articles the maximum number of directors is fixed at seven but the company under another article has power to increase that number the company could not in a general meet-sing appoint additional directors that being a function delegated to the board, especially in view of the fact that it bad not under the appropriate article expanded the number. I do not think that this case is an authority on the status of directors retiring at the general meeting, or establishes that in respect of the retirement of each class, different consequences ensue. The next case, Spencer v. Kennedy : [1926] Ch. 125. This really relates to the operation of Article 148 or its corresponding article in the schedule ;and I may refer to it again when dealing with Mr. Ghose's point on the effect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never before the meeting ? That, in the facts of this case, it could not be before the meeting, or that the omission, if any, was on the part of the directors in not bringing it before the meeting, not an omission at the meeting. That in other words the company had no opportunity of making the omission and it is therefore not a meeting at which an election "ought to have taken place within the meaning of Article 148." That is the opposite contention to which it strikes me there can be the following rejoinder on the language of the articles, namely that at best it ought to have been put before the meeting, and if it ought to have been put before the meeting it ought to have taken place at the meeting. There still remains an omission to do something which should have been done at the meeting notwithstanding that that omission was due to an earlier omission. This I think is the essential point although I may not have expressed it with sufficient accuracy. It is a point upon which reading the sections there may be two opinions, but my opinion for what it is worth is, whatever view you take, there still remains something which ought to have been done at the meeting. For that reason I a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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