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TMI Blog1949 (3) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., a private company consisting of only two shareholders, the first and third respondents themselves. These two persons were presumably responsible for the drawing up of the constitution of the two companies; and it was agreed upon at the same time that a managing agency agreement should be executed, whereby the powers of management in the Thirunageswaram Weavers' Welfare and Benefit Co., Ltd., should be exercised by Ramaswami and Co., Ltd., for a term of 20 years, with a further extension of 20 years upon the resolution of the company at an ordinary general meeting Unfortunately, these two respondents fell out and so made it difficult for them to conduct either their own business of Ramaswami and Co., Ltd., or that of the Thirunageswara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raja Mudaliar was appointed as receiver on 4th December, 1948. The third respondent attempted to circumvent this order in favour of the first respondent by getting two men of his faction to file I.A. No. 54 of 1949 in C.M.A. No. 90 of 1948, to re strain the receiver from interfering with the affairs of the management of the Thirunageswaram Weavers' Welfare and Benefit Co. By that time there were proceedings pending in the High Court also; and so the learned District Judge dismissed that application. C.M.A. No. 52 of 1949 has been filed against the order of the District Judge dismissing I.A. No. 54 of 1949, while in C.R.P. No. 92 of 1949 the third respondent prays this Court to revise and set aside the order of the District Judge appointing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e improper to do so in certain circumstances. Our attention has been drawn to a number of instances in which receivers have been appointed; and although the particular case that we are here considering does not fall within one of the categories of cases in which receivers have been appointed by Courts, we think this is a case in which, if the allegations are accepted, the appointment of a receiver would be the most satisfactory way of dealing with the temporary difficulty that exists during the pendency of the suit. If the allegations of the first respondent be true, he is kept out of possession and management by the third respondent and seeks in his suit to have it declared that he is entitled to participate equally with the third responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. If from the managing agency agreement it appeared that that was so, there would be considerable force in the argument, and it would then not be proper on the part of a Court to appoint somebody in whom the Weavers' Welfare and Benefit Co., had no confidence, in the place of persons whom they selected because of the confidence that they had reposed in them. We have already pointed out that Ramaswami Co., was not appointed as agents by a company already in existence. The Directors of Ramaswami Co., were responsible for bringing the Thirunageswaram Weavers' Welfare and Benefit Co., into existence. The agreement makes it clear in very many places that Ramaswami Co., Ltd., is entitled to assign or transfer its interests, and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lting the first and third respondents again, for they are the leaders and spokesmen of their respective factions amongst the weavers. Another argument by the learned Advocate for the two petitioners in I.A. No. 54 of 1949 is that the services of Ramaswami Co. Ltd., were legally dispensed with for misconduct and that since Ramaswami and Co., Ltd., is no longer entitled in law to manage the affairs of the Weavers' Welfare and Benefit Co., the receiver, whose powers are not greater than those of Ramaswami and Co. would also be precluded from interfering with the affairs of the Weavers' Welfare and Benefit Co. We have been taken through the various affidavits and statements made on behalf of the third respondent and the faction that he lead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st respondent and others, that the meeting was regularly held, and that the requisite statutory majority was obtained in support of the resolution terminating the agency of Ramaswami and Co. Lastly, it is said that the receiver appointed was not a man of substance. The learned District Judge has given reasons which seem to us sufficient for selecting the person whom he appointed, as being a man outside the factions and of considerable experience in the business carried on by or on behalf of the Weavers' Welfare and Benefit Co. It is of course clear that the powers of the receiver are coterminous with the powers of Ramaswami and Co. It should not be necessary for us to say that the appointment of a receiver does not prevent the Weavers' We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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