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TMI Blog1956 (8) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and respondents 2 to 9 are its present directors. The first respondent mills was incorporated as a limited liability company in 1906, with the object of carrying on the business of spinning and weaving of cotton yarn and cloth. In consideration of the services rendered by the petitioner-firm in the promotion of the company, it was then agreed, and it was also put into the memorandum of association as clause 6, which runs thus: "In consideration of the services rendered by the firm of M/s. Al. Ar. Arunachalam Chettiar in promoting and starting the company, the firm of M/s. Al. Ar. Arunachalam Chettiar and the firm of Deevan Bahadur P. Somasundaram Chettiar of Devakottah, their heirs, executors, or administrators shall hereditarily be the secretaries and bankers of the said company and the said firms as from time to time constituted shall continue to be the secretaries and bankers of the company and Mr. P. Somasundaram Chettiar shall be appointed the local agent of the company by the said secretaries and bankers and shall continue to be such local agent of the company until his life time, and his successor or successors shall be appointed by the said secretaries and bankers. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of two years or until the loan to be advanced or the advance of which is procured by him is repaid with interest. The result was that in March, 1954, the petitioners' firm as well as their local agent, Kalairaja Chettiar, a member of that firm, withdrew from their managing agency and agreed to vest the entire management of the mills in the hands of Somasundaram Chettiar as the general manager, because he agreed to finance the mills and put it into working order. Accordingly, Somasundaram Chettiar was in full management and control of the affairs of the mills not only for the period of two years mentioned in the resolution, but he continues to hold that office down to this date. While so, after the coming into force of the new Companies Act on 1st April, 1956, and on the basis of some legal opinion which the company is said to have obtained as to the definition of "managing agent" in section 2 (25) of that Act, the board of directors met on 7th April, 1956, and passed a resolution to this effect: "Resolved to record that with the coming into force of the Indian Companies Act, 1956, the secretaries and bankers of the company have ceased to be entitled to the office of secretaries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners undoubtedly had as managing agents were in any manner affected by the definition of "managing agents" in the new Companies Act. We do not choose to investigate into those questions for the reason that even assuming that the petitioners had those rights intact and unaffected by the new Act, Mr. K. Rajah Aiyar, for the respondents, contended as a preliminary objection that, in the circumstances of this case, a writ of mandamus should not issue from this court. Under section 30 of the Specific Relief Act of 1877 as it then stood, neither the High Court nor any Judge thereof shall thereafter issue any writ of mandamus. That section has now been superseded by the present section 50 which is to the effect that nothing in that chapter shall affect the power conferred on a High Court by clause (1) of article 226 of the Constitution. As a first impression, it would appear as if the terms of article 226 are of much wider import and give almost unlimited power to issue a writ of mandamus against any person and under any circumstances and for any purpose whatever. But as we shall show presently, it is now well established that the seemingly wide powers under that article ought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can show that he has himself a legal right to insist on such performance. In the present case, it may be conceded that the petitioners have got such personal right. Then there is the proviso ( b ) to section 45 of the Specific Relief Act, which is to the effect that such doing or forbearing is, under any law for the time being in force, clearly incumbent on such person or court in his or its public character or on such corporation in its corporate character. Proviso ( d ) states that the applicant should have no other specific and adequate legal remedy. The contention against the maintainability of this writ petition advanced by Mr. Rajah Aiyar was based on the principles formulated in the provisos ( b ) and ( d ) of section 45 of the Specific Relief Act. Before we examine the scope and the applicability of those provisos to the facts of the present case, it would be convenient to clear the ground on the question whether, apart from the principles governing the issue of a writ of mandamus by the English courts, that is to say, the principles formulated in section 45 of the Specific Relief Act the court has got much wider powers under article 226 of the Constitution, and whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation v. State of Madras ILR [1954] Mad. 754 , a writ of mandamus was asked for against the State for preventing it from committing a breach of contract which the State threatened to commit. In that case also, the learned counsel repeated the contention that article 226 of the Constitution was wide enough to apply to cases which would not fall within the scope of a prerogative writ of mandamus as understood in England; and in repelling that contention, His Lordship the Chief Justice observed at page 761: "It is undoubtedly true that the extent of the power conferred on the High Courts under article 226 is much larger than they ever possessed before. But we have no hesitation in holding that it is not an unlimited power. In our opinion, the words 'to any person' mean to any person to whom, according to well established principles, writs like these mentioned in the article would lie; and the words any other purpose must be read in the context in antithesis to the words for the enforcement of any of the rights conferred by Part III." In this connection, reference may also be made to Kallmattam Thippaswami, In re [1951] 2 MLJ 171 , where an application was made under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication under section 45 of the Specific Relief Act would not be strictly applicable to an application under article 226 of the Constitution. Under the said article, this court has inter alia power in appropriate cases to issue to any person or authority any directions or orders for any purposes. Thus, article 226 has conferred almost unlimited powers on the High Court to make suitable orders or to give suitable directions which it can exercise in appropriate cases. The present case is, in my opinion, an appropriate case where the jurisdiction conferred by article 226 can be exercised." In this connection, the following observation at page 144 in the decision in Naubat Rai v. Union of India AIR 1953 Punj. 137 , seems pertinent: "In my opinion, the petitioner has not been able to bring his case within the principles underlying section 45 of the Specific Relief Act which are the principles which govern the issue of a writ of mandamus udder article 226." We will now take up the proviso ( b ) to section 45 of the Specific Relief Act, whether under the terms of that proviso the petitioners can ask this court for the issue of a writ of mandamus. According to that prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and do acts only in conformity with the memorandum and the articles of association. It is therefore contended that, in the present case, the agency rights which the petitioners claim and which are embodied in the memorandum and the articles of association are binding, upon the company, and, as such, under the law for the time being in force, it is incumbent upon the company to respect the rights of the petitioners within the meaning of clause ( b ) of section 45. No doubt, the memorandum forms the constitution of the company, and the articles, the rules regulating the conduct of the affairs of the company, and, as such, forms part of the law so far as the company is concerned. Nevertheless, those particular provisions in the memorandum and the articles of association were the result of a contractual arrangement entered into between the company and the petitioner with reference to their managing agency rights, and it is only those contractual rights that are put into the memorandum and the articles of association. It therefore seems to us that it is only because of the contractual obligations the company would be bound to respect the rights of the petitioners and not because they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely private right." A Full Bench of the Patna High Court observed in Surajmul v. Commissioner of Income-tax [1930] ILR 10 Pat. 218; AIR 1930 Pat. 538 , at page 539: "It is used principally for public purposes and to compel performance of public duties though it may also be used to enforce private rights when they are withheld by public officers." In the present case, the petitioners' complaint is that the first respondent-company, by its resolution of 7th April, 1956, refused to recognise the managing agency rights of the petitioner and declared that those rights had ceased to exist on and from 1st April, 1956, by reason of the new Act coming into force. The passing of that resolution was not in the nature of a public duty performed by the company. It was a matter entirely between the company on the one hand and the petitioners on the other in regard to certain private rights which the petitioners claimed. There was nothing in the nature of a public duty to be discharged by the company. No doubt, as contended by Mr. Nambiar, all corporations are in some respects public. He relied on the following passage at page 498 in High Prerogative Writs, Vol. I, by A.S. Chaudhr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HCR 43S , a case referred to by Mr. Nambiar. In the Bombay case, it was held that the High Court had jurisdiction to enforce by mandamus the right of duly elected directors by the company to exercise the functions of directors if such rights are interfered with by the company acting through its other directors. At page 444, we find the following observation: "I am at a loss to see by what other remedy the right of such persons could be enforced, unless a writ of mandamus were grantable; and the absence of any other remedy has been always regarded as a strong ground for the court to award such writ." So, the Bombay case was explained in the Madras case on the ground that a mandamus was issued in the Bombay case against the company as there was no other remedy. Decisions of other High Courts were brought to our notice such as Carlsbad M.W. Mfg. Co. v. H.M. Jagtiani AIR 1952 Cal. 315 , Dubar Goala v. Union of India AIR 1952 Cal. 496 , Union of India v. Elbridge Watson [1951] 20 ITR 400 , A.C. Gilbert v. Registrar, High Court, Allahabad AIR 1953 All. 678 , and Naubat Rai v. Union of India AIR 1953 Punj. 137 , to all of which, however, a detailed reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mandamus is a high prerogative writ, and is confined to cases of a public nature. The rule, therefore, must be refused." In Ex parte Briggs 120 ER 1141 it was held that an applicant for a mandamus to allow him to inspect and take copies from the parish accounts must show some tangible public ground for the application and that he cannot rest it upon his mere private right, as an individual, to inspect. Erle J. held that a parishioner's right to inspect the parish rate books is a mere private right and that, therefore, in order to entitle him to a mandamus to inspect, he must show, besides his private right, some grounds of a public nature. Having regard to these decisions and to facts of the present case, it seems to us that there are no grounds of a public nature involved in this case and that in denying the petitioners' right as managing agents, there is no question of any public duty involved, the matter being purely a private right between the petitioners on the one hand and the company on the other based upon contractual relations which are incorporated in the memorandum and the articles of association. In this connection, it will be relevant to note that Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposition is stated at page 107 of the same book as follows: "The court will, as a general rule, and in the exercise of its discretion, refuse an order of mandamus, when there is an alternative specific remedy at law which is not less convenient, beneficial and effective." At page 108, it is stated: "The court will not interfere to enforce the law of the land by the extraordinary remedy of an order of mandamus in cases where an action at law will lie for complete satisfaction." At the same time it is pointed out at page 109: "Apparently, the fact that an action for a mandamus will lie does not necessarily exclude the remedy by order of mandamus." These propositions appear to be so well established that we are indeed reluctant to refer to all the decisions, to which our attention was drawn during the course of the argument. We may, however, refer to a passage at page 1122 of the decision in In re Nagabhusana ILR 1950 Mad. 1119 , which is to the following effect: "In our opinion, the general rule applied to the case of writs like mandamus, prohibition and certiorari, namely, that these writs will not issue if there is another adequate remedy, should ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel, Mr. Nambiar, contended that in the circumstances of the present case, a suit for that specific remedy will not be maintainable, and, in support of his contention, he relied on the following decisions: Mothey Krishnarao v . Anjaneyalu [1953] 23 Comp. Cas. 90 , Ramkumar Potdar v. Sholapur Spinning and Weaving Co. Ltd. [1935] ILR 59 Bom. 218 Boulton Bros. v. New Victoria Mills AIR 1926 All. 87 , Gulab Singh v. Zamindara Bank Ltd. [1940] 10 Comp. Cas. 188 , Ramachandra v. Chinubai AIR 1944 Bom. 76 . In the Madras case, Mothey Krishna Rao's case (supra), the plaintiff filed a suit for a declaration that he was the secretary and treasurer of Krishna Jute Mills Ltd., Eluru, against four defendants who were the directors of the company and who adopted a resolution for removing the plaintiff from the post of secretaryship. The claim was based upon the memorandum and t he articles, as in the present case. It was held that the plaintiff had no cause of action against the company on the basis of the articles, because it was pointed out that under section 21 of the Indian Companies Act, not only a third party, but even a shareholder cannot sue the company on an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolved personal discretion, personal qualifications and confidence, citing as authority the decision in Ramachandra v. Chinubhai' AIR 1944 Bom. 76 . But then, the question is whether, if an injunction which in effect would amount to specific performance of a contract of personal service cannot be granted in an action for mandamus on the ground that such a contract is dependent on personal qualifications or volition of the parties as contemplated in section 21( b ) of the Specific Relief Act, a writ of mandamus can issue to effectuate the very same purpose. It is our firm opinion that if a person cannot get a particular relief he cannot certainly get over that difficulty by asking for a writ of mandamus and thereby obtain that very relief which he would not be entitled to under the common law. The object of mandamus is not to give a party what he is not entitled to under the law. The object is to supply defects of justice, and that justice may be done where there is a legal right but no specific legal remedy for enforcing that right. If in respect of a right there is no particular remedy, such as injunction or specific performance, the absence of such remedy could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e particular duty in question, in effect, specific performance, and not merely a remedy which in the end saves the party to whom the duty is owed unharmed by its non-performance." We fail to see how that observation supports the contention. What is important is that the remedy must be such as will enforce the right. The enforcement of the right may be in the form of various remedies. The question is whether the remedy that would be available will not be proper and adequate. The petitioners' rights are only the rights of managing agents with some remuneration attached to them. We fail to see why, even if they should fail to obtain specific performance or injunction, they should not be satisfied with adequate compensation in money. Mr. Nambiar, the learned counsel for the petitioners, did not allow the matter to rest there. He further contended that even if it should be considered that the normal remedies available to the petitioners would be adequate, the circumstances of the present case would warrant the issue of a writ, because there are certain well-recognised exceptions to that rule. In support of his contention, he relied on a recent decision of the Bombay High Court in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is fundamental rights under article 19(1)( g ) and it was clearly entitled to relief under article 226 of the Constitution. It was further pointed out that in that case, the remedy provided by the Act was of an onerous and burdensome character, because, before the applicant-company could avail itself of the remedy, it had to deposit the whole amount of the tax, and such a provision could hardly be described as an adequate alternative remedy. In other words their Lordships of the Supreme Court recognised that the principle that a court will not issue a prerogative writ when an adequate alternative remedy was available could not apply where a party came to the court with an allegation that his fundamental right had been infringed and sought relief under article 226. But the question is whether that exception is applicable to the present case, and for deciding that question it will be necessary for the petitioners to establish that in the present case there has been a violation of their fundamental rights. No doubt, to acquire, hold and dispose of property is a fundamental right, guaranteed under article 19(1)( f ) of the Constitution, and the contention of Mr. Nambiar was that the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other firm on the one hand and the company on the other. We are also unable to understand what the hereditary managing agency would mean with reference to a firm. Such hereditary rights were not conferred on the firm even as a joint family firm. On the other hand, clause 6 of the memorandum shows that the right shall be hereditarily vested in the said firms and their heirs, executors or administrators and in the said firms as from time to time constituted; that is to say, it contemplates even strangers, and not necessarily members of the joint family, becoming members of the firm. Let us, however, assume that the rights claimed by the petitioners are in the nature of property within the meaning of article 19(1)( f ) of the Constitution. Even so, the question is whether the writ prayed for should issue against the respondent-company and its directors. It is true that even in a case where the violation of fundamental right related to property, a writ of mandamus was issued by the Supreme Court in State of Rajasthan v. Nathmal [1954] SCR 982 . But it will be seen that in all those cases, the infringement of fundamental rights was by the State and the writ issued against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case. The learned counsel therefore contended that so long as the memorandum and the articles of association remained unamended, there was no power vested in the directors to terminate the services of the managing agents. But it will be seen that by their resolution of 7th April, 1956, they did nothing of that kind. They merely recorded their opinion, supposed to be based upon the opinion of their legal experts, that with the coming into force of the Companies Act, 1956, the secretaries and the bankers of the company had ceased to be entitled to the office, and accordingly, the said office had become vacant by operation of the law as and from 1st April, 1956. Even otherwise, it cannot be stated that the want of authority was apparent on the face of the record. That would depend upon the soundness of the legal opinion on which that resolution was based. Then it was contended that, notwithstanding the arrangement of March, 1954, Kalairaja Chettiar, though he ceased to be the local agent, nevertheless, continued as ex-officio director of the company, and for the director's meeting of 7th April, 1956, no notice was issued to him, and that, therefore, the resolution of that date w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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