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TMI Blog1959 (11) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... dian Companies Act, 1956, requires the convening of an extraordinary general meeting of the members under the directions of this court under section 391 of the said Act for the purpose of considering and passing the proposed arrangement for amalgamation. The applicant wants this procedure to be short-circuited on the ground that there was a general meeting of the members on June 15, 1959, and that they have approved unanimously this arrangement for amalgamation, and that, therefore, the. holding of an extraordinary general meeting of the company as required by section 391 to consider and approve the amalgamation would be superfluous and would cause hardship, unnecessary expense and undue delay. I am unable to accede to this request for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... older. In such cases the Act had made provision for protecting the rights of the minority or the individual shareholder. The principle upon which this is done is that the shareholders have a fiduciary responsibility to act not in the interests of a majority only but in the interests of the shareholders as a whole. Where this position is abused there is a fraud on the minority, as the term is understood in law, and there need not be necessarily fraud or deceit in the ordinary sense. The shareholders forming the company can ordinarily function only at the general meeting and at such other extraordinary general meetings as may be convened under the Act. They do so, as already stated, subject to such rights and obligations as attach to their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd experience to make full use of their rights as occasion arises and who are, in many cases, too numerous and too widely dispersed to be able to organise themselves.' The Millin Commission in South Africa expressed itself in almost similar terms when it stated: 'The assumption underlying existing legislation is that shareholders are able to take an active interest in the company's affairs and will always be able to use their voting power to the company's advantage. The assumption may have been justified in earlier days when the capital of the companies was largely in the hands of persons who knew enough about the business of the company to maintain an effective check on the activities of the directors they elected and were able to atte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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