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TMI Blog1963 (11) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... st election was to fill up the vacancy to be caused by the retirement of the 5th defendant. The plaintiff was a candidate, and he contested the election, but was defeated, and the 5th defendant was elected. Then two share holders moved a resolution that the election of the two other directors may be postponed. The chairman disallowed the motion. Thereafter the plaintiff was proposed as a candidate to fill up the vacancy to be caused by the retirement of the 3rd defendant. But the chairman ruled that he was not qualified to stand as a candidate as he was already defeated in the contest with the 5th defendant. In the election the 3rd defendant was declared elected. The suit was for a declaration that the proceedings of the meeting as regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p right. So far as the corporate membership rights are concerned, a shareholder can assert those rights only in conformity with the decision of the majority of the shareholders. An individual membership right is a right to maintain himself in full membership with all the rights and privileges appertaining to that status. This right implies that the individual share holder can insist on the strict observance of the legal rules, statutory provisions and provisions in the memorandum and articles which cannot be waived by a bare majority of shareholders. The distinction between individual membership rights and corporate membership rights of a shareholder is founded on the following consideration: "By his contract with the company (and the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premacy of the majority will apply and the rule in Foss v . Harbottle [1843] 2 Here 461 will get-itself attracted. In that case, the minority of shareholders had a claim in damage against some of the directors by reason of the fraudulent act of those directors. At the general meeting, the majority resolved that no action should be taken against the delinquent directors. Two of the minority shareholders took out legal proceedings against the directors and others to compel them to make good the losses to the company; but the court dismissed the action on the ground that as the acts of the directors were capable of being ratified by the majority of the members, the court should not interfere. It was left to the majority to decide what wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He is a member of the company, and whether he votes with the majority or the minority he is entitled to have his. vote recorded an individual right in, respect of which he has a right to sue. That has nothing to do with the question like that raised in Foss v. Harbottle [1843] 2 Here 461 and that line of cases. He has a right to say, Whether I vote in the majority or minority, you shall record my vote, as that is a right of property belonging to my interest in this company, and if you refuse to record my vote, I will institute legal proceedings against you to compel you.' What is the answer to such an action?. It seems to me it can be maintained as a matter of substance, and that there is no technical difficulty in maintaining it. " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monies as damages alleged to be due to the company, the action should ordinarily be brought by the company itself. " The rule in Foss v. Harbotlle [1843] 2 Here 461 is subject to a number of exceptions. But it is not necessary to pursue that question on the facts and circumstances of this case. It was argued for the appellant, Telying on Ram Narain v. Ram Kishen 10 IC 515, 523 that all questions relating to the regularity of the meeting of the company and votings therein are matters relating to the internal management of the company. The question there was whether a shareholder was entitled to recover damages from the chairman who illegally refused to record the plaintiff's vote in that case. It was held that a shareholder who h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plaintiff had no right to move the civil court must be overruled. I therefore hold that the suit was maintainable. The only other point argued by counsel for appellant was that as the plaintiff prayed for holding a meeting for carrying on the election and as that was rejected by both the courts below, the plaintiff was not entitled to have the declaration of the invalidity of the 3rd defendant's election as director. It cannot be said from this circumstance that the plaintiff's suit was not maintainable. The plaintiff's suit was maintainable because there was the prayer for the consequential relief to hold a meeting from the stage at which the chairman declared the plaintiff to be incompetent to stand for election. I can see no point in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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