9911796707
TMI Blog1968 (8) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, and the purported explanatory statement annexed thereto, and further injunction restraining the defendants from giving effect to or acting upon any resolutions which may be passed in any such meeting, and injunction restraining the defendants, their servants and agents from committing any further violation of the provisions of section 342 of the Companies Act, 1956, and from having the affairs of the defendant No. 1 managed by any person or persons other than defendant No. 2. The defendant No. 1 is Hoolungooree Tea Co. Ltd. and the defendant No. 2 is Andrew Yule and Co. Ltd. and the plaintiff-appellant is a shareholder in the defendant, Hoolungooree Tea Company. The defendant No. 2, Andrew Yule and Co. Ltd., is the managing agent of the said tea company. The appellant is a registered shareholder of 300 ordinary shares of the defendant tea company. The appellant alleges that through his friends and relatives he holds more than 10 per cent, shares of the tea company. The plaintiff instituted Suit No. 1009 of 1968 on 25th April, 1968, inter alia , for a declaration that the notice dated 30th March, 1968, and the explanatory statement annexed thereto are illegal, void and not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company. Counsel for the respondent on the other hand contended that the company in the present case gave a notice that the company wanted now the bare power to amalgamate. That is why a meeting was called. It was also said on behalf of the respondent that the company would later on have to make the necessary application for actual amalgamation. The notice impeached in the suit was said by counsel for the respondent not to be anything more than a notice for the proposed power of amalgamation. The notice also suggests that the company sought the bare power to amalgamate in aid of subsequent actual amalgamation with three other companies. It is not necessary on an interlocutory application to decide this question as to whether a company can amalgamate with other companies without specific power in the memorandum. The question is academic for the reason that the company seeks first to have the power to amalgamate and the company will thereafter make the necessary application for actual amalgamation. Interesting and elaborate arguments were made by counsel for both the parties as to various types of amalgamation. The various provisions of the Companies Act and, in particular, sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transferee company of any legal proceedings pending by or against any transferor company ; ( iii )the dissolution without winding up of any transferor company. It was said that a company would not have in its memorandum as one of its objects dissolution of the company. An order for dissolution of a company without winding up is thus made by the court in sanctioning compromise or arrangement which are forms of amalgamation. Reference may be made to Buckley on the Companies Arts, 12th edition, page 592, where in a discussion under section 287 of the English Companies Act, which corresponds to section 494 of the Companies Act, 1956, and section 213 of the Companies Act, 1913, and section 208C of the Companies Act, 1913, as amended in 1930, it is stated that a company cannot by clauses in its memorandum of association take power to effect that which section 287 authorises upon terms other than those which section 287 imposes. The sale of some part of a company's assets may be but the sale of all its undertaking and assets and the distribution of proceeds cannot be a corporate object. Buckley, therefore, states that the latter cannot under a clause for that purpose introduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be an amalgamation. The provisions to which reference has been made indicate that in all cases where a company desires to amalgamate under an order of court necessary application is to be made to a court. There are instances in the Companies Act of amalgamation by virtue of power in the statute and sections 396 and 494 illustrate that statutory power without recourse to power in the memorandum. In the present case, the company started with a resolution asking for power to amalgamate. It also appears to be a fact that the company has made an application for alteration of objects. Counsel for the respondent company rightly contended that in view of the fact that the company was only asking for a bare power of amalgamation in the resolution and the company would later on come with the necessary application before the court for amalgamation there was no scope for interlocutory relief of injunction. It is not necessary to express any opinion on the rival contentions of the parties as to whether the plaintiff's case is correct and as to whether the plaintiff is entitled to an injunction in the suit. Suffice it for the purposes of the present appeal to say that the company has ask ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the board. It was said, relying on the articles of the company, that there was management vested in the board and by reason of articles 124, 125, 127 and 129 the management of the whole affairs of the company was delegated to the managing agents and the board could not issue any notice. Reliance was placed on the decision in Haycroft Gold Reduction and Mining Co. case [1900] 2 Ch. 230, in support of the contention. It will appear in the present case that there is no challenge as far as the notice is signed by the board. The notice appears to be by order of the board. The notice is issued with the authority of the board. Articles 66 and 67 of the company empower the board to call an extraordinary general meeting. The board can call a meeting and sign the notice therefor. The managing agency agreement further says in clause 12 that the managing agents are to work subject to the superintendence, control and directions of the board. Article 137 and section 368 of the Companies Act also state that the managing agents are subject to the superintendence, control and directions of the board. It was said on behalf of the respondent that the issue of notice in the present case was a minist ..... X X X X Extracts X X X X X X X X Extracts X X X X
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