9911796707
TMI Blog1979 (4) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... ivided into 50,000 equity (ordinary) shares of Rs. 100 and the issued capital of the company is Rs. 8,78,000 divided into 8,780 equity (ordinary) shares of Rs. 100 each. Under the articles of association of the company, the number of directors is limited to six. It is provided in the articles of association that one-third of the directors shall retire every year by rotation at the annual general meeting. The applicant and one Sri Kirti Prasad Manglik were due to retire on June 6, 1977. An annual general meeting was called for that purpose. The election was to be decided by poll. A meeting of the board of directors was held on June 4, 1977. The company received 117 proxies. The secretary of the company put up a note before the board rejecting five proxies of the shareholders, namely, Mrs. D. B. Thomas, Mr. J. R. Hollander, the principal of Christian College, Lucknow, and Sri. Amal Dutta. The proxy of Shrimati Santra Devi was, however, accepted as valid by the secretary. It may be noted here that Mr. J. R. Hollander and the principal of the Christian college had each sent 3 and 2 proxies respectively bearing different dates. From the facts found by the court below, it appears that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the sub-committee proceeded to obtain the votes of proxies adjudged valid, the plaintiff-applicant filed the present suit for the following reliefs : 1.An injunction restraining the sub-committee from announcing the result ; 2.An injunction restraining the sub-committee from taking into account the votes of the proxies rejected by the secretary of the company on June 4, 1977. Along with the suit, an application for a temporary injunction in the same terms as the relief claimed in the suit was moved by the plaintiff. This was contested by defendants Nos. 1 to 3, defendant No. 1 being the company and defendants Nos. 2 and 3 being the rival candidates for the election of the office of directors. The trial court rejected the application of the plaintiff-applicant on the following findings : 1The plaintiff-applicant had no prima facie case for restraining the sub-committee from announcing the result. The sub-committee was prima facie acting within the ambit of its powers conferred upon it under the abovementioned resolution. 2The rejection of the proxies by the secretary of the company on June 4, 1977, was illegal and unauthorised and consequently the plaintiff has no pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t after applying the established judicial principles applicable to the grant or refusal of temporary injunction there would be no scope for interference under section 115 of the CPC. Learned counsel for the opposite party further urged that the concurrent findings of the courts below to the effect that it was not a fit case in which the sub-committee should be restrained from announcing the result, and that the balance of convenience was not in favour of the plaintiff-applicant were sufficient to non-suit the plaintiff-applicant so far as this court is concerned, and having regard to the nature of the jurisdiction conferred on it under section 115, CPC, it is not open to a High Court to correct errors of fact, however gross or even errors of law unless the said error have relation to the jurisdiction of the court to try the suit itself. Learned counsel lastly urged that the plaintiff-applicant ought not to be permitted to challenge the correctness of a part of the resolution under another part of which he is continuing as a director even though he was due to retire on June 6, 1977. Learned counsel for the opposite party also urged that the finding of the court below even on the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction or procedure adopted by the courts subordinate to the High Court. In view of the law laid down by the Supreme Court and in view of the fact that both the courts below have upon a full consideration of the material on the record arrived at the conclusion that the plaintiff-applicant has neither a prima facie case, nor is the balance of convenience in his favour, this revision is liable to be dismissed on the ground that the case does not fall under any of the three clauses of section 11 5, CPC. The grant of a temporary injunction is an equitable relief. The courts below have refused to grant the same on legitimate grounds. Learned counsel for the plaintiff-applicant sought to challenge the findings of the court below on the question of balance of convenience on the ground that the plaintiff-applicant had a fundamental right as a shareholder in the management of the company. In my view, it is equally the fundamental right of the entire body of shareholders to choose their own management and that the result of the election held as far back as June, 1977, should not be withheld at the instance of a single individual particularly when that individual is a direct beneficiary of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an equitable relief, this was a legitimate consideration for the court below to refuse to grant an injunction to the plaintiff-applicant. Learned counsel for the applicant, however, urged that the sub-committee is attempting to exceed its powers in inviting the proxies adjudged valid to cast their votes. Learned counsel contended that the sub-committee was empowered under the resolution only to determine the validity or otherwise of the disputed proxies and to declare the result. Learned counsel urged that it was open to the plaintiff-applicant to contend that the sub-committee was exceeding its power. He submitted that such an objection is not barred by any principle of estoppel. Both the courts below have repelled this contention and have held that the sub-committee was authorised under the resolution to call upon the proxies adjudged valid to cast their votes. In order to appreciate this argument, it will be necessary to reproduce here the relevant portion of the resolution passed at the meeting of 6th June, 1977 : "Resolved that the committee of the shareholders consisting of M/s. Jai Narain Gupta, Mulk Raj Batra and Jai Hari Har Lal be and hereby appointed. This committee wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the applicant on the correctness of the findings of the court below on the question whether the plaintiff-applicant had a prima facie case, I may deal with that aspect of the matter as well. Briefly stated the submission of the learned counsel on the merits of the findings of the courts below was that the proxies had to vote only at the poll and the poll could not be held piecemeal. According to the learned counsel, the poll concluded on June 6, 1977, itself, and consequently the proxies could not be permitted to vote after the meeting had concluded on June 6, 1977. Elaborating his argument, learned counsel submitted that the proxies could cast their votes only at a meeting and in person, and not otherwise. The courts below have repelled this contention relying, inter alia, on a decision in the case of M. K. Srinivasan v. Watrap S. Subrahmanya Ayyar [1932] 2 Comp Cas 147 ; AIR 1932 Mad 100. In that case, it has been held that the actual process of holding the poll is not a meeting at all. I am inclined, prima facie, to agree with the view of the courts below. In my view, the poll had not concluded on June 6, 1977, and neither had the meeting. For the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manner in which a poll shall be taken. (2) The result of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll was taken. " The provisions of section 185 of the Act are wide enough to permit casting of votes by proxies by post. The resolution empowering the sub-committee to declare the result after determining the validity of the disputed proxies necessarily included within it the power to obtain the votes of such proxies even by post. At any rate, there was nothing in the resolution to bar this procedure. Learned counsel for the applicant also quoted a passage from Corpus Juris Secundum, Vol. 29, para 118, at p. 3031, which is as follows : "When permitted by statute, absentee may vote for a primary election. However, the statutory requisites must be complied with, at least as to matters to which compliance is mandatory." In my view, this passage is of no relevance for the determination of the question with which we are concerned. As mentioned above, the provisions of section 185 of the Companies Act are wide in amplitude, and it is permissible for the chairman to regulate the manner of taking poll as a result thereof. The ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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