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TMI Blog1981 (3) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... he suit was filed for a declaration that the respondent ceased to be a director of the appellant-company from February 7, 1974, and for other reliefs. The trial court dismissed the suit on the ground that the suit was bad for mis-joinder of parties and cause of action and also on the ground that the respondent continued to be a director of the company by virtue of section 256(4)( b ) of the Companies Act, for short, "the Act". In appeal, the subordinate judge reversed the finding of the trial court regarding mis-joinder but confirmed the other finding about the status of the respondent, and dismissed the appeal. Hence the second appeal. The second appeal was admitted and notice was given to the respondent on the following substantial ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Companies Act bears the caption "Quorum of meeting". Section 174(1) prescribes the quorum. Section 174(2) provides that unless the articles of the company otherwise provide, the provisions of sub-sections (3), (4) and (5) shall apply with respect to the meetings of a public or private company. Section 174(3), (4) and (5) can be usefully extracted : "(3) If within half an hour from the time appointed for holding a meeting of the company, a quorum is not present, the meeting, if called upon the requisition of members, shall stand dissolved. (4) In any other case, the meeting shall stand adjourned to the same day in the next week, at the same time and place, or to such other day and at such other time and place as the Board may determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout quorum in cases other than where the meeting is called upon the requisition of members to be adjourned to the next week. There is no mention therein of such a meeting being adjourned for any reason other than the fact that there is no quorum. That cannot apply to a meeting contemplated under section 256(4) of the Act. For better appreciation of this case, we read section 256(4)( a ) and ( b ) : "(4)( a )If the place of the retiring director is not so filled up and the meeting has not expressly resolved not to fill the vacancy, the meeting shall stand adjourned till the same day in the next week, at the same time and place, or if that day is a public holiday, till the next succeeding day which is not a public holiday, at the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a valid meeting at which decisions could be taken. It is not a meeting where decisions cannot be taken. In a meeting without quorum no decision can be taken. Though section 174(4) loosely refers to a meeting without a quorum also as a meeting, the distinction between such a meeting and a meeting that section 256(4)( a ) contemplates cannot be lost sight of. A meeting in which its participants could deliberate and whereat decisions could be taken is a meeting different from a meeting without a quorum. Section 256(4)( b ) deals with an adjourned meeting, that is, a meeting held on account of the adjournment of the earlier meeting, whereat no decision was taken, and not a meeting consequent upon an adjournment of an earlier meeting for want ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quorum for the general meeting. At the meeting in question only two members were present. The court held that it was not a meeting at all and, therefore, no resolution to be confirmed. We agree, with respect, with the statement of law made there. A meeting without quorum is not a meeting whereat any decision could be taken. A decision in Re London Flats, Ltd. [1969] 2 All ER 744; [1970] 40 Comp. Cas. 593 (Ch. D) was also referred to at the bar. Shorn of unnecessary details, that case related to a meeting which originally started with the applicant and the respondent therein, who alone were entitled to attend and vote. The respondent purported to appoint himself as a liquidator, at which time the applicant left the meeting. In that case, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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