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TMI Blog1986 (5) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... ion from holding the annual general meeting in different courts in India, and obtained stay of giving effect to the resolutions which may be passed in the said meeting or giving effect to them until the disposal of the injunction applications. The matter was ultimately brought to the notice of the Supreme Court in Civil Appeals Nos. 940-941 of 1986 in Special Leave Petitions (Civil) No. 3634 and 3633 of 1986. On hearing the parties at length, their Lordships of the Supreme Court were pleased to set aside the ad interim injunctions issued by the courts and directed that the meeting or the adjourned meeting of the company shall go on notwithstanding any order, direction or injunction to be passed by any court in India and the resolutions may be given effect subject to any order of any court having jurisdiction that may be passed after considering the resolutions which may be passed in the light of the challenge to the same on merits. This order was passed on March 14, 1986. As a result of the above said order, the 16th annual general meeting of the company was held on March 15, 1986. The result of the poll was declared by Shri Raghu Raj, as the chairman of the said annual general mee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rman alleging that from the perusal of the instruments of proxies, it was apparent that the proxies in favour of one Dr. Raja Ram Jaipuria were all dated March 13, 1986, and on the said proxies dating has been done, not at the time of execution of the form by the member, but by the proxy (holder) at the time of submission of proxy forms with the company, with the object of making those forms the last proxy of the member submitted to the company. By the same letter, the plaintiff requested defendant No. 2 to make an investigation and to ascertain from the shareholders as to which proxy was executed by him last, since the same shareholder had also issued proxies in favour of Shri Mahendra Swarup, failing him Shri K. S. Mehta and failing him Shri Nimesh Kampani. Till date, his objections have not been investigated by the defendants. It is the case of the plaintiff that from a newspaper report appearing in the 1st April issue of the Financial Express, the plaintiff has come to know that the defendants are proposing to declare the results of the poll taken at the said annual general meeting on April 5, 1986. If the results as aforesaid are declared by the defendants without making t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the chairman and/or the company to investigate into the validity of the said proxies. The defendants have not cared to investigate into the validity of these proxies, nor any orders on his letters/objections have been passed by the chairman, and thus left with no other option, the plaintiff has filed the present suit and the application. Notice of the suit as well as the application was issued to the defendants for April 7, 1986, and in the meantime, the defendants were directed to deposit the proxies in the court by that time. Immediately on the service of the summons of the suit and notice of the application, the defendants filed the reply to the plaintiff's application, raising therein a number of preliminary objections, inter alia , alleging that the plainiff's suit/application is misconceived, incompetent and untenable in view of the order dated March 14, 1986, of the Hon'ble Supreme Court of India; that the alleged cause of action in its entirety, of plaintiff's own showing arose, if at all, at Ghaziabad, outside the limit of the territorial jurisdiction of this court and as such this court has no jurisdiction to entertain and try the present suit, that the matters compla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company, if not to what effect ? 2.Whether the proxy form bearing the date given by the share holders, will prevail over the proxy with a later date mentioned by the nominee ? 3.Whether the chairman of the annual general meeting considered and disposed of the objections of the plaintiff contained in his letters dated March 15, 1986, and April 2, 1986, if not to what effect?" These questions can easily be disposed of by referring to the pleadings and the various documents on which the parties have placed reliance. However, at the outset, the principles relevant for the grant of the temporary injunction have to be kept in mind. In order to obtain the interim relief, the plaintiff must show ( i ) that he has a prima facie case; ( ii ) that he is likely to suffer irreparable injury if the injunction is not granted ; and ( iii ) that the balance of convenience lies in his favour. The term "prima facie" has not been defined in any statute and although no attempt has been made to encase this term within the confines of the judicially evolved definition or to evolve an inflexible formula for universal application, the term has been judicially interpreted to mean a case whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d vote instead of himself; but a proxy so appointed shall not have any right to speak at the meeting. The instrument appointing a proxy shall ( a ) be in writing;, and ( b ) be signed by the appointer or his attorney duly authorised in writing or if the appointer is a body incorporate, be under its seal or be signed by an officer or an attorney duly authorised by it. The relationship between a shareholder and his proxy is that of principal and agent. As a rule, a proxy is not revoked unless written notice of the revocation by death, insanity, transfer of shares or act of revocation has been received by the company before the meeting or adjourned meeting. A proxy signed in blank as to the name of the appointee, or as to the date of the meeting and delivered with authority to fill up the blank, is not open to objection if, when deposited with the company, the blank has been duly filled up. It is not a deed and there is, therefore, no objection to the blank being filled up by the agent of the appointee, even though appointed by parole. The instrument in such circumstances is not complete until it is filled up, and when filled up, the only question is whether it is duly stamped. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proxy be considered as the date of the filing of the same in the registered office of the company is not convincing. Once the blank proxy without date has reached the hand of the appointee, it can safely be presumed that an authority was given to him to fill up the blanks with his own name or the name of any other person with date and to use the proxy, for the purpose of voting at the meeting. The very object of sending of the proxies by interested persons to their friends and acquaintances is to obtain the friendly votes. If a shareholder signs the proxy in blank, it is his own fault, and he should be careful enough not to do so. Once the proxy has been properly filled up on a particular date by the person to whom it is entrusted, the later date-has to be taken as the date of the signing of the proxy by the shareholder, even though another appointee may also be in possession of a blank proxy of the same shareholder, of a prior date. Learned counsel for the plaintiff has neither drawn my attention to any such rule nor has cited any authority in support of this submission which prima facie has no substance. Furthermore, the grievance in this behalf can only be raised by the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Wall v. Exchange Investment Corporation Ltd. [1926] 1 Ch p. 143, a similar situation arose and was disposed of by Pollock M. R. The relevant portion of his judgment reads as under (at page 145) : "In my opinion, this appeal must be dismissed. It raises a short but interesting point as to the powers of the chairman under one of the articles of association of the defendant company. [His Lordship stated the facts and the provisions of article 58 and continued : ] It has been said on behalf of Mr. Wall in a succinct and good argument that article 58 does not prevent the matter from being reconsidered by the court, and that Mr. Okell was wrong in the decision at which he arrived. It may perhaps be of service to note that the word 'deemed' seems to be necessary, because, if the chairman's discretion or powers are to be wide enough for him to determine the matter, and he does not disallow the votes, they are to stand and to be valid for all purposes whatsoever" In this case, the chairman has come to the conclusion that the objections to the proxies have no substance with the consequence that they are deemed to be valid. This decision of the chairman cannot be set aside because th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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