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TMI Blog1991 (7) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... al body meeting of the company was held on February 25, 1986, in which meeting a resolution was passed removing one of the directors, N. Madhavan Nair, who was the managing director of the company. Thereupon, he filed Application No. 63 of 1986 before this court on February 25, 1986, for a declaration that the resolution removing him was invalid. He also filed another petition for stay of operation of the said resolution, as Application No. 64 of 1986. An order of interim stay was passed on March 3, 1986. By the time those petitions came up for hearing, the period of appointment of the managing director and board of directors of the company had expired. Therefore, this court, without going into the merits of those applications, directed a fresh election to the post of managing director and members of the board of directors. This court appointed advocate Shri V.A. Mohammed as the chairman to convene a general body meeting of the company for the purpose of conducting the elections. The court-appointed chairman convened a meeting on June 30,1986, in which the said N. Madhavan Nair was again elected as the managing director. Meanwhile, a misfeasance application was filed as Applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as four. When notices of the meeting were issued, the former managing director submitted an application as Application No. 187 of 1990 to stop the convening of the meeting. That application was dismissed by this court. The meeting was held on March 10, 1990. Out of the shareholders of the company, six were present in person and three by proxy at the general body meeting. Those nine members together held 2,630 shares out of 4,689 shares held by the present total number of members, viz. , 15. Originally, there were 17 members of whom two persons died. But those shares are not assigned to any member. In the meeting, the managing director and other directors were elected. A report to that effect was filed in court on March 22, 1990, by the court-appointed chairman. On this application, this court directed the impleadment of the newly elected directors. Another application was filed as Application No. 254 of 1990 for an order of stay of further proceedings pursuant to the election, till the disposal of Application No. 253 of 1990. That was dismissed by this court. The appeal filed against the order as M. F. A. No. 322 of 1990 was dismissed on June 18, 1990, with certain directions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 10, 1990. In the affidavit in support of that application, it was contended that the notice was violative of the provisions of sections 171, 173 and 257(1A) of the Companies Act. This court, by order dated March 8, 1990, held that, in view of clause 8 of the articles of the company, sections 171 and 173 will not apply in this case. The other objections were also overruled. This court also held that there was no infirmity in the notice issued by the chairman and the application was dismissed. The appeal in M.F.A. No. 333 of 1990 against the order in Application No. 187 of 1990 was dismissed by a Division Bench of this court observing that "it will be open to the appellant to urge various contentions including the contention regarding the order in Company Application No. 187 of 1990 in the course of trial of the main Application No. 253 of 1990". It may be observed that he has not, thereafter, challenged the validity of the notice. He was not impleaded as a respondent in this application (Application No. 253 of 1990). Even so, the contention raised by the applicant in Application No. 253 of 1990 may be examined. According to the applicant, the notice was bad for not annexing a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... private company which is not a subsidiary of a public company. Article 8 of the articles provides for the period of notice required as well as the matters to be specified in the notice. It is also provided in article 8 that, in case of special business, "the general nature of such business shall be given to the members in the manner hereinafter mentioned, or in such other manner as may be prescribed by the company in general meeting". Therefore, there is a specific provision in that article regarding the notice of a general meeting where a special business is to be transacted. Since there is such a provision, section 173, among other sections mentioned in section 170, will not apply to this company. Moreover, the notice contains all material facts concerning the business that was to be transacted in the meeting, viz. , election of managing director and other directors. The order to convene the meeting was passed after hearing all parties and the notice itself was approved by this court. The meeting was convened by the chairman appointed by this court and not by the company. Section 173 of the Companies Act is enacted for the protection of the shareholders so that the shareholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the candidature of a person for the office of director or the intention of a member to propose such person as a candidate for that office, by serving individual notices on the members not less than seven days before the meeting : Provided that it shall not be necessary for the company to serve individual notices upon the members as aforesaid if the company advertises such candidature or intention not less than seven days before the meeting in at least two newspapers circulating in the place where the registered office of the company is located, of which one is published in the English language and the other in the regional language of that place. (2) Sub-section (1) shall not apply to a private company unless it is a subsidiary of a public company". Sub-section (1A) refers to the "company". That can only mean the company mentioned in sub-section (1). Sub-section (1) shall not apply to a private company unless it is a subsidiary of a public company. Sub-section (1A) was incorporated in the Companies Act by Amendment Act 65 of 1960. That sub-section applies only to "the company" mentioned in sub-section (1). Thus, sub-section (1A) is really a proviso to sub-section (1) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25, 1986, a resolution was passed removing the managing director of the company, N. Madhavan Nair. He filed Application No. 63 of 1986 for a declaration that the resolution removing him was invalid. By the time that petition came up for hearing, his term had expired. Therefore, this court, without going into the merits of that application, directed a fresh election by holding a general body meeting under the chairmanship of a court-appointed chairman. It was under those circum stances that the meeting of June 30, 1986, of the company was held. There was a Misfeasance Application No. 59 of 1986 against the managing director, N. Madhavan Nair. On December 31, 1988, two of the shareholders of the company sent a requisition to the board of directors under section 169 of the Companies Act requesting it to convene an extraordinary general body meeting. The managing director did not convene any such meeting. One of the directors filed a suit, O.S. No. 394 of 1989, for an injunction to restrain the requisitionist's from holding such a meeting. Even though an order of interim injunction was granted by the trial court, that was stayed in appeal and the extraordinary general body meeting was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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