9911796707
TMI Blog2000 (3) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged on the ground that the suit having been instituted by the director of company founded on cause of action based on the proceedings of the meeting of the Board of directors and the resolution passed therein, to declare the same to be null and void , the right to sue in such suit does not survive on the death of the plaintiff who had filed the suit in her capacity as the director of the company. 3. The contention of Shri Usgaonkar, the learned advocate appearing for the petitioners, is that the cause of action to institute the suit by the original plaintiff arose in the Board of directors meeting held on 30-6-1992 and if the plaintiff was not a director, she could not have attended the meeting and, hence, there would have been n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present revision application is whether in the facts and circumstances of the case the right to sue survives in favour of the respondents upon the death of the original plaintiff. It is undisputed fact that the original plaintiff was the wife of the respondent No. 1 herein and the mother of the respondent Nos. 2, 3 and 4. It is also undisputed that the deceased plaintiff was the holder of 50 per cent shareholding in the petitioner No. 3 company prior to the resolution under challenge in the suit. 6. The Apex Court in Life Insurance Corpn. of India s case ( supra ) while considering the various provisions of the Companies Act, 1956 in relation to the rights of the shareholder has clearly held that the share is a moveable propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mismanagement of the company. 8. In the case in hand undisputedly, prior to the alleged resolution, the deceased plaintiff had 50 per cent shareholding in the share capital of the petitioner No. 3 company. On the death of the original plaintiff, the said shareholding became the part of the estate left behind by the deceased plaintiff. Being so, applying the test laid down by the Apex Court in the above two decisions, the respondents being the legal representative of the deceased plaintiff acquired right to the said 50 per cent shareholding in the said company. Consequently, the right to sue in the case in hand survived upon the representatives. Therefore, it cannot be said that the relief which has been prayed in the suit and the grieva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question in the case in hand. In the said decision it was held the only way in which the general body of the shareholders can control the exercise of the powers vested by the articles in the directors is by altering the articles, or, if opportunity arises under the articles by refusing to re-elect the directors of whose action they disapprove. It cannot be inferred from the said decision that there is any bar for filing any suit by any shareholder for the mismanagement of the company by its directors and for the same reason it cannot be said that such right will not survive to the legal representatives of the deceased shareholder in such suit. 12. Considering the Law laid down by the Apex Court in Life Insurance Corpn. of India s case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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