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TMI Blog1998 (7) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... petition. The plaintiff is, therefore, entitled to salary from 1-6-1975, till the date of the filing of the suit and that amount comes to Rs. 90,000 besides interest thereon at 12 per cent per annum, totalling Rs. 15,000. It was prayed that a decree for Rs. 1,05,000 be passed in favour of the plaintiff and against the defendant. 2. In the written statement, the defendant alleged that there is no resolution available by virtue of which the plaintiff may have been appointed as Managing Director-cum-Chairman for a period of five years on the salary of Rs. 2,500 per month plus other perquisites as alleged. By the order dated 23-5-1975, the Director-General of Resettlement or his nominee was appointed as administrator of the defendant-company by the court keeping in view the ill-health of the plaintiff, nature of the serious allegations made against him and his admitted non-control over the branches of the company in Bombay, Calcutta and also the mis-management of the company. By yet another order dated 28-4-1978, passed in C.P. No. 29 of 1975, the plaintiff was removed from acting as Managing Director-cum-Chairman of the defendant-company. It is denied that the plaintiff is entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be the first managing director who shall also perform the duties of the chairman for the first five years and he shall hold the office of the Managing Director-cum-Chairman till the conclusion of the fifth annual general meeting of the company. The said resolution coupled with article 26 establish that Major R.S. Murgai was appointed as Managing Director-cum-Chairman of the defendant-company on 6-2-1974, on a salary of Rs. 2,500 per month plus other perquisites till the conclusion of the fifth annual general meeting of the defendant-company as alleged. It is the admitted case of the parties that in the aforesaid C.P. No. 29 of 1975 filed by Major P.N. Kaushik (Retd.) and others, the Director-General of Resettlement or his nominee was appointed as administrator of the defendant-company by the order dated 23-5-1975. The said company petition was finally disposed of by the order dated 28-4-1978, with the following directions : "I am accepting the petition relating to removal of Major Murgai from the post of Managing Director. In fact, he was removed from this post since the administrator was appointed by the court and he has not functioned as Managing Director after that. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assets and monies of the company were said to be unaccounted for (this refers to the period before the administrator took control). Hence, in case the shares of say Major Murgai have to be transferred to others, then the transfer should be effected at par, but the company should withhold any amount that it claims is due from Major Murgai, and similarly towards any other shareholder. In order to enable the reconstruction of the company, it was necessary to give such a direction. To clarify this point, or any other point, liberty is given to apply to this court; otherwise, this petition now stands disposed of." 6. Admittedly, Major R.S. Murgai filed an appeal being C.A. No. 13 of 1978 against the said order which came to be decided by the Division Bench by the order dated 5-11-1979. The operative part of this order which is relevant reads thus : "We are, therefore, of the view that the order dated 28-4-1978, passed by the learned company judge in C.P. No. 29 of 1975 is liable to be set aside. In doing so, however, we cannot overlook the effect of the working of the company under a certain management over a long passage of time of more than four years. We do not consider it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elect their directors again. As regards the shareholding in the company, we direct that the shareholding as now will be taken as correct till duly altered in the proceedings under section 155 of the Companies Act or any other appropriate proceedings. The parties will be free to now initiate appropriate proceedings for the rectification of the register of members if they have a grievance in respect of any of the shares held by them on the eve of the filing of the petition (20-3-1975) having been cancelled and the register of members of the company as today will be deemed valid unless so rectified." 7. Civil Appeal No. 77 of 1980 taken out against the aforesaid order by Major R.S. Murgai was dismissed by the Supreme Court by the order dated 7-2-1984, along with Appeal Nos. 78 and 873 of 1980. It may be noticed that the aforesaid order dated 28-4-1978, passed in C.P. No. 29 of 1975, removing Major R.S. Murgai, the plaintiff as Managing Director-cum-Chairman of the defendant-company under section 402 of the Companies Act was not disturbed by the Division Bench in C.A. No. 13 of 1978 but he was held to be eligible to be elected either as director or Managing Director in future of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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