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TMI Blog2015 (8) TMI 1515X X X X Extracts X X X X X X X X Extracts X X X X ..... a), (d) (e) of the memorandum and article of association of the defendant club. The plaint case proceeds that in the notice for AGM to be held on 31st August, 2007, there was no agenda for setting up the hotel project which was circulated to the members present in the said meeting and was thereafter passed by majority by raising of hands. It is further stated that Article 57 of the memorandum and article of association relatable to the business of the AGM stipulates the election of captain, committee, appointment and fixation of remuneration of auditors as ordinary business and the special resolution shall be transacted only after compliance under Section 173 (2) (3) of the Companies Act - The special resolution being not in conformity with the said clause is, therefore, bad and is also opposed to the object for which the club was established. It is undeniable that the application for temporary injunction was dismissed by the Trial Court as the Plaintiff/Opposite Party failed to make out any prima facie case and affirmed by the Court of appeal below, on the other point that the suit is otherwise hit under Section 10GB of the Companies Act. Before the revisional Court, the defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of the process of the Court - This Court does not find that the order impugned deserves any interference. Revision application dismissed. - C.O. 908 of 2015 - - - Dated:- 12-8-2015 - Harish Tandon, J. For the Petitioner : Mr. Anindya Kr. Mitra, Sr. Adv, : Mr. Siddhartha Mitra, Sr. Adv, : Mr. Soumya Roy Chowdhury, : Mr. Deepan Ku. Sarkar, : Mr. A. Deb. For the Opposite Party: Mr. Anirban Bose, Mr. Suvadeep Sen, Mr. D.N. Banerjee. JUDGMENT Harish Tandon, The order no. 61 dated December 19, 2014 passed by the learned Civil Judge (Junior Division), First Court, Alipore in Title Suit No. 2132 of 2007 rejecting an application under Order 7 Rule 11 of the Code is assailed in this revisional application. The plaintiffs/opposite parties filed the aforesaid title suit for declaration that the Annual General Meeting (AGM) held on 31st August, 2007 be declared, illegal, void and not binding being in violation of Article of association of the club. The following reliefs are claimed in the plaint: The plaintiff, therefore, prays for a decree against the defendant Club: a) for a declaration that the aforesaid Annual General Meeting held on 31.08.2007 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso from alienating and/or encumbering any land of the club for establishing a hotel. Both the Courts rejected the application for temporary injunction and the matter ultimately reached before this Court in C.O. No. 3317 of 2009. The order disposing of the said revisional application reveals that the Trial Court rejected the application for temporary injunction as the suit is not maintainable because of the embargo created under Section 10 GB of the Companies Act. Though the Appellate Court did not approve the finding of the Trial Court on maintainability of the suit but affirmed the ultimate decision as the majority members have unanimously decided to go ahead with the hotel project and, therefore, at the instance of the plaintiff, injunction should not be passed. Before this Court, the defendant/petitioner fairly conceded that there was no bar in maintaining the suit but defended the ultimate decision of both the Courts below by which the application for temporary injunction was rejected. In course of the hearing, the defendant/petitioner pointed out that clause 3 (g) of the memorandum of association empowered the defendant/company to sale, improve, manage, develop, lease, mortga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion, the reliance is placed upon a Division Bench judgment of this Court in case of Asansol Electric Supply Co. and Ors; -v- Chunilal Daw Ors; reported in 75 CWN 704, Jhajharia Bros. Ltd. -v- Sholapoor Spinning Weaving Co. Ltd. reported in AIR 1941 Cal 174. Secondly, he submits that the suit has become infructuous in view of the subsequent events as three subsequent AGMs of 2008, 2009 2010 have been held and the resolutions have been passed and, therefore, the plaint should be rejected. In support of the aforesaid contention, the reliance is placed on the judgment of the Supreme Court in case of Shipping Corporation of India Ltd. -v- Machado Brothers Others; reported in (2004) 11 SCC 168. Thirdly it is submitted that though some of the clauses from memorandum and article of association are incorporated in the plaint but the relevant clause which permits the power of the club to sale, alienate, mortgage or deal with any of its property has been suppressed. He further submits that the Court can look into the document produced for the first time by the defendant if the reference whereof can be traced from the plaint for the purpose of rejection of plaint under Order 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is primarily to promote the sports namely Golf. According to the learned Advocate for the opposite party, an individual member can challenge the resolution taken in the AGM if it is violative of memorandum and article of association of the club having numerous members and the leave under Order 1 Rule 8 of the Code is not mandatory. Lastly it is submitted that this Court in an earlier revisional application maintained the order of injunction even after noticing the clause 3 (g) of the memorandum and article of association and directed the Trial Court to expedite the suit, the application for rejection of the plaint based on the said clause is not maintainable. From the submissions of the respective counsels, it is relevant to narrate the facts from the plaint for the purpose of Order 7 Rule 11 of the Code. It is a settled proposition of law that the Court shall confine its perusal and scrutiny to the averments made in the plaint or the documents annexed thereto when the rejection is sought on the ground that the plaint does not disclose cause of action or is barred by law. The suit as it appears is a simplicitor suit for declaration that the AGM held on 31st August, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the meaningful reading of the observations made by this Court in an earlier revisional application, it appears that though the power to sale or deal with the property of the Company is conferred in the memorandum and article of association but the same should be inconsonance with the object and purposes for which the Company is formed. However, a plea was taken before this Court that since the memorandum and article of association of the petitioner club is neither produced at the time of presentation of plaint nor disclosed in the list of documents appended thereto, the Court shall not look into such document produced at the instance of the defendant for the purpose of Order 7 Rule 11 of the Code. The reference in this regard can be made to a single bench decision of the Rajasthan High Court in case of Bhagwan Das (supra) wherein it is held: Learned counsel for the opposite party may be right in urging that if the plaint is based on a document, then such a document may be considered as forming part of the plaint itself and the document can also be looked into, while considering the averments of the plaint, for the purpose of deciding the question that the plaint di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Charitable Trust Education Charitable Society -v- Ponniamman Educational Trust reported in (2012) 8 SCC 706, it is held: It is settled law that where a document is sued upon and its terms are not set out in the plaint but referred to in the plaint, the said document gets incorporated by reference in the plaint. This position has been reiterated in U.S. Sasidharan v. K. Karunakaran reported in (1989) 4 SCC 482 Manohar Joshi v. Nitin Bhaurao Patil reported in (1996) 1 SCC 169. The ratio which emerged from the aforesaid reports is that the document on which the cause of action is pleaded in the plaint, if not disclosed or included in the list of documents, becomes part of the plaint by necessary reference and can be looked at under Order 7 Rule 11 of the Code. The first clause of the memorandum and association is to promote the game of Golf and affording to its members all usual privileges, advantages, conveniences and accommodation of a golf club. Clause 3(e) thereof stipulates the lay out and prepare, adopt and improve the lands for the purpose of playing golf, bowls, or other games or any kind of athletic sports, amusement or recreations and to construct and/or demo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the decision in that case(See AIR 1950 Privy Council 80). 14. It is now an accepted principle of law that where an act by the majority of the share-holders is merely irregular and can be rectified by the majority of the share-holders, an action is not maintainable against that act, but if the act is ultra vires the company itself and is beyond the powers of the members of the company or its share-holders to ratify that act or to rectify the same, an individual member of the company may sue the company and its directors, for himself and on behalf of the other share-holders for declaring that act as illegal and for consequential reliefs. In such actions, however, the plaintiff has no larger right to relief than the company would have as plaintiff. The judgment rendered in case of Jhajharia Bros. Ltd. (supra) relied upon by the petitioner laid down that the suit at the instance of an individual shareholder of the Company on his behalf and on behalf of other unspecified shareholders against the Company alleging the fraud upon the minority may not have been perfectly instituted but carved out an exception in these words: 7. I propose, as shortly as I can without going int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ito justitiae i.e. it is a duty of the Court to take such action which is necessary in the interest of Justice. Every facts germinated after the litigation having a substantial nexus and/or bearing on the relief claimed in the suit may be taken into consideration for ends of Justice. The reliance can be placed in this regard to a judgment in case of Shipping Corporation of India Ltd.(supra), it is held: 25. Thus it is clear that by the subsequent event if the original proceeding has become infructuous, ex debito justitiae, it will be the duty of the court to take such action as is necessary in the interest of justice, which includes disposing of infructuous litigation. For the said purpose it will be open to the parties concerned to make an application under Section 151 CPC to bring to the notice of the court the facts and circumstances which have made the pending litigation infructuous. Of course, when such an application is made, the court will enquire into the alleged facts and circumstances to find out whether the pending litigation has in fact become infructuous or not. The petitioner-club says that the challenge is made to a resolution dated 31st August, 2007 when, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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