NEMI CHAND Vs. EDWARD MILLS COMPANY LIMITED

JUDGEMENT

(1.) This is an appeal by special leave granted by the Privy Council and limited to the question of court-fee, viz. Whether on the memorandum of appeal presented to the High Court court-fee was payable under s. 7 (iv) (c) or Art. 17 of Sch. II, Court-fees Act.

(2.) The question whether the memorandum of appeal was properly stamped arose in the following circumstances : Edward Mills Co., Ltd., is a joint-stock company situate in Beawer, Ajmer Merwara. In accordance with the provisions of the articles of the company, one Seth Gadh Mal Lodha and Raj Sahib Moti Lal (respondent 2) were its chairman and managing director respectively since 1916. Seth Gadh Mal Lodha represented his family firm of Kanwal Nain Hamir Singh While Raj Sahib Moti Lal represented the joint family firm of Champa Lal Ram Swaroop. On 1-7-1938, Raj Sahib Moti Lal and his firm were adjudged insolvent by the Bombay High Court. The result was that respondent 2 had to vacate the office of managing director and the members of his firm also became ineligible for it. By a resolution of the Board of Directors passed on 18-71938, Gadh Mal Lodha was appointed to take the place of Raj Sahib Moti Lal as managing director. Gadh Mal Lodha died on 11-1-1942 and the board of directors then appointed Seth Sobhagmal Lodha to act as chairman as well as managing director till the appointment was made by the company. An extraordinary meeting of the company was called for 8-2-1945 for the election of the chairman. At this meeting conflict arose between the two groups represented by Sobhagmal Lodha and Moti Lal. The chairman, therefore, dissolved the meeting but the supporters of Moti Lal continued to hold it and passed a resolution appointing him as the sole agent and chairman for a period of twenty years on a remuneration equal to ten per cent, of the profits of the company. It is this resolution of 8-2-1942 which has led to the present dispute.

(3.) Seth Sobhagmal in the situation that arose approached the District Judge of Ajmer with the prayer that a general meeting of the company may be held under the supervision of the Court. This request was allowed on 11-2-1942 and the Court ordered that the meeting be held on 12-21942 under the chairmanship of Seth Sobhagmal. Respondent 2 being aggrieved by this order, filed an application in revision in the Court of the Judicial commissioner impugning the order. The learned Judicial Commissioner allowed the revision and directed that the resolution of 8-2-1942 should be acted upon.