AMAR NATH MALHETRA Vs. M C S LIMITED

JUDGEMENT

(1.) This is plaintiff's application under Order 39 rule 4 read with Section 151 Civil Procedure Code for "setting aside the interim injunction" dated September 7,1991 granted by the learned Sub Judge. Delhi and for dismissal of plaintiff's application under Order 39 rules 1 and 2 CPC. The events leading to this application are as follows: The defendant company, which is a public limited company, fixed its Annual General Meeting (for short AGM') on September 9,1991 and in this regard circulated a notice dated July 1, 1991 informing the plaintiff, who is a shareholder of the defendant company in turn informed the latter that he will be moving the following resolution under Section 225(2) of the Companies Act, 1956 (for short the Act) at the forthcoming 'AGM':

(2.) Mr. P.N. Lekhi, learned counsel appearing on behalf of the defendant, submitted that the interim order dated September 7, 1991, was causing grave injustice, prejudice and hardship to the defendant. Accordinng to the learned counsel, since no 'AGM' has taken place it was not possible to declare the dividend payable to the shareholders for the year 1990-91, Learned counsel invited my attention to several letters of the shareholders demanding dividend for the year 1990-91. Mr. Lekhi, further submitted that the right under Section 225 of the Companies Act, 1956 cannot be exercised by an individual member and any resolution and notice in respect thereof can be effective only if the requirement of Section 188 is complied with, namely, the proposed resolution must be signed by members representing 1/20th of the total voting power of all the members having a right to vote or by at least 100 members having the said right and holding shares of the value of more than Rs. 1.00 lakh. As said condition was not complied with by the plaintiff, the company was not obliged to circulate the proposed resolution or to include the same in the agenda of the Annual General Meeting.

(3.) Mr. Mahna, learned counsel for the plaintiff contended that the order dated Septemebr 7, 1991 ought not to be varied or modified as the conditions contemplated under rule 4 of Order 39 of the Code of Civil Procedure for varying or modifying the order have not been satisfied. According to the learned counsel the letters asking the defendant to pay the dividend are of no consequence as the same have been managed by the company from the shareholders. It is the contention of the learned counsel that no hardship or prejudice in being caused by the order dated September 7,1991. On merits of the controversy it is submitted that a proposed resolution of which special notice is required need not comply with the provisions of Section 188 of the Act. It is the contention of the learned counsel that a single shareholder can invoke the provisions of Section 225 of the Act and the refusal of the defendant company to include the proposed resolution in the agenda of the 'AGM' was illegal and misconceived.