JAIN Vs. DELHI FLOUR MILLS COMPANY LIMITED

JUDGEMENT

(1.) This Order will also dispose of Company Petitions No. 1 and 2 of 1973, which have been filed by the husband of the petitioner and another shareholder, respectively, of the Delhi Flour Mills Co. Ltd. (hereafter referred to as the Company) for calling a meeting of the Company (the calling of which "otherwise" has become "impracticable"), and for certain other directions (which are not uniform in all the three petitions) without which the petitioner's purpose in calling such a meeting may not be served. Under S. 186 of the Companies Act of 1956 (hereafter called the Act), the Court has been given power to call a meeting other than an annual general meeting; section 167 of the Act enables the Central Government alone to call an annual general meeting. To the details of these I shall revert later. It is necessary, to start with, to notice briefly the facts which have led to these petitions.

(2.) The Company was registered in the year 1916 as a public limited Company, but is stated to have been controlled by the husband of the petitioner, R. K. Jain (petitioner in C.P. 1/73) and some of their family members; Oudhvir Prasad (petitioner in C.P. 2/73) who holds 63 ordinary shares of Rs. 10.00 each, is the son-in-law of the petitioner and was also a senior executive of the Company. The petitioner and her husband had no male issue and had, therefore, adopted R. P. Jain. the brother-in-law of Sheel Chandra. Yogesh C. Gupta is said to be a friend of Sheel Chandra and R. P. Jain. There seems to have been considerable animosity between the petitioner and her husband on one side and their adopted son R. P. Jain as well as Sheel Chandra and Yogesh C. Gupta, on the other.

(3.) The Articles of Association of the Company (96) provide for eight directors, but there were actually three : (1) R. K. Jain (2) Sheel Chandra and (3) Yogesh C. Gupta. It is common ground that R. K. Jain had been appointed a managing director of the Company for five years under an agreement to take effect from 5-10-1967 i.e. till 4-10-1972. Nonetheless he had also been in fact re-elected at least once, in 1969, as a director, even subsequent to the said agreement. Sheel Chandra, who had retired by rotation was re-elected on 30-4-1968. Yogesh C. Gupta who had to retire by rotation next, according to the petitioner, was not in fact re-elected and had to retire at the farthest when the annual general meeting had to be held, namely, 30-4-1971. The accounting year of the Company ends on the 31st October of each year. The accounts for the year ending 31-10-1969 were passed at the annual general meeting held on 30-4-1970. There has been no annual general meeting thereafter.