VIRENDER KUMAR GOEL Vs. RAGHU RAJ

JUDGEMENT

(1.) The Registered Office of Swadeshi Polytex Limited (Hereinaftler to be referred as the "defendant Co.") is situated at New Kavi Nagar, Ghaziabad (U.P.). This Company is also having its Head Office and carrying on business from 6th Floor, Samrat Hotel, Chanakya Puri, New Delhi. On 23-1-1986 the Secretary of the Company issued notices for the holding of 16th annual general meeting for 15th March 1986 at its Registered Office. Shri Raghu Raj was appointed as the Chairman of the annual general meeting of the Company. It appears that the shareholders of the Company were sharply divided and in order to have the control of the Company started collecting proxies from their supporters. Some of the discrantled elements from both sides also filed suits for injunction to hold the Annual General Meeting in different Courts in India, and obtained stay of giving effect to the resolutions which may be passed in the. said meeting or giving effect to, until the disposal of the injunction applications. The matter was ultimately brought to the notice of the Supreme Court in Civil Appeal No. 940-941 of 1986 in Special Leave Petitions (Civil) No. 3634 and 3633 of 1986. On hearing the parties at length, Their Lordships of the Supreme Court were pleased to set aside the ad-interim injunctions issued by the Courts and directed that the meeting or the adjourned meeting of the Company shall go on notwithstanding any order, direction or injunction to be passed by any Court in India and the resolutions may be given effect to, subject to any order of any court having jurisdiction that may be passed after considering the resolutions which may be passed in the light of the challenge to the same on merits. This order was passed on 14th March 1986. As a result of the above said order, the 16th annual general meeting of the Company was held on 15th March 1986. The result of the poll was declared by Shri Raghu Raj, as the Chairman of the said annual general meeting. The result was announced by handing over the same to the Secretary of the Company at Ghaziabad on 4-4-1986. This result was put up on the notice board at the Registered Office of the Company at 10 A.M. on 5-4-1986, and was also notified to the shareholders and was given a wide publicity in the newspapers all over India.

(2.) Shri Virender Kumar Goel is one of the registered shareholder of 50 equity shares of Rs. 10 each of the Company. It appears that he was not satisfied with the result of the poll and immediately moved in the matter by filing the present suit seeking the declaration that the instruments of proxy executed last by the members of the Company should prevail over those executed earlier regardless of the date mentioned on the instruments of proxy, and injunction restraining the defendants from permitting any person declared elected as members of the Board of Directors of the Company, to act as Directors of the said Company. The plaintiff also desired that the defendant No. 2 be directed to make an enquiry/investigation into the execution and for revocation of the various instruments of proxy lodged with the Company in accordance with Article 91 of the Articles of Association of the Company. Along with this suit the plaintiff also filed an application I.A. 2269/86 under Order 39, Rules 1 & 2, C.P.C. seeking the ad-interim relief during the pendency of his suit. This very application is under consideration.

(3.) In order to appreciate the scope of the plaintiff's suit and his application, few salient features of the controversy have to be kept in mind. As per the averments, the plaintiff in his capacity as the shareholder of the defendant No. 2 Company is vitally and substantially interested in its affairs. On 12-3-1986 he served the Company with a notice under Section 176(7) of the Companies Act 1956 expressing his intention to inspect the proxies lodged with it in respect of the annual general meeting. On the same day the Secretory of the Company informed the plaintiff that the proxies can be inspected from 14th Marcu 1986 onwards during the office hours. In response to the said offer the plaintiff carried out the inspection and pointed out the various irregularities in the instrument of proxies in his letter dated 14-3-1986. On the very next day the plaintiff deposited another letter with the Chairman alleging that from the perusal of the instrument of proxies it was apparent that the proxies in favour of one Dr. Raja Ram Jaipuria were of dated 31-3-1986 and on the said proxies dating has been done not at the time of execution of the form by the member, but by the proxy (holder) at the time of submission of proxy forms with the Company, with the object of making those forms the last proxy of the member submitted to the Company. By the same letter the plaintiff requested defendant No. 2 to make an investigation and to ascertain from the shareholders as to which proxy was executed by him last since the same shareholder had also issued proxies in favour of Shri Mahendra Swamp, failing him Shri K. S. Mehta and failing him Shri Nimesh Kampani. Till date his objections have not been investigated by the defendants.