CARDAMOM MARKETING COMPANY Vs. KRISHNA IYER

JUDGEMENT

(1.) The appellants are the plaintiffs in O. S. No. 138 of 1975 of the Munsiff's Court, Kottayam. The 1st plaintiff is a public limited company (hereinafter called the company) and the 2nd plaintiff a shareholder and secretary of that company. The defendant claims to be a Director and Chairman of the company. The suit was filed for a declaration that the respondent ceased to be a Director of the appellant company from 721974 and for other reliefs. The Trial Court dismissed the suit on the ground that the suit was bad for misjoinder of parties and cause of action and also on the ground that the respondent continued to be a Director of the company by virtue of S.256(4)(b) of the Companies Act, for short, the Act. In appeal, the Subordinate Judge reversed the finding of the Trial Court regarding misjoinder but confirmed the other finding about the status of the respondent, and dismissed the appeal. Hence the Second appeal.

(2.) The Second Appeal was admitted and notice given to the respondent on the following substantial questions of law:

(3.) A few more facts are necessary. The company was functioning smoothly till its 27th annual general meeting. The said meeting was notified to be held on 31-1-1974 on which date the respondent's term of office as Director expire It could not be held on that day for want of quorum. It was adjourned and another meeting was held on 7-2-1974 under the chairmanship of the respondent, who was then a Director. On 7-2-1974 nobody was proposed or elected in the place of the respondent. It was also not resolved that the vacancy need not be filled up. The respondent's case is that the meeting on 7-2-1974 was an adjourned meeting within S.256(4)(a) of the Act and since nobody was proposed on that day, he should be deemed to have been reappointed. The appellant's case on the other hand is that there was no meeting on 31-1-1974 and hence the meeting held on 7-2-1974 was not one contemplated by S.256(4)(a). The question that falls for consideration in this case, there fore, is the scope of S.256 and the impact of S.174(4) if any on it.