B.N. VISWANATHAN AND ANR. Vs. TIFFINS BARYT ASBESTOS AND PAINTS LTD. BY THEIR AGENTS AND SECRETARIES, THE INDIAN TRADES AND INVESTMENTS LTD. AND ORS.

JUDGEMENT

(1.) THE question that arises for determination in this appeal is the validity of the election of the respondents as directors of a company called "Tiffin's Barytes Asbestos and Paints Limited", at a meeting of the general body held on 26 -2 -1051. The facts are not in dispute. The company was incorporated in 1945 and its first directors were five persons named in Article 49. One Veeramani was co -opted as a director and the strength of the directorate was thus raised to six. At the first annual meeting which was held on 24 -6 -1946 all the directors retired as provided in Article 53 and were re -elected. Before the next general body meeting which was held on 27 -8 -1947 three of the directors had resigned and a fourth resigned at that meeting with the result that the strength of the directorate became reduced to two. The next general body meeting was held on 30 -12 -1948 and thereafter no annual meeting was called. It was in this state of affairs that one of the shareholders Mrs. Ananthalakshmi Animal filed Appln. No. 3898 of 1950 under Section 79 (3), Indian Companies Act for a direction that a general body meeting might be convened by a Commissioner and that an independent chairman might be appointed to preside over the meeting.

(2.) SEVERAL contentions were urged by Mr. K. Rajah Ayyar in support of this appeal. It was firstly argued that the power which the general body has under the articles of the company is only to appoint directors in place of those who retire at the annual meeting; only one director actually retired at the meeting held on 26 -2 -1951 and that therefore the election of six directors was beyond the competence of the meeting; that there was no proper notice that six directors were to be elected at the meeting and that there was not even a resolution to that effect. Hence, it is urged, the election of defendants 2 to 7 is void. The complaint that there was not clear notice to the members that six directors were going to be elected is without substance. Ex. P -6 is the notice of the meeting to be held on 18 -2 -1951 and item 2 therein is as follows: "To elect directors. Mr. A. S. Padmanabhan retires at the meeting." It was argued that read as a whole Ex. P -6 would mean that a director is to be appointed in place of A. S. Padmanabhan who was to retire and that it would not convey the meaning that six directors were to foe elected. We are unable to agree with this contention. The retirement of A. S. Padmanabhan is stated as a fact and the notice does not state as is usual "to elect a director in place of Padmanabhan who retires." The business to be transacted under item No. 2 is generally to elect directors and not to elect a director. This objection is, therefore, overruled.

(3.) NOW it is doubtful how far the decision in - -, (1913) 108 L T 665 can still be considered to be good law. Its correctness was doubted in - - 'Worcester Corsetry Ltd. v. Witting',, (1936) Ch 640 in which the articles were similar to those in - - '(1913) 108 L T 665' (A) with the difference that the company had also adopted Articles 83 and 85 in table A in the Companies Act of 1908.