MOTHEY KRISHNA RAO Vs. GRANDHI ANJANEYULU

JUDGEMENT

(1.) APPELLANT , Mothey Krishna Rao, is the plaintiff, whose suit for a declaration that 'he is the Secretary and Treasurer of Sri Krishna Jute Mills Ltd. Eluru' has been dismissed with costs by the learned Additional Subordinate Judge of Eluru. Defendants 1 to 4 were Directors of this company when on 1 -7 -1950 a meeting of the Board ended in disorder and confusion which necessitated police intervention to restore order. According to the plaint, after the regular business on the agenda had been done, defendants 1 to 4 wanted other matters brought up, which led to this fiasco. After the plaintiff left the room, defendants 1 to 4 passed a resolution co -opting defendant 5 as director, suspending the plaintiff from the post of Secretary and Treasurer and appointing defendant 2 to look after the duties of Secretary and Treasurer temporarily. Plaintiff filed a petition under Section 144, Cri. P. C. in the Stationary Sub -Magistrate's Court and obtained an order in his favour, which was vacated by the High Court on 24 -8 -1950. Ex. A -5 is a letter written by defendant 2 as Chairman of the Board and Secretary and Treasurer to the plaintiff forwarding to him copy of the Board's resolution, which found him guilty of certain charges, suspended him from acting as Secretary and Treasurer, with a recommendation for his outright dismissal to an extraordinary general body meeting to be convened for the purpose along with the annual general body meeting to be held during the year. This course, however, was not adopted and on 25 -7 -1950 the Board removed the plaintiff from the post of Secretary. This suit was filed on 1 -10 -1950.

(2.) THE scope of the suit is very limited and confined to the Articles of Association of the Company. Plaintiff has not sued for damages for wrongful removal or dismissal, but for a declaration that he still continues to be the Secretary and Treasurer on the ground that the Board had no power to remove him under the Articles of Association. There has been no argument before us at all on the merits of the removal of the plaintiff or as regards any alleged misconduct by him, which justified his removal. Mr. Thiruvenkatachari for the appellant took his stand on this pure question of law that under the Articles of Association the Board of Directors was not competent to remove the plaintiff, and that the only competent authority, which could remove him was the general body of shareholders by a special resolution at an extraordinary general meeting.

(3.) THE plaint case is based entirely on the legal position sought to be made out of the fact that by this combination of circumstances the appointment of the plaintiff as sole Secretary and Treasurer was in fact from 1938, Article 111. It is common ground that plaintiff is himself a substantial shareholder and that the company did not itself run the Jute Mills from 1940 since when it had been annually leased out to the East India Commercial Company, Calcutta. There was, therefore, apparently not much day -to -day business for the sole Secretary to do.