CHENNIMALAI YARNS PVT LIMITED Vs. S CHANDRASEKAR

JUDGEMENT

(1.) THESE revisions are directed against the orders of principal Subordinate Judge, Coimbatore made in I. A. Nos. 452, 453/1998 in O. S. No. 541/1998, allowing the petition filed by the Plaintiff to implead D-6 individually and in his Representative Capacity for all other shareholders and regarding the territorial jurisdiction of the court at Coimbatore. The Defendants 1 and 2 are the Revision Petitioners.

(2.) NECESSARY facts for the disposal of this revision could briefly be stated thus : O. S. No. 541/1998:- The first Defendant M/s. Chennimalai Yarns Private limited has been carrying on business at Chennimalai and having its registered office at Coimbatore . Defendants 2, 3 and 4 are the Directors of the D-1 company; D-5 is the former director of the company and a share holder. D-6 is also a share holder in D-1 company. Case of the Plaintiff is that he is the Managing Director of D-1 company and has been so appointed for a period of five years. The company has made borrowings from Tamil Nadu Industrial Investment Corporation Limited, state Bank of India, M/s. Fidelity Finance Limited and other financiers. D-1 company is heavily indebted. The Plaintiff has furnished his properties as security for the loan obtained by D-1 company. The Plaintiff's wife has also furnished her property as security for the loan borrowed by the D-1 company. While so, with a view to defeat the lawful claim of the Plaintiff. On 15. 05. 1998 the defendants 2 to 5 have adopted a Resolution to the effect of removing the plaintiff from the office of the Managing Directorship of D-1 company. The plaintiff has alleged that the Resolution is not true and invalid under law. The Defendants are also making arrangements in bringing about another General body Meeting on 24. 06. 1998 to remove the Plaintiff from Directorship. Plaintiff has filed the suit to declare the impugned Resolution dated 15. 05. 1998, that sought to remove the Plaintiff as Managing Director of the first Defendant, as null and void and also for a Decree for Permanent Injunction restraining the defendants 2 to 6 from holding the Extraordinary General Body meeting on 24. 06. 1998 and also restraining the Defendants 2 to 6 from incurring any further liability, by borrowing loans or availing further credit facilities from other Defendants.

(3.) I. A. No. 452/1998 was allowed by the trial court finding that the objection regarding the Representative Capacity of D-6 cannot be raised by the Defendants at the initial stage. It was held that whether D-6 represents other shareholders or not could be determined only at the time of trial. Finding that the Plaintiff can sue D-6 for himself and in his representative Capacity representing the other shareholders, the trial court has allowed the application. Raising serious objection to the maintainability of the suit at Coimbatore, the learned counsel for the Revision Petitioner has submitted that when most of the Directors are residing in Chennimalai and when the disputed Resolution dated 15. 05. 1998 emanates from Chennimalai, certainly, jurisdiction of the Courts at Coimbatore is not attracted.