M RAMACHANDRA BAIL Vs. M R KANNIAH

JUDGEMENT

(1.) THIS revision case in filed by Mr. Ramachandra Bail, who was the second accused in C. C. 3475 of 1965 on the file of the learned Third Presidency magistrate, Madras. He was prosecuted under S. 282 (2) (b) of the Indian Companies act (Act I of 1956) hereinafter called the Act), convicted and sentenced to pay a fine of Rs. 200, or in default, to suffer simple imprisonment for two months. Along with him, one other person was prosecuted as the first accused, but he was found not guilty and acquitted.

(2.) THE question for consideration in this case, relates to the proper interpretation of the rule for retirement of directors in one-third proportion prescribed in S. 256 of the Act, in relation to the rule for the retiring age for directors prescribed in S. 280, and finally the penal provision enunciated in S. 282 of the Act. The circumstances of the case are briefly the following.

(3.) THE petitioner, Dr. M. Ramachandra Bail, was born on 8-2-1899. He completed 65 years on 8-2-1964. He was elected as a director of the Mylapore Hindu permanent Fund Ltd, which is a company as defined in the Act, at a General Body meeting held on 28th July 1962. At that time, he was less than 65 years old, and, therefore, he was within the age limit prescribed for the directors of companies, namely, 65 years, in S. 281 of the Act. Under S. 256 of the Act, which provides for the retirement of directors by rotation at one-third of the strength at every annual general meeting his turn to retire came at the General Body meeting (92nd) which was scheduled to be held, after the proper prior notice to shareholders, on 24-41965. Three other directors, namely, Messrs. Ramaswami Iyer, Shanmugham and balasundaram, were also due to retire on that date. But since the petitioner had completed 65 years of age on 8-2-1964, his reappointment as director had to depend upon a special resolution being passed, granting him exemption under S. 281 of the Act. There was also a special resolution brought for the consideration at the General Body meeting to be held on 24-4-1965, for granting such exemption to the petitioner. In the meantime, some other shareholder (other than the complainant in this case) filed a suit in the City Civil Court, for stay of the election, and the City Civil court issued an ad interim injunction order only for that purpose, at the meeting scheduled to be held on 24-4-1965. Item III in the Agenda for that meeting was the consideration of the election of directors in the place of the retiring directors. In consequence of the injunction order granted by the City Civil Court, at the meeting held on 24-4-1965, item III in the Agenda regarding the election of directors alone was not taken up for consideration; the other items were all taken up and considered; and the General Body Meeting was adjourned to 1-5-1965, for consideration of the above mentioned item III. At the time of the adjourned meeting on 1-5-1965, the stay order by the City Civil Court continued, and, therefore, the meeting was adjourned sine die without considering item III in the agenda.