CENTURY FLOUR MILLS LIMITED Vs. S SUPPIAH

JUDGEMENT

(1.) AN extraordinary general body meeting of the shareholders of the Century Flour Mills Ltd., Madras, was fixed for September 14, 1974. The appellants in the original side appeal had applied under section 186 of the Companies Act for naming an advocate-chairman, and fixing the venue of the meeting. Though it was contended that the court had no power to appoint an advocate-chairman, the learned judge sitting on the company side declined to appoint an advocate on the ground that there was no need therefor. The appeal is from that order. Pending the appeal, a Division Bench of this court by an order dated September 12, 1974, on a relative application directed "that the convening of the general body meeting of the respondent herein on September 14, 1974, be and is hereby stayed pending further orders on this petition".

(2.) A certified copy of this order, as we find from the record of evidence, was served at the registered office of the company on september 13, 1974. Nevertheless, the meeting as notified was allowed to take place the next day. An application for contempt was taken out in consequence against one of the managing directors and another. But, on their tendering apology, which the Division Bench accepted since it was unqualified, the contempt petition was closed. C. M. P. No. 10935 of 1974 has been taken out in the form of a judge's summons under rule 9 of the Companies (Court) Rules, 1959, read with section 151 of the Code of Civil Procedure, to declare as void, illegal and inoperative the resolutions passed at the meeting of September 14, 1974. On the other hand, an application has been taken out by the respondents to dismiss the appeal itself on the ground that it has become infructuous since the meeting had already taken place. In the first instance, these matters were heard by a Division Bench, to which two of us were parties, but because of one or two decisions of this court rendered by Division Benches, it was considered necessary to refer the matters to a fuller Bench and that is how these matters have come before us. The only question for decision in these matters is whether the resolutions passed at the meeting on September 14, 1974, can validly stand, notwithstanding the fact that the meeting was held in violation of the inhibitory order aforesaid. What the appellants contend is that, since the meeting was held in violation of the inhibitory order, no wrong doer in respect thereof should be allowed to derive any benefit out of his own wrong. Alternatively, it is also put that in exercise of the inherent powers of this court under section 151 of the Code of Civil Procedure, this court should, in such circumstances, and in order to meet the ends of justice, put back the parties in the same position as they had been immediately before the order staying the proposed meeting was issued. We shall first examine whether in such circumstances this court can invoke its inherent power under section 151 of the code of Civil Procedure.

(3.) IN Manohar Lal v. Seth Hiralal, the view was expressed that section 151 of the Code of Civil Procedure itself said that nothing in the code should be deemed to limit or otherwise affect the inherent power of the court to make orders necessary for the ends of justice. It, therefore, follows that Order XXXIX of the Code of Civil Procedure should not be considered as placing any limit on the scope of the inherent power under section 151. IN nalla Senapathi Sarkarai Manradiar v. Ambal Mills (P.) Ltd. , which was quite akin to the circumstances in the instant case, a Division Bench consisting of anantanarayanan, Officiating Chief Justice, and Natesan J. , after accepting the apology and dismissing a petition for contempt for violating an injunction prohibiting the holding of a meeting, observed : ". . . . . . most certainly the proceedings of the meeting were void, the meeting itself having been conducted in disobedience of the interim injunction, and that will equally apply to the resolution or resolutions passed therein. We make a record to that effect. This situation at law has not been disputed by any of the learned counsel."