L RAMA SUBBU Vs. MADURA COLLEGE BOARD

JUDGEMENT

(1.) TWO of the members of the Respondent Company called Madura College, having been aggrieved by the order dated 10. 02. 1998 of the Company Law Board (hereinafter referred to as the "clb"), made in Company Petition No. 38 of 1997, have preferred this Civil Miscellaneous Appeal.

(2.) ACCORDING to the appellants, Madura College is a Company registered under the provisions of the Indian Companies Act, 1882, on 09. 06. 1905, having its Registered Office at Thiruparankundram Road, Madurai, Tamil Nadu within the jurisdiction of the District Court of Madurai. The Company is a non-profit Company and limited by guarantee and one which is attracted by Section 25 of the Companies Act, 1956. The Company consists of General Body and Executive Committee referred to as Board of Directors and this Board of Directors shall consist of 12 elected members and 3 ex-officio members and these ex-officio members do not have voting powers. At the time of filing of the Company Petition, the number of members of the Company was fixed at 66. Consequent to death of some members, the present membership of the Company has come down to 51. The admission of new members to the Board is governed by four Articles of the Company, i. e. Articles 6,7, 8 and 9. Articles 8 and 9 cover a special category of members to pay Rs. 25,000/- and these persons are called "patron Members" and they are admitted to the Company by the Board of Directors if any vacancy arises in the membership of the Company and these Patron Members are given priority over the other members. Further, a mere payment of Rs. 25,000/- would not automatically make the donor a member. He would become a member only if the Executive Committee approves his candidature and invites him to become a member. These Patron Members who pay Rs. 25,000/- need not go through the process of getting elected by the General Body as provided under Articles 6 and 7.

(3.) IT is the further case of the appellants that the above said two Articles 8 and 9 have been in existence since 1935 and in the year 1988, three persons were admitted by virtue of the said Articles. The Respondent Company is in the nature of Public Trust and hence, the said Articles are very much in the interest of the Company by which the Company may get additional Corpus and invite prominent citizens to become members. Another category of members who are covered by Article 6 and 7 is admitted by the General body and they are required to pay Rs. 500/- as life subscription and these persons are elected by 3/4th of the members present at the Meeting or in the event of such 3/4th of majority not having been secured, by a majority by 3/5th of the total number of votes, held on circulation by the Secretary.