RAMCHANDIRAM MIRCHANDANI Vs. INDIA UNITED MILLS LTD

JUDGEMENT

(1.) THE respondent No. 1 is a public limited company called the India United Mills Ltd. (Hereafter called ' the Mills' ). Messrs. Agarwal and Co. , is a partnership firm and is the managing agent under an agreement with the company. Under a deed of partnership the Agarwals had five partners, one of them being Bagaria More Co. Ltd. , (hereinafter called "b. M. , and Co. ") The meaning agency agreements as finalised mention each of the partners by name as parties to the document and give right to each one of them and survivor to continue to be the managing agent until the period expires. B. M. And Co. , executed a power of attorney in favour of defendant No. 2 giving him all the rights of management on its behalf in the Agarwals. The general meeting of the Mills was called on 20th November 1959 by a notice dated 22nd September 1959. Defendant No. 2 offered himself as a candidate for re-election and at the meeting he was re-elected as a director.

(2.) THE plaintiff raised a present suit alleging that since the defendant No. 2 was an officer or employee of B. M. , and Co. , who was a partner in the Agarwals, the Managing Agents, he could not be elected a Director except by a special resolution passed as required by section 189 of the Companies Act. His election as director was challenged under Section 261 (1) sub-clauses (d) and (f) read with sub-clause (a) of the Companies Act. Defendant No. 2 contested the suit on the ground that no special resolution was required since he did not come within any of the provisions of section 261. His contentions found favour with the learned trial Judge as a result of which he dismissed the suit. It is against this judgment that the present appeal is brought to this Court.

(3.) THE effects, good and bad, of the managing agency system have been well expressed by Mr. Justice Pratt in Parshuram Dataam Shamdasani v. Tata Industrial Bank Ltd. , 55 MLJ 697 at p. 699 (Suit NO. 2643 of 1923 OCJ of this Court ). He says: