NAVA SAMAJ Vs. CIVIL JUDGE CLASS 1

JUDGEMENT

(1.) THIS application under Article 227 of the Constitution and Sections 115 and 151 of the C. P. C. for the issue of a writ of certiorari for quashing an order, dated the 18th February 1965 of the Civil Judge, First Class, Rajnandgaon, holding that his court has jurisdiction to try a suit filed by the opponent No. 2, Shri Hajarimal, and for a direction prohibiting the civil Court from proceeding with the suit or any application made therein, has been made in the following circumstances.

(2.) THE petitioner No. 1, the Nava Samaj Ltd. (hereinafter referred to as the company) is a public limited company incorporated under the Indian Companies act having its registered office at Nagpur in Maharashtra State. The main object of the Company, as mentioned in the Memorandum, is the printing and publishing of a news-paper called 'nagpur Times' at Nagpur. The second petitioner, the Nagpur times Trust, was brought into existence under a trust deed, dated the 9th May 1957 and is the managing agent of the Nava Samaj Ltd. The third and fourth petitioner, Shri K. K. Thakur and Dr. M. B. Niyogi, are the trustees of the Nagpur times Trust. The fifth petitioner is the Chairman of the Board of Directors of the nava Samaj Ltd. The Company has an authorised capital of Rs. 10 lacs divided into (a) 38,000 ordinary shares of Rs. 25 each, and (b) 25,000 deferred shares of rs. 2 each. Out of the authorised capital, the total subscribed and paid-up capital of the Company is (a) 31,527 ordinary shares of Rs. 25 each of the total value of rs. 7,88,175, and (b) 25,000 deferred shares of Rs. 2 each of the total value of rs. 50,000. The deferred shares of Rs. 2 each and the ordinary shares carried equal voting rights. The deferred shares were held by five share-holders. On 22nd august 1947 the Company entered into an agreement of managing agency with "nava Samaj Pravartan", a partnership firm in which two of the five deferred share-holders were partners. This managing agency agreement was for a period of twenty years.

(3.) ON the coming into force of the Companies Act, 1956, (hereinafter referred to as the Act), the Company was required under Sections 87 and 89 of the Act to bring about equality of voting rights between ordinary shares and deferred shares within one year of the commencement of the Act. The Company, however, applied to the Central Government on 26th March 1956 under Section 89 (4) of the Act for being exempted from the requirements of Sub-sections (1), (2) and (3) of Section 89. According to the petitioners, the Central Government, after making necessary enquiries as to whether the grant of exemption would or would not be in the public interest or in the interest of the Company required the Company to assign the deferred voting rights as well as the managing agent rights to independent trustees of "high eminence and impartiality' Accordingly, the Nagpur Times Trust was brought into existence by a deed, dated the 9th May 1957, and the trustees thereunder were given the managing agency and deferred voting rights. A new managing agency agreement was thereafter executed in favour of the trustees on 30th June 1959. Under this agreement, the term of the managing agency was for a period not exceeding five years with effect from 15th August 1960.