BANWARILAL JAIPURIA Vs. SITARAM JAIPURIA

JUDGEMENT

(1.) This is an application in a representative action by a shareholder for an injunction restraining the respondent company, Swadeshi Cotton Mills Co. Ltd., and its directors from holding any meeting pursuant to a notice dated September 14, 1970, or from passing any of the resolutions set out in the said notice or from giving effect to the resolutions, if passed.

(2.) The history of the litigation may be briefly indicated. On January 29, 1970, a notice was given by the secretary of the respondent-company intimating that a general meeting of the company would be held on February 27, 1970, to consider and if thought fit to pass the following resolution among others.

(3.) The petitioner instituted a suit against the respondent-company and its directors for a permanent injunction restraining the respondents from holding any meeting pursuant to the said notice and from passing the resolutions mentioned in the said notice on the ground that the notice did not disclose material facts. On February 26, 1970, on an application moved ex parte, Mr. Justice, S.C. Ghose, passed an order of injunction restraining the respondents from giving effect to any resolution that might be passed pursuant to the said notice. The resolutions in question were passed at a meeting held on February 27, 1970. The application was finally disposed of by Ghose J. by an order dated September 7, 1970, By the said order, the directors of the respondent-company were restrained from acting on the resolution No. 1 until the same was confirmed or approved at a meeting properly notified. The said order of injunction was issued by the learned judge on the ground that the explanatory statement did not disclose a material fact, viz., that the offer contained in the letter of intent had lapsed on January 24, 1970, and was no longer in force when the notice was issued.