HARI KRISHNA LOHIA Vs. HOOLUNGOOREE TEA CO LTD

JUDGEMENT

(1.) This appeal is against the judgment and order of Sen, J., dated 10th June, 1968. The order was made on the notice of motion dated 25th April, 1968, taken out by the plaintiff inter alia for an order of injunction restraining the defendants and each one of them, their servants, agents and assigns from holding the proposed Extraordinary General Meeting of the Company on April 29, 1968, and passing any resolution thereat pursuant to the purported notice dated March 30, 1968 and the Explanatory statement annexed thereto and also injunction restraining the defendants and each one of them, their servants, agents and assigns from holding any share-holders meeting of the company pursuant to any purported notice such as or similar to the said notice dated March 30, 1968 and the purported explanatory statement annexed thereto and further injunction restraining the defendants from giving effect to or acting upon any resolutions which may be passed in any such meeting, and injunction restraining the defendants, their servants and agents from committing any further violation of the provisions of Section 342 of the Companies Act 1956 and from having the affairs of the defendant No.1 managed by any person or persons other than defendant No.2.

(2.) The defendant No.1 is Hoolungooree Tea Co. Ltd. and the defendant No.2 is Andrew Yule Co. Ltd. and the plaintiff appellant is a shareholder in the defendant Hoolungooree Tea Company. The defendant No.2 Andrew Yule Co. Ltd. is the Managing Agent of the said Tea Company. The appellant is a registered shareholder of 300 ordinary shares of the defendant tea company. The appellant alleges that through his friends and relatives he holds more than 10 per cent shares of the Tea Company.

(3.) The plaintiff instituted suit No. 1009 of 1968 on 25 April 1968 inter alia for a declaration that the notice dated 30 March 1968 and the explanatory statement annexed thereto are illegal, void and not binding against the plaintiff and for an injunction restraining the defendant from holding any Extraordinary General Meeting of the company on April 29, 1968 and passing any resolution thereat pursuant to the purported notice dated 30 March 1968 and for other injunctions. The appellant's case in short is that the defendant Andrew Yule Co. Ltd. Managing Agents are alone entitled to manage the affairs of the company. The plaintiff alleged that the defendant company mismanaged the sum of Rs.23,10,000/-. The plaintiff challenged the notice dated 30 March 1968 whereby the Extraordinary General Meeting of the company was called to be held on 29 April 1968. The plaintiff also alleges that on a perusal of the notice and the explanatory statement it appears that the defendant No.1 proposes to alter the Memorandum of Articles of Association and the same AIR sought to be altered in order to amalgamate the defendant No.1 with three other companies viz. Basmatia Tea Co. Ltd., Murphulani Tea Co. Ltd. (Assam) and Rajgarh Tea Co. Ltd. The plaintiff alleges that the said purported notice dated March 30, 1968 and the explanatory statement annexed thereto are misleading, tricky and do not furnish the requisite or necessary information for consideration of the resolution. The notice is also impeached to be ultra vires the Companies Act and Articles of the Company. The plaintiff also alleges that the Managing Agents were to retire with effect from 1st April, 1968, but the notice dated 30th March, 1968, is not signed by the Managing Agents and therefore the notice is illegal. It was contended before the learned Judge first that the notice of the meeting was not valid as it was signed by the Director, secondly, the explanatory statement was said to be tricky and thirdly, the notice was said to be mala fide. The learned Judge repelled all the contentions advanced.