V N BHAJEKAR Vs. KMSHINKAR

JUDGEMENT

(1.) The suit is a sequel to a resolution passed by the board of directors of the 6th defendant company and an extraordinary resolution passed in a general meeting and confirmed as a special resolution in another extraordinary general meeting of the shareholders of the company. In pursuance of the last two resolutions an agreement was executed by the 6 defendant company, the effect of which is to appoint the 7 defendant company as managing agents of the 6 defendant company. The plaintiffs, who are some of the directors, have brought this suit for challenging the said resolutions and the respective meetings in which they were passed, and for a declaration that the said resolutions were invalid and of no effect, and for an injunction restraining the 7 defendant company from acting on the agreement executed in pursuance thereof.

(2.) After the institution of the suit the plaintiffs took out a notice of motion for an interim injunction restraining the 7 defendant company from acting upon the said agreement, and in my interlocutory judgment on the motion I have set out the facts and contentions of the parties. I then directed that a meeting of the shareholders of the 6 defendant company should be held in order to find out whether the company was willing to maintain the suit and to proceed with it. I gave full directions as to notices and advertisement and as to the execution of proxies and other incidental matters, and further directed that the meeting should be presided over by the Commissioner of this Court and the resolution passed should be communicated to this Court. This course was adopted by me on the authority of several English cases, to which it is not necessary to refer here. Accordingly, a meeting of the shareholders of the company was held on September 10, 1933. The Commissioner's report shows that the resolution which was put to the meeting was in these terms : Whether the 6 defendant company, the Indian Co-operative Navigation & Trading Co., Ltd., is willing to maintain the suit and to proceed with it. The report further shows that on a poll being demanded and taken the said resolution was lost. No exceptions to the report are filed by any of the parties.

(3.) The grounds on which the resolutions are attacked are set out in paragraph 15 of the plaint. As to the first resolution passed by the board of directors on February 18, 1933, the plaintiffs contend that two of the directors were interested parties, and there was no proper quorum, and that the meeting of the board of directors on the 18 was held in direct violation of a decision arrived at on a previous meeting of the board on February 17, 1933, to the effect that the next meeting of the board of directors should be held on February 20, 1933. In paragraph 8 of the plaint the plaintiffs state as follows : In spite of the aforesaid arrangement an urgent meeting of the Board of Directors was summoned at the instance of Ghellabhai Hansraj the 2nd defendant abovenamed for February 18, 1933, and held on that day at 4 p.m. The following Directors were present, viz., the 3 plaintiff abovenamed and defendants 1, 2 and 3, the 2nd defendant being in the chair. Notwithstanding the protest of the 3 plaintiff that the consideration of the said agency agreement was deferred to Monday the 20th, defendants 1 2 and 3 proceeded to consider and passed a resolution authorizing the said 6 defendant company to enter into the said agreement with the 7 defendant Agency Company. The service of the notice of the said meeting was so effected as to make it certain that the 2nd plaintiff would not be able to attend.