Voting by power of attorney proxies upheld where prior decree existed and no timely objection was raised.

The Company Law Board's recognition of voting by proxies of power of attorney holders at the annual general meeting was upheld because it accorded with an existing decree recognising that voting right, and no objection had been raised before the election. The later Reserve Bank of India communication refusing recognition of a further share transfer could not affect the legality of the order because it had not been served on the parties. In proceedings under the Companies Act, 1956, concerning oppression and mismanagement, the Board's directions to secure proper management were therefore sustained, and the closure of the company petition after the election of directors was upheld.

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Issues: Whether the Company Law Board was in upholding the voting by proxies of power of attorney holders at the annual general meeting and in closing the company petition after the election of directors.

Analysis: The Board's directions were issued in the context of proceedings under sections 408, 397 and 398 of the Companies Act, 1956, to secure proper management and prevent oppression and mismanagement. The voting arrangement was supported by an earlier subsisting decree recognising the right of power of attorney holders to vote, and no objection had been raised before the election. The later Reserve Bank of India communication refusing recognition of a further transfer of shares was not served on the parties and could not be used to test the legality of the Board's order. The statutory powers of the Reserve Bank under section 35A of the Banking Regulation Act, 1949, and the banking guidelines issued thereunder also remained relevant to the share-transfer controversy.

Conclusion: The finding that the Chairman was right in allowing the proxies of the power of attorney holders to exercise votes was upheld, and the closure of the company petition was sustained.

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