Court upholds removal of plaintiff as director, citing company's articles of association. Plaintiff's claim dismissed. Defendants not awarded costs.

The court held that the removal of the plaintiff from the directorship of defendant No. 1 company was not illegal as the co-promoters had the right to withdraw their nominee as a director per the company's articles of association. The plaintiff's claim for relief was dismissed, considering the time elapsed since the suit's institution and the plaintiff's upcoming retirement by rotation. The court did not award costs to the defendants due to their lack of assistance in the final adjudication.

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Issues Involved:
1. Whether the removal of the plaintiff from the directorship of defendant No. 1 company is illegal.
2. If issue No. 1 is proved in the affirmative, to what relief, if any, is the plaintiff entitledRs.

Issue-wise Detailed Analysis:

1. Whether the removal of the plaintiff from the directorship of defendant No. 1 company is illegal:

The plaintiff, an erstwhile director of defendant No. 1, sought a declaration and permanent injunction against his removal as a director. He claimed that his removal by the co-promoters was ultra vires and contrary to the provisions of section 284 of the Companies Act, 1956, which mandates that a director can only be removed by an ordinary resolution passed in a shareholders' meeting following a special notice given fourteen days in advance.

The defendants argued that the plaintiff was merely a nominee of the co-promoters and could be removed without adhering to section 284, as per the agreements with UPSIDC and the company's articles of association. They contended that the articles allowed the co-promoters to withdraw their nominees from the board of directors.

The court examined the articles of association, specifically article 112, which allowed the co-promoters to remove their nominees from the board. It was determined that the plaintiff, as a rotational director nominated by the co-promoters, could be removed by them without the need for a shareholders' meeting. The court referenced a Division Bench judgment of the Allahabad High Court in A.K. Home Chaudhary v. National Textile Corporation (U.P.) Ltd., which stated that section 284 does not prohibit the removal of a director in accordance with the articles of association.

The court concluded that the co-promoters were within their rights to withdraw the plaintiff's nomination as a director, and the removal was valid as per the articles of association. Therefore, the plaintiff's removal was not illegal.

2. If issue No. 1 is proved in the affirmative, to what relief, if any, is the plaintiff entitled:

Since issue No. 1 was decided against the plaintiff, there was no question of any relief or consequential benefit. The court noted that almost fourteen years had passed since the institution of the suit, and in any case, the plaintiff would have retired by rotation in August 1994. Consequently, the issue was answered accordingly.

Relief:

The suit of the plaintiff was dismissed. The court did not grant costs to the defendants as they provided no assistance for the final adjudication of the matter.

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