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        1932 (2) TMI 25 - HC - Indian Laws

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        Section 42 maintainability requires denial of title and claim for consequential relief in shareholder suits. A shareholder's challenge to a company resolution and resulting share allotment was held not maintainable under Section 42 of the Specific Relief Act ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Section 42 maintainability requires denial of title and claim for consequential relief in shareholder suits.

                              A shareholder's challenge to a company resolution and resulting share allotment was held not maintainable under Section 42 of the Specific Relief Act because the plaint did not show denial of the plaintiff's legal character or proprietary right. The complaint was directed at others asserting rights in additional company property, which was not enough to establish a denial of the plaintiff's own title. The suit also omitted further relief, such as rectification of the register or consequential injunction, and that omission attracted the statutory bar. The appeal therefore failed.




                              Issues: Whether a shareholder's suit for a declaration challenging the validity of a company resolution and consequential acts was maintainable under Section 42 of the Specific Relief Act.

                              Analysis: The suit sought only a declaration that the allotment of shares and acts done on the basis of the impugned resolution were illegal, ultra vires and void. The plaintiff did not show denial of his legal character or proprietary right in the sense required by Section 42 of the Specific Relief Act. The real complaint was that others were asserting rights in additional company property, which did not amount to a denial of the plaintiff's own title. The plaintiff also failed to claim further relief, such as rectification of the register or consequential injunction, and that omission attracted the bar in Section 42.

                              Conclusion: The suit was not maintainable under Section 42 of the Specific Relief Act and the appeal failed.


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                              ActsIncome Tax
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