1932 (2) TMI 25 - HC - Indian Laws

Court leaves resolution on share capital validity open for future determination

Jogesh Chandra Majumdar Versus Durga Mohan Chakrabarty And Ors.

The High Court did not definitively rule on the validity of a resolution increasing share capital, leaving it open for future determination. The court ... - Issues:1. Validity of resolution increasing share capital2. Maintainability of declaratory suit under Section 42, Specific Relief ActAnalysis:Issue 1: Validity of resolution increasing share capitalThe appeal arose from a suit seeking a declaration that the issue of shares and acts based on a resolution increasing share capital were illegal. The main contention was whether the resolution increasing capital was void as it required confirmation at a subsequent meeting, which did not happen. The lower appellate court found the resolution valid, but the High Court did not express a definitive opinion on this issue, leaving it open for future determination.Issue 2: Maintainability of declaratory suit under Section 42, Specific Relief ActThe lower appellate court held that a declaratory suit challenging the share issue was not maintainable under Section 42 of the Specific Relief Act. The plaintiff, a shareholder, failed to establish that his legal character or property rights were being denied by the defendants. The court noted that the plaintiff's proper remedy would have been to seek rectification of the register under Section 36 of the Companies Act. Moreover, the plaintiff did not claim any further relief, such as an injunction or rectification of the register, which could have been ancillary to the declaratory relief sought. Consequently, the court dismissed the appeal, agreeing with the lower court's decision that the suit was not maintainable under Section 42 of the Specific Relief Act.In a concurring opinion, Mallik, J., agreed with the decision to dismiss the appeal.