Member voting rights in company meetings cannot be excluded by articles inconsistent with the Companies Act and Table C.

A regulation in the articles of association of a company not limited by shares was invalid because it excluded members from attending and voting at general meetings, contrary to the Companies Act, 1956 and Table C of Schedule I. The statutory scheme assumed that members have one vote each and may participate in general and extraordinary meetings, subject only to express statutory restrictions. A company's charitable or educational objects did not justify removing this inherent membership right, and practical difficulty in convening a large membership body could not override the Act. The impugned regulation was therefore void for inconsistency with the statutory framework.

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Issues: Whether a regulation in the articles of association of a company not limited by shares, which confined the general meeting to representatives and excluded all shareholders from attending and voting, was valid under the Companies Act, 1956 and Table C of Schedule I.

Analysis: The company, though formed for charitable and educational objects, was registered under the Companies Act, 1956 and was governed by the statutory scheme applicable to companies not limited by shares. Table C in Schedule I governed its articles, and Regulation 14 of Table C provided that every member shall have one vote. The impugned regulation was inconsistent with that scheme because it excluded members from the general meeting and denied them participation in the administration of the company. The statutory provisions relating to annual general meetings, extraordinary general meetings, notices to members, proxies, and restrictions on voting for defaulting shareholders all proceeded on the footing that members have the right to attend and vote, subject only to express statutory restriction. No provision of the Act supported a total exclusion of members from the general meeting. The difficulty of convening a large body of members did not justify taking away an inherent membership right.

Conclusion: The regulation was void as being inconsistent with the Companies Act, 1956 and Table C of Schedule I, and the appeal succeeded to that extent.

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