1936 (2) TMI 17 - HC - Companies Law

Court enforces Companies Act, upholds jurisdiction over register of members request. Shareholders' rights protected.

British India Corporation Versus Robert Menzies

The Court held that the District Judge had jurisdiction to enforce compliance with the Indian Companies Act, including compelling a company to furnish a ... Place of keeping and inspection of, registers of returns Issues Involved:1. Jurisdiction of Company Judge to enforce compliance with the Indian Companies Act.2. Right of a shareholder to obtain a copy of the register of members.3. Penalty for non-compliance with Section 36 of the Indian Companies Act.4. Authority of the Court to compel a company to furnish a copy of the register.5. Legal remedies available to a shareholder for enforcement of statutory rights.Issue-wise Detailed Analysis:1. Jurisdiction of Company Judge to enforce compliance with the Indian Companies Act:The primary question was whether a Company Judge has jurisdiction to enforce compliance with the provisions of the Indian Companies Act, even if such power is not expressly conferred by the Act. The Court held that the Courts specified in Section 3 of the Act have inherent jurisdiction to compel due observance of the mandatory provisions of the Act. It is a fundamental principle of legal administration that where the law requires something to be done, there must be a Court that can directly order it to be done. The Court emphasized that it is well understood in all systems of civilized jurisprudence that where there is a right, there is a remedy.2. Right of a shareholder to obtain a copy of the register of members:The opposite party, a shareholder of the British India Corporation Ltd., requested a copy of the register of members, which the Corporation failed to provide within a reasonable time. The Court acknowledged that the shareholder had the statutory right to demand and be furnished with a copy of the register of the members. This right arose out of his proprietary right as a shareholder of the Corporation.3. Penalty for non-compliance with Section 36 of the Indian Companies Act:Section 36(3) of the Act provides a penalty for non-compliance, stating that if any inspection or copy required under this section is refused, the company shall be liable to a fine not exceeding Rs. 20 for each refusal and a further fine not exceeding Rs. 20 for every day during which the refusal continues. The Court noted that the penalties provided do not preclude the Court's jurisdiction to enforce compliance with the mandatory provisions of the Act.4. Authority of the Court to compel a company to furnish a copy of the register:The Court rejected the argument that the District Judge lacked jurisdiction to order the company to furnish a copy of the register. The Court held that the provision in Section 36(3) authorizing the Court to compel immediate inspection does not imply that the Court's jurisdiction to order a copy of the register is barred. The Court emphasized that the District Judge had inherent jurisdiction to direct the copy to be given to the shareholder and that his order was not open to any legal objection.5. Legal remedies available to a shareholder for enforcement of statutory rights:The Court referred to the decision in *Davits v. Gas Light and Coke Company*, which held that the proper remedy for a shareholder in the event of the company refusing to supply a copy of the register is either an injunction to restrain the company from continuing to refuse or an action of mandamus or for a mandatory injunction directing the company to supply the required copy. The Court concluded that the District Judge of Cawnpore had jurisdiction to issue a mandatory injunction to ensure compliance with the mandatory provisions of the Companies Act.Conclusion:The Court held that the District Judge had jurisdiction to pass the order directing the Corporation to supply the copy of the register to the shareholder. The application for revision was dismissed with costs, and the stay order was discharged. The Court emphasized that the only possible order under the circumstances was the one passed by the District Judge.