Individual right of a managing director can be sued on; meeting irregularity did not invalidate the removal resolution.

A shareholder or director excluded from office may sue to enforce an individual right to continue as managing director, and such a claim is not barred by the rule in Foss v. Harbottle. The challenge to the meeting and removal resolution also failed: where the plaintiff's own conduct made the registered office unavailable, the shareholders could validly proceed at an alternative venue, and any departure from the usual place of meeting was treated as, at most, an irregularity. The meeting and resolution were therefore upheld, while the suit itself remained maintainable.

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Issues: (i) Whether the suit challenging the removal of the plaintiff from the managing directorship was maintainable as one enforcing an individual right, and not barred by the rule in Foss v. Harbottle. (ii) Whether the meeting held at the alternative venue and the resolution removing the plaintiff were invalid for want of proper adjournment, notice, or compliance with the company law provisions governing meetings.

Issue (i): Whether the suit challenging the removal of the plaintiff from the managing directorship was maintainable as one enforcing an individual right, and not barred by the rule in Foss v. Harbottle.

Analysis: The dispute was not one of ordinary internal management affecting the shareholders as a body, but concerned the plaintiff's asserted personal right to continue as managing director. A director or managing director excluded from office suffers an individual injury and may sue in his own name to vindicate that right. The rule in Foss v. Harbottle did not apply to such a claim.

Conclusion: The suit was maintainable and the objection based on internal management failed, in favour of the appellant on this issue.

Issue (ii): Whether the meeting held at the alternative venue and the resolution removing the plaintiff were invalid for want of proper adjournment, notice, or compliance with the company law provisions governing meetings.

Analysis: The plaintiff's conduct made the registered office unavailable for the meeting, and the shareholders assembled nearby proceeded to hold the meeting at the alternative venue. The Court treated the change of venue and the manner of holding the meeting as, at most, an irregularity. Section 79(3) of the Indian Companies Act was read broadly enough to cover impracticability in conducting the meeting, and the plaintiff could not rely on a state of affairs brought about by his own act to defeat the resolution. Section 114 of the Indian Evidence Act supported the factual inference from the admitted circumstances.

Conclusion: The meeting and the resolution were not invalid on the grounds urged, and this issue was decided against the appellant.

Final Conclusion: The second appeal failed because, although the suit was maintainable, the resolution removing the plaintiff from the managing directorship was upheld.

Ratio Decidendi: A shareholder or director may sue to enforce an individual right affected by exclusion from office, and a party who prevents a meeting from being held at the appointed venue cannot later impeach the resulting meeting and resolution on the basis of the change of venue or the irregularity thereby caused.

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