Court power to order company meetings where Articles make valid meetings impracticable, enabling court-directed meeting to resolve director deadlock.

The primary issue is whether the court may order a company meeting under statutory power when calling or conducting a meeting according to the Articles is impracticable; the court applied the Companies Act provision permitting court-directed meetings where Articles/Act procedures cannot be followed. On the facts - disputed claims to directorship, rival groups convening competing meetings, and real risk of prolonged litigation prejudicial to the company - the court concluded the situation rendered meetings under the Articles impracticable and that a court-directed meeting should be ordered to resolve the deadlock.

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Issues: Whether the Court has the power under Section 79(3) of the Indian Companies Act to order that a meeting of the company be called, held and conducted by court direction and whether, in the facts of this case where there is serious doubt as to who are the present directors, it is practicable to call a valid meeting in accordance with the Articles of Association.

Analysis: Section 79(3) permits the Court to order a meeting to be called, held and conducted in such manner as the Court thinks fit where it is impracticable to call or conduct a meeting in the manner prescribed by the Articles or the Act. The Court examined the company articles (including provisions for rotation and re-election of directors and validation of acts of meetings) and the factual situation of rival groups claiming to be the board, pending litigation, and competing meetings called by different groups. The uncertainty as to who are the present directors, the realistic prospect of conflicting meetings and resolutions, and the resulting risk of prolonged litigation and prejudice to the company's business demonstrate that it cannot be said with reasonable certainty that a meeting called under the Articles would be valid. The Court therefore treated the position as one where calling a meeting in accordance with the Articles has become impracticable and the statutory power to call a meeting should be exercised to resolve the deadlock.

Conclusion: The Court has the power under Section 79(3) of the Indian Companies Act to order that a meeting be called and, on the facts of this case, such power should be exercised to call, hold and conduct a meeting in such manner as the Court thinks fit in order to resolve the conflict and uncertainty as to the present directors.

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