Managing agent remuneration may be fixed by resolution where company law permits regulation of management details.

A company's power to regulate the remuneration of its managing agent was treated as a matter of management detail, not an immutable condition of the memorandum. The Bombay HC held that section 10 of the Indian Companies Act did not prevent the company from approving extra remuneration by resolution. It further held that section 87C did not require a special resolution because the managing agent had continued under the earlier arrangement and was not freshly appointed after the Amendment Act commenced. The notice convening the meeting was also upheld, as the agenda item was not vague or legally defective, and the challenge to the resolution failed.

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Issues: (i) Whether the company was authorised to grant extra remuneration to its managing agent beyond the remuneration fixed by the memorandum and agreement, and whether the resolution sanctioning such payment was ultra vires or invalid.

Analysis: The provisions relating to appointment of a managing agent and the remuneration payable to him were treated as matters of management detail, not as immutable conditions of the memorandum. Section 10 of the Indian Companies Act did not prohibit the company from regulating such matters by resolution. The Court further held that section 87C did not apply so as to require a special resolution, because the managing agent in question had not been appointed afresh after the commencement of the Amendment Act, but had continued by virtue of the earlier arrangement and nomination. The challenge to the notice convening the meeting also failed, as the agenda item was not found to be vague or legally defective.

Conclusion: The resolution granting extra remuneration was valid and the notice was not illegal; the plaintiffs were not entitled to the declaration or injunction sought.

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