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        Companies Law

        1975 (3) TMI 80 - HC - Companies Law

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        Company meeting relief under Section 186 cannot bypass a subsisting injunction or be granted without first ordering the meeting to be called. Section 186 of the Companies Act permits the court to order a company meeting to be called, held and conducted where it is impracticable to do so in the ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                            Company meeting relief under Section 186 cannot bypass a subsisting injunction or be granted without first ordering the meeting to be called.

                            Section 186 of the Companies Act permits the court to order a company meeting to be called, held and conducted where it is impracticable to do so in the prescribed manner, and to give ancillary directions only as part of that statutory exercise. Where requisitionists sought only appointment of a chairman and production of records, but did not ask for an order convening the meeting, the court could not grant those ancillary directions independently. A subsisting injunction restraining the company from holding a general meeting also meant the requested relief would have operated in breach of an existing court order. The petition was therefore not maintainable as framed and the relief was refused.




                            Issues: Whether relief under section 186 of the Companies Act could be granted by appointing a chairman and directing production of company records when the requisitionists had not sought an order calling the meeting and a subsisting injunction restrained the company from convening any general meeting.

                            Analysis: Section 186 empowers the court, where it is impracticable to call or conduct a company meeting in the prescribed manner, to order the meeting to be called, held and conducted and to issue ancillary directions. The requisitionists in this case sought only appointment of an advocate-chairman and access to records for a meeting they proposed to hold, but did not ask for an order calling the meeting. Since a temporary injunction was already operating against the company and its officers, the proposed course would have involved acting in breach of that injunction. Relief under section 186 could not be moulded so as to validate a meeting called contrary to an existing court order, and the ancillary prayers could not be entertained independently of a proper request to call the meeting under the statute.

                            Conclusion: The relief sought was not maintainable on the petition as framed and was rightly refused.

                            Final Conclusion: The appeal failed because the statutory power invoked could not be used to bypass an operative injunction, and the court was not called upon to order the meeting to be convened in the manner contemplated by section 186.

                            Ratio Decidendi: Where a subsisting injunction prevents the calling of a general meeting, a court cannot grant ancillary directions under section 186 of the Companies Act unless the prayer includes, and the court first orders, the meeting to be called under that provision.


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                            ActsIncome Tax
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