1978 (1) TMI 137

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....also the keys of the almirahs lying in the office of the company and further to deliver the cash in hand held by him earlier to the present managing director of the company with the requisite details thereof. It does not seem to be in dispute that an annual general meeting of the company was called for the purposes of the election of the managing director/chairman on 30th November, 1977. In the proceedings held in the said meeting Sh. N.S. Kharbanda, who was the incumbent managing director of the company, lost to Sh. Ajaib Singh Bachhal, the present applicant, who was elected as the managing director thereafter. It has been averred in the application that in the minutes book relating to the annual general meeting Sh. N.S. Kharbanda wrote....

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....inability of the present application is sought to be challenged. The main stand on behalf of Sh. Kharbanda seems to be as averred in para. 5 of the return that he would have no objection to hand over the records, etc., after the decision of the Company Petition No. 239 of 1977 on merits regarding the validity of the proceedings of the annual general meeting. Mr. J.S. Narang, learned counsel for the applicant, has forcefully contended that having been duly elected as the managing director in the annual general meeting held on November 30, 1977, the applicant is necessarily entitled to the possession in custody of the records of the company and its other property. The minutes book pertaining to the annual general meeting held on Novembe....

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....he Civil Procedure Code read with rule 9 of the Companies (Court) Rules. It appears to be plain that the company in order to function effectively must have an access to and the custody of its records and property and the ends of justice, therefore, require that such a direction should issue where the former managing director is refusing to restore the property and records of the company to it. Merely because Sh. N.S. Kharbanda has filed a petition challenging the validity of the annual general meeting and the consequent election of the managing director, Sh. Ajaib Singh Bachhal, who has been duly recorded as having been elected in the minutes book would not entitle him to withhold the records and the assets of the company till the decision ....