TaxTMI 
TaxTMI 
1989 (1) TMI 295
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....e plaintiff. Along with the suit, the plaintiff had moved an application under order XXXIX rules 1 and 2 read with section 151 of the Code of Civil Procedure seeking an interim injunction restraining the respondent from implementing the decision taken in any resolution passed in the meeting dated October 24, 1988, and requiring the respondent-company to ensure that the plaintiff is duly represented on the board's meetings through Mr. Brij Anand. Facts leading to the filing of the present suit and the application, in brief, are that M/s. Pioneer Hi-bred International Inc. USA (hereinafter referred to as the "PHI") is stated to be engaged worldwide in the business of research and development, production and sale of hi-bred seeds of various agricultural crops produced by the crossing of proprietary inbred lines developed through its research and development efforts. This business is stated to be in existence for the last 62 years and M/s. Pioneer Overseas Corporation (hereinafter referred to as "POC") is said to be a subsidiary company of PHI. Plaintiff is the attorney and is also Assistant General Counsel to PHI and is a director of the respondent. The respondent-company was incorpo....
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....of Rs. 2,09,34,682 and by virtue of the agreement dated July 21, 1986, PHI had advanced one million US dollars to the respondent to set up, upgrade and modernise its research and other facilities. The said amount is stated to have been advanced without any security and on a non-repatriable basis which was to be adjusted against the future cost of research incurred on behalf of PHI. PHI is also stated to have given critical plant and machinery of the value of Rs. 10,55,568 free of cost. The respondent is stated to be owing Rs. 44,40,150 as on June 30, 1987, on export advance against future exports to be made by the respondent. So, it is averred that PHI has invested crores of rupees in the respondent and has vital stakes in the conduct of the business of respondent in India. It is alleged that prior to the disputes and differences, the business of the respondent was being professionally run, managed and controlled by PHI and as Dr. Surinder was Vice President of the PHI and President of POC, he was also looking after the interest of PHI in the respondent till March 1988, when he ceased to be connected with PHI and POC as there arose some disputes between him and PHI. Then, reference....
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....the meetings of the board of the respendent, there could be no justifiable reason for not allowing Mr. Brij Anand to attend the meetings as alternate director of the plaintiff. The suit as well as the application are hotly contested by the defendant-respondent. It has been pleaded that there is no mandatory requirement of law that the respondent is bound to accept the nomination of alternate director by one of its directors. It is pleaded that in fact, the respondent had the complete power to reject the appointment of alternate director. In the alternative, it is pleaded that the conduct of the plaintiff qua the defendant-company since March 17, 1978, disentitles the plaintiff to appoint any alternate director as he has been responsible for removing the genetic material and research data unauthorisedly belonging to the defendant; and plaintiff and his constituted attorney procuring breaches of contract and lured the employees of the defendant-company and made them join their own company, Regency Magnetics Private Limited and Mr. Brij Anand had signed letters of appointment of such employees and there is a complete conflict of interests between the plaintiff and Mr. Brij Anand on t....
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....e of such discretion. He has also made reference to Alak Prokash Jain v. Union of India [1973] 43 Comp Cas 68 (Cal.), where under section 388B of the Companies Act, the Central Government is empowered to make a reference. It was held that ordinarily the word "may" implies a discretion and it confers a power to do something which would otherwise be illegal but there are other matters which are to be considered in construing the meaning of the word "may" such as the conditions under which the power is to be exercised, the claim or the right of the persons for whose benefit the power is to be exercised and the purpose of the statute for which the power is to be exercised. It was held that these are the conditions which couple power with duty and make it obligatory on the person in whom power is vested to exercise that power when called upon to do so. Counsel for the respondent, on the other hand, has made a reference to Life Insurance Corporation of India v. Escorts Ltd. [1986] 59 Comp Cas 548 (SC), in support of his contention that the board of directors has absolute power to appoint the directors and is not bound to give any reasons. I think, in the present case, for deciding the ap....