TaxTMI 
TaxTMI 
2000 (1) TMI 865
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....f India of plaintiff No. 1 against other two defendants, viz., R.S. Chowdhury and K.L. Roy who are other directors challenging the legality and validity of the resolutions said to have been passed at the annual general meeting by the respondents on 22-3-1999, and other resolutions adopted at the meeting of the board of directors dated 16-7-1999. In connection with the aforesaid suit the plaintiffs have asked for interlocutory relief of injunction from giving any effect and further effect to the aforesaid resolution and for order of injunction restraining the respondents, their servants, agents or assigns from interfering in any manner with the management and administration of petitioner No. 1 and further an appropriate order of injunction restraining the respondents from instituting and/or defending any suit or proceeding in the name and/or on behalf of petitioner No. 1 and further order of injunction restraining the respondents from electing or co-opting or in any manner inducting any director in the board of petitioner No. 1. In connection with the aforesaid interlocutory application an order of status quo was passed by me amongst others from giving any effect or further effec....
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....laintiff Nos. 4 and 5 are not executive directors and as such they do not attend corporate office. Mr. Kundu, plaintiff No. 2, received notice by fax on 28-6-1999, in the morning. Unreasonably short notice, however, reached at 5.45 p.m. on 26-6-1999, viz., on Saturday after office hours. Even had it been noticed on Saturday itself by plaintiff No. 2 it was impossible for him to attend the aforesaid meeting from Calcutta to Gangtok on 27-6-1999. For this point reliance has been placed by Mr. Mitra on a decision of the Supreme Court in Parameshwari Prasad Gupta v. Union of India AIR 1973 SC 2389. 6. It is very unusual that such board meeting could be convened and held at a different place from the corporate office of plaintiff No. 1 at Calcutta. Records and resolution books were lying at Calcutta. Even no copy of the board meeting dated 27-6-1999, has been circulated nor produced. The alleged board meeting dated 16-7-1999, is vitiated because of unlawful prevention and obstruction of the defendants group of directors from participating and/or discussing and from transacting the business sched-uled for discussion on the aforesaid date. There was criminal intimidation and total chao....
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....e no authority and/or locus standi to file the suit on behalf of plaintiff No. 1. Firstly, the nominee managing directors cannot question the legality and validity of the annual general meeting which was validly held on 22-3-1999. He argues members having 80 per cent of the shareholding of the company duly attended the meeting. If there was any objection only a member could bring an action in the name of the company to seek redressal of any wrong done to it. In support of his submission reliance had been placed on the decision in Foss v. Harbottle [1843] 2 Hare 461. 9. The notice of postponement of the annual general meeting issued by plaintiff No. 2 is unauthorized and illegal as he had no authority to postpone it and only the board of directors under the articles of associa-tion of the bank concerned, is competent to take a decision for postpone- ment of the annual general meeting. Subsequent post facto decision of postponement of the annual general meeting on 8-6-1999, is invalid since the annual general meeting had already taken place on 22-3-1999. In the said meeting four additional directors have been appointed by 80 per cent of the shareholders. Plaintiff No. 1-bank is....
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....e them parties. Therefore, the suit is bad for non-joinder of necessary parties unless his clients are brought in the suit no order can be passed nor the suit can be proceeded with. He draws my attention to the provisions of Order 1, rule 9 of the Code of Civil Procedure, 1908 and has placed reliance on a Supreme Court decision in Prabodh Verma v. State of Uttar Pradesh AIR 1985 SC 167. In spite of the aforesaid facts being brought to the notice of the plaintiff no step has been taken to add his clients as a party herein. As such the suit should be dismissed and the interim order already passed should be vacated. 13. Having heard the respective submissions of the learned counsel and considered the materials placed before me I feel it necessary to decide the question of locus standi of the plaintiffs to file the suit and to maintain this present action as has been raised by Mr. Pratap Chatterjee for challenge of the annual general meeting allegedly held on 22-3-1999. 14. It is an admitted position that plaintiff Nos. 2 to 5 have been appointed managing director and the additional directors respectively on the strength of the power exercised by the Reserve Bank of India unde....
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....and authority until defendant Nos. 1 and 2 took this objection. In the premises I am unable to accept the argument of Mr. Chatterjee. So, I hold that plaintiff Nos. 2 to 5 have locus standi to bring the action not only on behalf of plaintiff No. 1-bank but also in their own individual right as they are holding office under law and this is nothing short of a civil right to maintain a civil action. Now coming to the question of holding the annual general meeting allegedly held on 22-3-1999. There are two aspects on this issue. One is whether the annual general meeting was factually held on 22-3-1999, or not, and further if it is held whether such meeting was valid under the law or not, or any decision taken therein is lawful and valid. Thus, necessarily the appointment of four additional directors, viz., the clients of Mr. Mallick need scrutiny under the law. 15. On the question of factual aspect of holding meeting admittedly initially notice was issued by plaintiff No. 2 for holding meeting in the newspaper. It is submitted by Mr. Chatterjee that the said notice was inserted pursuant to the decision of the board of directors. Factually notice of postponement was also issued by....
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....son will not attend such meeting. 16. There was no notice for change of venue of holding meeting though it is sought to be explained that all the shareholders at first assembled at the notified venue but in view of cancellation of booking of the hotel the shareholders assembled at the adjoining premises. Such an explanation is not acceptable to me and it is very unusual that an annual general meeting of a bank could be held in an irregular and hasty manner. It is surprising in spite of issuance of notice for postponement of the annual general meeting no protest was lodged nor any counter notice was given that cancellation is unauthorized. It is an admitted position that 100 per cent shareholders did not attend at least 20 per cent minority failed to attend. I am of the view at least 20 per cent shareholders did not have any notice of holding such annual general meeting on 22-3-1999, and the absence of notice is easily presumed from the fact of postponement of such meeting whether it is issued lawfully or unlawfully. In all fairness defendant Nos. 1 and 2 ought not to have held the meeting on that date at least should have issued a further notice if plaintiff No. 2 was not compet....
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.... facie that Mr. Mallick's clients' appointment has been validly made. Mr. Mallick's clients have also chosen not to make any application but have simply tried to intervene in this matter. I have heard Mr. Mallick's clients' point of view and I am of the prima facie view his clients' appointment is wholly illegal and irregular. Owing to lack of joinder of necessary party the suit cannot fail if they are joined subsequently. Since the right of Mr. Mallick's clients is in controversy so I add his clients as a party defendant in the suit. So necessary amendment should be carried out by the department within four weeks from the date of service of signed copy of this order. For the aforesaid reasons I confirm the interim order passed by me on 20-7-1999. I vacate the interim order affecting the right of the Union of India since the Union of India is not a party. Moreover, action has been taken under the provision of the law or for that matter I do not find any mala fides in exercise of the Reserve Bank of India's action. Therefore, there shall not be any embargo to be put by this Court, at least, to take action in accordance with law in the matter of amalgamation. In view of the above ....