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The Tanjore Permanent Fund Ltd. Represented by Its Secretary Vs. T. Sadasiva Rao - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai
Decided On
Reported inAIR1926Mad705; 95Ind.Cas.339; (1926)50MLJ479
AppellantThe Tanjore Permanent Fund Ltd. Represented by Its Secretary
RespondentT. Sadasiva Rao
Excerpt:
- - c which was a notice issued on the 27th of june and makes no reference to any special committee but informs the share-holders that the resolution of the 24th june would be recommended for cancellation at the adjourned meeting of the 30th......notice issued on the 27th of june and makes no reference to any special committee but informs the share-holders that the resolution of the 24th june would be recommended for cancellation at the adjourned meeting of the 30th. the judge does not find definitely that this notice was not circulated to the share-holders but merely states that certificates of posting are forthcoming for only 27. the company is situated in tanjore and therefore it is quite possible many notices were served without the intervention of the post office, but on this point there is no finding. if that notice was issued to the share-holders, there can be no doubt that the share-holders had notice of this proposal to cancel the resolution of the 24th, and the subsequent resolution of the 30th would be entirely in.....
Judgment:
ORDER

Phillips, J.

1. The facts of the case are as follows: The plaintiff was the Secretary of the 1st defendant Company and was validly dismissed from office by the Directors of the Company with effect from the 16th May, 1918. A meeting of the Company was subsequently held on 24th June, 1918, at which this dismissal order was cancelled. That meeting was adjourned to the 30th of June and on the 30th the question was again considered and the resolution of the 24th June was cancelled. The. subsequent proceedings of the Company show that the resolution of the 30th June was considered valid and was acted upon thereafter. The plaintiff has obtained a decree on the ground that the resolution of the 30th June was irregular and illegal since it was re-opening at an adjourned meeting a question already decided at a previous stage of the meeting and was a matter brought forward without proper notice. The law generally is that at an adjourned meeting a resolution which has already been determined at the original meeting shall not again come up for discussion without notice, and that is provided in the Draft Articles of Association, No. 16, Form B of Schedule III to the Indian Companies Act. This particular Article has been omitted in the Articles of the Association framed by the 1st defendant Company, and the question is whether that rule should be applied as it has been deliberately left out of the Articles. On the second point, as to whether matter was brought forward without proper notice, it is not quite clear what the learned District Judge intends to find. He has stated that on the 25th June the Directors referred the matter to a special Committee who reported on the 28th of June and that then a meeting was summoned for the 30th. The learned Judge appears to have omitted all consideration of Ex. C which was a notice issued on the 27th of June and makes no reference to any special Committee but informs the share-holders that the resolution of the 24th June would be recommended for cancellation at the adjourned meeting of the 30th. The Judge does not find definitely that this notice was not circulated to the share-holders but merely states that certificates of posting are forthcoming for only 27. The Company is situated in Tanjore and therefore it is quite possible many notices were served without the intervention of the Post Office, but on this point there is no finding. If that notice was issued to the share-holders, there can be no doubt that the share-holders had notice of this proposal to cancel the resolution of the 24th, and the subsequent resolution of the 30th would be entirely in order and binding not only on the plaintiff but also on the share-holders of the Company. As there seems to have been some mistake in considering this part of the case, I think that, before considering the other question of law involved in the suit, it would re advisable to have a fresh finding as to whether notice of the proposed resolution of the 30th was issued to the share holders. At the same time the learned District Judge will be requested to say definitely what he means by his final conclusion in paragraph 17:

These resolutions were merely quoted to show that the company maintained the general position taken up by them on 30th June, 1918.

2. It is argued here that these subsequent resolutions had the effect of confirming the resolution of the 30th June. This question has not been considered by the District Judge although the resolutions were put forward to show that the Company maintained the general position taken up on 30th June, 1918.

3. The finding will be submitted within six weeks of the re-opening of the Lower Appellate Court after the vacation. Ten days will be allowed for objections.

4. In compliance with the above order the District Judge of West Tanjore at Tanjore submitted the following finding:

5. The High Court has called for a finding on the question whether notice of the proposed resolution of the 30th was issued to the share-holders. It is admitted that there were 3,000 or 4,000 subscribers. Ex. C. dated 27th June, 1918, was the notice. There is no evidence as to how many notices were printed. Ex. J (1) evidences that 27 notices were posted on the 28th and 30, on the 29th. Of the former, 23 were addressed to subscribers resident in Tanjore and 4 to those living at Mayavaram and Pattukotta. Ex. H is the certificate of posting for the 27 notices. These 27 notices must be deemed to have been given in sufficient time. Though there is no certificate of posting for the 50 notices, I do not doubt that they were posted. But only one of the 30 was addressed to a resident of Tanjore. I hold that the notices to 29 out of 30 was not reasonable. It is not unlikely that many notices were distributed in Tanjore but there is no evidence of the same. Ex. 1-d states that 61 attended on the 30th against 68 on the 24th; but no inference can be drawn either way therefrom. The larger number of votes on the 30th is due to the fact that some individuals had plural votes. I find that it has not been proved that notice of the proposed cancellation on the 30th of the resolution of the 24th was given.

6. I have been directed to say definitely what was meant by the sentence 'These resolutions were merely quoted to show that the Company maintained the general position taken up by them on 30th June, 1918.' As my predecessor wrote the judgment and as he has used the word 'quoted,' I can only state what the learned Vakil for defendants says was his reason for so quoting. He says he quoted the subsequent resolutions for inferring therefrom that the corporate body accepted and ratified the cancellation made on 30th June, 1918, that in any event the corporate body never wanted to go back on what was done at the meeting of 30th June 1918, and that in either view he did not want to rely on the subsequent conduct as an answer to plaintiff's case.

7. After the return of this finding the Court delivered the following.


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