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Firm Al. Ar. Arunachalam Chettiar and ors. Vs. Kaleeswarar Mills Ltd., Coimbatore and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany;Constitution
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 712 of 1956
Judge
Reported inAIR1957Mad309
ActsConstitution of India - Articles 19(1), 31(1), 226 and 226(1); Specific Relief Act, 1877 - Sections 8, 45 and 50; Companies Act, 1956 - Sections 36, 286 and 291; Code of Civil Procedure (CPC) , 1908
AppellantFirm Al. Ar. Arunachalam Chettiar and ors.
RespondentKaleeswarar Mills Ltd., Coimbatore and ors.
Appellant AdvocateM.K. Nambiar, ;K.K. Venugopal and ;K. Parasurama Aiyar, Advs.
Respondent AdvocateK. Rajah Aiyar, ;K.S. Ramamurthi, ;K.V. Narayanaswami, ;V. Thyagarajan, ;M.A. Rajagopalan and ;T.R. Ramachandran, Advs.
DispositionPetition dismissed
Cases ReferredP. D. Shamdasani v. Central Bank of India Ltd.
Excerpt:
constitution--article, 226--power to issue high prerogative write principles--specific relief act (1 of 1877)--s. 45--provisos (b) and (d)--nature and scope--writ of mandamus--whether can issue to enforce private contracted arrangements--managing agency rights--alternate remedy--need not be identical--impossibility of getting same relief by suit.--no reason for issue of writ--hereditary managing agency rights, nto property under article 19 (1) (f) of constitution ; the petitioners are a firm represented by four partners. the first respondent is a limited liability company incorporated in the year 1906, when, in consideration of the services rendered by the petitioner-firm and that of one somasundaram, it was agreed and was also put into the memorandum and the articles of association of.....1. this is a petition filed under article 228 of the constitution for a writ of mandamus or any other appropriate writ or order, directing the respondents to forbear from enforcing in any manner the resolution passed by respondents 2 to 9 on 7th april 1956. there was a prayer for a similar writ in regard to the convening of the annual general body meeting of 29th june 1956; but we are leaving that out of consideration, because that date is now long past, and no meeting took place on that date. the petitioners are a firm of al ar. arunachalam chettiar represented by four partners whose names are set out in the petition. the first respondent is the kaleeswarar mills ltd., colmbatore, and respondents 2 to 9 are its present directors.the first respondent-mills was incorporated as a limited.....
Judgment:
1. This is a petition filed under Article 228 of the Constitution for a writ of mandamus or any other appropriate writ or order, directing the respondents to forbear from enforcing in any manner the resolution passed by respondents 2 to 9 on 7th April 1956. There was a prayer for a similar writ in regard to the convening of the annual general body meeting of 29th June 1956; but we are leaving that out of consideration, because that date is now long past, and no meeting took place on that date. The petitioners are a firm of Al AR. Arunachalam Chettiar represented by four partners whose names are set out in the petition. The first respondent is the Kaleeswarar Mills Ltd., Colmbatore, and respondents 2 to 9 are its present directors.

The first respondent-Mills was incorporated as a limited liability company in 1903 with the object of carrying on the business of spinning and weaving of cotton yarn and cloth. In consideration of the services rendered by the petitioner firm in the promotion of the company, it was then agreed, and it was also put into the Memorandum of Association as Clause 6, which runs thus:

"In consideration of the services rendered by the Firm of M/s. Al. AR. Arunachalam Chettiar in promoting and starting the company, the Firm of M/s. Al. AR. Arunachalam Chettiar and the firm of Deevan Bahadur P. Somasundaram Chettfar of Devakottah, their heirs, executors or administrators shall hereditarily be the Secretaries and Bankers of the said company and the said flans as from time to time constituted shall continue to be the Secretaries and Bankers of the Company and Mr. p. Somasundaram Chettiar shall be appointed the Local Agent of the company by the said Secretaries and Bankers and shall continue to be such Local Agent of the company until his life-time, and his successor or successors shall be appointed by the said Secretaries and Bankers. The Secretaries and Bankers shall receive a commission of 2 1/2 pies per Ib. on all yarn and cloth manufactured by the company as their remuneration including that of the local agent so appointed by them."

The hereditary rights of being the Secretaries and the bankers of the company under the Memorandum were also incorporated and detailed. In the Articles of Association 131 to 136. It will thus be seen that in conformity with the Memorandum and Articles of Association, the first respondent mills was being managed by the two firms specified therein. The said Somasundaram Chettiar functioned as their Local Agent till his death in 1929, leaving his adopted son, P S. Sathappa Chettiar. The latter acted as Local Agent for some time, and he died in March 1950. But even earlier as a result of the compromise decree obtained in some suits filed in the Colmbatore District Court, AL. AR. Kalairaja Chettiar, one of the members of the firm, was finally appointed as the local agent.

2. That continued till March 1954, when certain important changes were introduced in the management of the affairs of the company. All that is recorded in the minutes of the proceedings of the Board of Directors held on 20th March 1954. It took note of the fact that the financial position of the Mills was unsatisfactory and that the Mil's was not working for more than fortnight resulting in a huge loss to the mills, as also the attachment of the properties of the mills by the Income-tax Department, and the further- fact, that the mills could not start work without adequate finance raised for that purpose.

The local agent, Kalalraja Chettiar, withdrew from his office for a period of 2 years, agreeing not to exercise during the period of his leave any of the powers, authority and duties pertaining to the office of the local agent though he was permitted to continue as the ex officio director of the company. It was further resolves that the offer of Sri P. S. S. Somasundaram Chettiar, the adopted son of the said Sathappa Chettiar, to advance or to procure the advance of 15 lakhs of rupees to the company on the simple mortgage of the assets of the mills was accepted and he was appointed as the General Manager of the company and was entrusted with the whole administration and the management of the affairs of the mills, subject, of course, to the control and directions of the Board of Directors for a period of two years or until the loan to be advanced or the advance of which is procured by him is repaid with interest.

The result was that in March 1954 the petitioners' firm as well as their local acent, Kalairaja Chettiar, a member of that firm, "withdrew from their managing agency and agreed to vest the entire management of the mills in the hands of Somasundaram Chettiar as the general manager, because he agreed to finance the mills and put it into working order. Accordingly, Somasundaram Chettiar was in full management and control of the affairs of the mills not only for the period of two years mentioned in the resolution, but he continues to hold that office down to this date.

3. While so, after the coming into force of the new Companies Act on 1st April 1956, & on the basis of some legal opinion which the company is said to have obtained as to the definition of "Managing agent" in Section 2(25) of that Act, the Board of Directors met on 7th April 1956 and passed a resolution to this effect:

Resolved to record that with the coming into force of the Indian Companies Act, 1956, the Secretaries and Bankers of the Company have ceased to be entitled to the office of Secretaries and Bankers of the Company, and that accordingly the said office has become vacant by operation of law on and from 1st April 1956.

That as a consequence, the power and authority of the local agent of the secretaries and tankers of the company have also ceased and determined and that the said office has become vacant on and from 1st April 1956 and that the ex officio director has vacated his office." The Board of Directors have not taken any tangible action on that resolution. It is that resolution that has given rise to this writ petition. On the facts alleged in the writ petition itself, it would appear that the petitioners had withdrawn from their office as Managing Agents and surrendered the right of management to Somasundaram Chettiar as general manager in accordance with the resolutions of March 1954.

Since then, the said Somasundaram Chettiar has been in actual management and control of the affairs of the company and not the managing agents. It may be that the rights as managing agents continue; but the point is that they are not in actual enjoyment of those rights. The prayer in the present petition is not for restoration to that office. It is to restrain the respondents from enforcing that resolution. But if the petitioners are not in possession of their office as Managing Agents, then, it is difficult to see how that resolution can be enforced against them. There can be no question. In pursuance of that resolution, of their being thrown out of the office hereafter.

If so the object of this writ is reduced to one for a declaration that the resolution of 7th April 1956 was invalid and inoperative. No writ of mandamus can issue, the object of which is to declare the rights of the parties. If authority were needed for that proposition, it will be found in Naubat Rai v. Union of India, (A)

(paragraphs 19 and 23) and in Dubar Goala v. Union of India, (B). In the latter case, at page 498, it was

observed:

"Further, it is inappropriate to grant a declaration in an application under Article 226 that a particular contract is illegal and therefore unenforceable because it contains a provision for Begar Or forced labour."

4. We have not entered into the merits of the rights put forward by the petitioners, that is to say, whether the legal opinion on which the resolution of 7th April 1956 was passed was sound and whether the rights which the petitioners undoubtedly had as managing Agents were in any manner affected by the definition of "Managing Agents" in the new Companies Act. We do not choose to investigate into those questions for the reason that even assuming that the petitioners had those rights intact and unaffected by the new Act, Mr. K. Rajah Aiyar, for the respondents, contended as a preliminary objection that. In the circumstances of this case, a writ of mandamus should not issue from this Court. Under Section 50 of the Specific Relief Act of 1877, as it then stood, neither the High Court nor any Judge thereof shall thereafter issue any writ of mandamus.

That section has now been superseded by the present Section 50 which is to the effect that nothing in that chapter shall affect the power conferred on a High Court by Clause l of Article 226 of the Constitution As a first impression, it would appear as if the terms of Article 226 are of much wider import and give almost unlimited power to issue a writ of mandamus against any person and under any circumstances and for any purpose whatever. But as we shall show presently. It is now well established that the seemingly wide powers under that Article ought to be exercised only according to well established principles. Though under the Specific Relief Act, a writ of mandamus as such was not permissible, but orders and directions in the nature of mandamus could be issued on applications made under Section 45 of the Act. That section only reproduces the general principles of English Courts. Under the English law, the grant of a writ of Mandamus is, as a general rule, a matter for the discretion of the Court.

It is not a writ of right and is not issued as a matter of course. Some of the conditions precedent to the issue of writ of mandamus appear to be: (1) the applicant for a writ of mandamus must show that there resides in him legal right to the performance of a legal duty by the party against whom the mandamus is sought; (2) the Court will not Interfere to enforce the law of the land by the extraordinary remedy of a writ of mandamus in cases where an action at law will lie for complete satisfaction; in order, therefore, a mandamus may issue to compel something to be done, it must be shown that the statute imposes a legal duty; (3) the writ is only granted to compel the performance of the duties of a public nature; and (4) the Court will, as a general rule and in the exercise of its discretion, refuse a writ of mandamus when there is an alternative specific remedy at law, which is not less convenient, beneficial and effective.

We find that more or less the same principles are embodied in Section 45 of the Specific Relief Act. It enables the High Courts to make an order requiring any specific act to be done or forborne by any person holding a public office or by any Corporation or inferior Court of Judicature. The section contains a number of provisos, of which Clause (a) is to the effect that an application for such order shall be made by some person whose property, franchise or personal right would be injured by the forbearing or doing (as the case may be) of the said specific act. OF course, unless sonic personal right of the applicant is interfered with, there can be no remedy by the writ of mandamus.

As stated in Halsbury's Laws of England. 3rd Edn. by Lord Simonds, at page 105, the legal right to enforce the performance of a duty must be in the applicant himself and the Court will therefore only enforce the performance of statutory duties of public bodies on the application of a person who can show that he has himself a legal right to insist on such performance. In the present case, it may be conceded that the petitioners have got such personal right Then there is the proviso (b) to Section 45 of the Specific Relief Act, which is to the effect that such doing or forbearing is, under any law for the time being in force, clearly incumbent on such person or Court in his or its public character or on such corporation in its corporates character. Proviso (d) states that the applicant should have no other specific and adequate le al remedy. The contention against the maintainability of this writ petition advanced by Mr. Rajah Aiyar was based on the principles formulated in the provisos (b) and (d) of Section 45 of the Specific Relief Act.

5. Before we examine the scope and the applicability of those provisos to the facts of the present case, it would be convenient to clear the ground on the question whether, apart from the principles governing the issue of a writ of mandamus by the English Courts, that is to say, the principles formulated in Section 45 of the Specific Relief Act--the Court has got much wider powers Under Article 326 of the Constitution and whether if in fact this Court should possess such unlimited powers, it would exercise such powers without regard to the well established principles governing the issue of such writs.

In re, Nagabhushana, (C), to which one of us was a

party, an application was made for the issue of a writ of prohibition against the Election subcommittee of the All India Congress Committee, the Provincial Congress Committee and the District Committee, the Presidents of the Taluk and Town Congress Committees, etc., prohibiting them from holding Congress Primary panchayat Elections and to issue directions to the various authorities to prepare the electoral rolls of the Primary Congress members as per the rules of the Constitution and circulars issued by the various authorities,

In support of the application, the learned counsel relied on Article 226 of the Constitution as giving this Court power to issue the several directions ' which he sought in the petition. He stressed on the wide language employed in the Article, and, in particular, referred to the words to any person or authority" and "for the enforcement of any of the rights conferred by part III and for any other purpose". As a result of the construction sought to be placed by the learned counsel, he was compelled to the logical result that the article would enable any person aggrieved to obtain any relief by an application under the Article.

His Lordship the Chief Justice pointed out that on such construction, even a claim for money due on a promissory note could be enforced by means of a writ under the said Article a result which would practically abrogate the entire judicial system and the machinery set up for the administration of justice. His Lordship the Chief Justice observed at page 1121 (of ILR Mad): (at p. 250 of AIR):

"We do not think that Article 226 should be construed in this manner in spite of the wide language on which the counsel relied." The case is also Instructive as showing that the writ is available only against inferior Courts, Tribunals and Bodies entrusted by the law of the land with powers to affect the rights of parties, and not to a private organisation, however, wide-spread and powerful it might be. It was observed at page 1122 (of ILR Mad): (at p. 250 of AIR):

"Nevertheless, in law, it cannot be held to be a public body entrusted by the law of the land with powers and duties relating to the rights of the people."

6. In Indian Tobacco Corporation v. State of Madias, (D), a writ of mandamus was asked for against the State for preventing it from committing a breach of contract which the State threatened to commit. In that case also, the learned counsel repeated the contention that Article 228 of the Constitution was wide enough to apply to cases which would not fall within the scope of a prerogative writ of mandamus as understood in England, and in repelling that contention, His Lordship the Chief Justice observed at page 761 (of ILR Mad): (at pp, 551-552 of AIR):

"It is undoubtedly true that the extent of the power conferred on the High Courts under Article 226 is much larger than they ever possessed before. But we have no hesitation in holding that it is not an unlimited power. In our opinion, the words "to any person" mean "to any person to whom, according to well established principles, writs like these mentioned in the Article would he'; and the words 'any other purpose' must be read in the context in antithesis to the words 'for the enforcement of any of the rights conferred by Part III"."

7. In this connection, reference may also be made to Kallmattam Thippaswami, In re (E), where an application was made under Article 226 of the Constitution by a minor through his guardian for directions in the nature of a writ of mandamus, directing the respondents to forbsar from cutting the trees standing on certain survey numbers and removing the timber. Their Lordships rejected the application and observed thus;

' "In our opinion, Article 226 of the Constitution should not be construed so as to replace the ordinary remedies by way of a suit and application available to the litigant under the general law of the land. Directions in the nature of a writ of mandamus should not, in our opinion, issue under this Article, except to a public a quasi-public body or officer which is under an obligation statutory or otherwise to do or refrain from doing anything which is likely to interfere with the rights of persons. In this case, it is admitted that ordinarily the remedy of the petitioner would be by way of a suit and an application for injunction in the suit."

8. In the decision in Carlsbad M. W. Mfg. Co. Ltd. v. H. M. Jagtiani, (F), Mitter J. stated at page 318:

"But once the origin and history of High Prerogative writs are remembered, it is clear that the powers given to a High Court under Article 226 are to be exercised in accordance with the principles which governed the said writs. The power of the High Court to issue such a writ to any person can only mean the power to issue such a writ to any person to whom, according to well established principles, a writ lay. That a writ may issue to an appropriate person for the enforcement of any of the rights conferred by Part III is clear enough from the language used. But the words 'and for any other purpose' must mean 'for any other purpose' for which any of the writs mentioned would, according to well-established principles, issue."

Thus it seems to us to be clear that in spite of the apparently very wide language of Article 226 of the Constitution, we can issue a writ of prohibition or mandamus only in accordance with the well established principles and which are formulated in Section 45 of the Specific Relief Act. Mr. M. K. Nambiar, the learned counsel for the petitioners, drew our attention to an observation by one of the learned Judges of the Calcutta High Court in a Special Bench reported in Chairman, Budge Budge Municipality v. Mongru, (G):

"Thus the conditions appertaining to an application under Section 45 of the Specific Relief Act would not be strictly applicable to an application under Article 226 of the Constitution. Under the said Article, this Court has inter alia power in appropriate cases to issue to any person or authority any directions or orders for any purposes. Thus. Article 226 has conferred almost unlimited powers on the High Court to make suitable orders or to" give suitable directions which it can exercise in appropriate cases. The present case is in my opinion, an appropriate case where the jurisdiction conferred by Article 226 can be exercised."

In this connection, the following observation at page 144 in the decision in (A) seems pertinent:

"In my opinion, the petitioner has not been able to bring his case within the principles underlying Section 45 of the Specific Relief Act which are the principles which govern the issue of a writ of Mandamus under Article 226."

9. We will now take the proviso (b) to Section 45 of the Specific Relief Act, whether under the terms of that proviso the petitioners can ask this Court for the issue of a writ of mandamus. According to that proviso, the doing or forbearing should be (1) under any law for the time being in force, clearly incumbent on such person or corporation or Court; (2) on such person or Court in his or its public character or on such corporation in its corporate character. That is to say, there must be a legal or a statutory duty imposed on the person, corporation or Court, and the person Or the Court should act in his or its public character and the corporation in its corporate character.

It will be seen that the expression public character is tacked on to the person and Court, whereas corporate, character to the corporation, for all corporations may not have a public character. In the first place, we will consider whether in this case there was any duty cast upon the first respondent company with reference to the petitioners under any law for the time being in force. As we stated, the dispute in this case centres on the managing agency rights conferred on the petitioner's under the Memorandum and the Articles of Association already referred to. Their learned counsel, Mr. Nambiar, drew our attention to some sections of the Companies Act, in particular, Sections 36 and 291. Section 36 provides that subject to the provisions of the Act, the memorandum and the articles shall bind the company and the members thereof to the same extent as if they respectively had been signed by the company and by each member and contained covenants on its and his part to observe all the provisions of the memorandum and articles of association.

This section makes the memorandum and the articles binding on the company and the members thereof as if they had been signatories thereto. Section 291 of the Act defines the general powers of the Board of Directors, that is to exercise all such powers and do all such acts and things as the company is authorised to exercise and do. The first proviso to that section directs that the Board shall not exercise any power or do any act or thing which is directed or required, whether by the Act or the memorandum and the articles of the company to be exercised or done by the company in a general meeting; and the second proviso directs that in exercising any such power or doing any such act, the Board shall be subject to the provisions contained in the Act arid in the memorandum and articles of the company that is to say, the Board of Directors shall exercise their powers and do acts only in conformity with the memorandum and the articles of association.

It is therefore contended that in the present case, the agency rights which the petitioners claim and which are embodied in the memorandum and the articles of association are binding upon the company, and as such under the law for the time being in force, it is incumbent upon the company to respect the rights of the petitioners within the meaning of Clause (b) of Section 45. No doubt, the memorandum forms the constitution of the company, and the articles, the rules regulating the conduct of the affairs of the company, and as such, forms part of the law so far as the company is concerned. Nevertheless, those particular provisions in the memorandum and the articles of association were the result of a contractual arrangement entered into between the company and the petitioner with reference to their managing agency rights, and it is only those contractual rights that are put into the memorandum and the articles of association.

It therefore seems to us that it is only because of the contractual obligations, the company would be bound to respect the rights of the petitioners and not because they are enjoined to do so by any law or statute for the time being in force within the meaning of proviso (b). We are of the opinion that the duty sought to be enforced by the petitioners in the present case, though embodied in the memorandum and articles of the company, cannot be placed on a higher footing than a contractual obligation, of which the articles and the memorandum are only the documented evidence. It has been held in a number of cases that a Mandamus does not lie to enforce a contractual obligation vide P. K. Banerjee v. L. J. Simonds, AIR 1947 Cal 307 (H & I) and AIR 1952 Cal 498(B). In (D), already referred to, at page 761 (of ILR Mad): (at p. 551 of AIR), it was observed:

"We are clearly of opinion that the appellants are not entitled to a writ of mandamus to enforce their contractual rights.''

It is therefore clear that the duty Imposed on the person, corporation or Court must be a duty imposed by any statute Or law for the time being in force, and we are of opinion that in the present case there is no such statutory duty imposed on the first defendant-company to recognise the agency rights of the petitioners. An order of mandamus will be granted only for ordering that to be done which a statute or rule of law requires to be done, and not for the enforcement of contractual obligations.

10. It is also important to notice with reference to the proviso (b) of Section 45, the person or Court against whom the writ is asked for must have functioned in his or its public character or, if it were a corporation, in its corporate character, which appears to us necessarily to imply that what the persons, corporation or the Court does must be in the nature of a public duty.In Halsbury's Laws of England, Simonds Edn. vol. II, at page 84, this is what is stated:

"The order of mandamus is an order of a most extensive remedial nature, and is in form, a command to any person, corporation, or inferior tribunal, requiring him or them to do some particular thing therein specified which appertains to his or their office and is in the nature of a public duty."

Again at page 105, it is thus stated:

"The order is only granted to compel the performance of duties of a public nature. It will not, accordingly, issue for a private purpose, that is to say, for the enforcement of a merely private right."

11. A Full Bench of the Patna High Court observed in Surajmul Brijlal v. Commissioner of Income-tax, B & O, AIR 1930 Pat 538 at P. 539 (J):

"It is. used principally for public purposes and to compel performance of public duties though it may also be used to enforce private rights when they are withheld by public officers."

12. In the present case, the petitioners' complaint is that the first respondent-company, by its resolution of 7th April 1958, refused to recognise the managing agency rights of the petitioner and declared that those rights had ceased to exist on and from 1st April 1956 by reason of the new Act coming into force. The passing of that resolution was not in the nature of a public duty performed by the company. It was a matter entirely between the company on the one hand and the petitioners on the other in regard to certain private rights which the petitioners claimed. There was nothing in the nature of a public duty to be discharged by the company.

13. No doubt, as contended by Mr. Nambiar, all corporations are in some respects, public. He relied on the following passage at page 498 in High Prerogative Writs, Vol. I, by A. S. Chaudhri:

"All Corporations are in some respect public; that is they derived their very existence and their franchise from the public and owe to the public the performance of certain duties, which the public functionaries may enforce. They are private in other respect, but with respect to the performance of duties which relate to the private management or operation of the corporate affairs or enterprise, the officers occupy a position analogous to that of trustees, as respect the members of the Corporation, and their duties as such may ordinarily be enforced by mandamus."

But that does not mean that whatever a corporation does, would be in the nature of a public duty. . That would depend upon the circumstances in which the duties are performed. In fact, it is observed in the same book at page 499:

"Such duties, so far as they relate to the public are in fact public duties or duties which they owe to the public."

Here, what the company did did not relate to the public, nor was it a duty which it owed to the public.

14. The cases on this point are numerous, but instructive. We have already referred to two Bench decisions of our High Court, namely, "' 'C) and (D). In both the cases, a

writ of mandamus were refused, under the earlier case against the congress party, and in the latter case, against the Government. In the latter case, what was sought to be enforced by means of a writ was contractual rights. We may also refer to another Bench decision of our High Court reported in Ganapathi v. Tinins Barytes, Asbestos and Paints Ltd., (K). In that case, the directors of a company who were duly elected filed an application for a writ of mandamus for an order, directing the respondents who were the company and its managing agents, to deliver to them all the records and documents and other properties in their possession. The Mandamus was refused on the ground that the application Would be barred both under provisos (b) and (c) of Section 45 of the Specific Relief Act. It was observed:

"There can then be no question of their being directed to do or forbear from doing anything in their public character."

In that case, reference was made to In re, Albert Mills Co. Ltd., 9 Bom HCR 438 (L), a case referred to by Mr. Nambiar. In the Bombay case, it was held that the High Court had jurisdiction to enforce by mandamus the right of duly elected directors by the company to exercise the functions of directors if such rights are interfered with by the company acting through its other directors. At page 444, we find the following observation:

"I am at a loss to see by what other remedy the right of such persons could be enforced unless a writ of mandamus were grantable; and the absence of any other remedy has been always regarded as a strong ground for the Court to award such writ."

15. So, the Bombay case was explained in the Madras case on the ground that a Mandamus was issued in the Bombay case against the company as there was no other remedy. Decisions of other High Courts were brought to our notice such as (P), (B),

Union of India v. Elbridge Watson, (M) A. C Gilbert v. Registrar H. C., Allahabad, (N) and

(A), to all of which, however, a detailed reference

is not necessary. Mr. Rajah Aiyar also drew our attention to some of the English cases: The King v. Governor and Company of the Bank of England, (1819) 106 ER 492 (O), It was held that the Court would not grant a mandamus to a trading corporation at the instance of one of its members to compel them to produce their accounts for the purpose of declaring a dividend of their profits, Abbot, C. J., observed:

"A mere trading corporation differs materially from those which are entrusted with the government of cities and towns and therefore have important public duties to perform. No instance has been cited in which the Court has granted a mandamus to a corporation like the present, and I think we ought not now to establish the precedent."

Bayley. J., observed:

"The Court never grant this writ except for public purposes and to compel the performance of public duties, this is an application at the instance of one of several partners in a trading company, to compel his co-partners to divide their profits; but that is a mere private purpose and presents a fit subject for enquiry on the other side of the Hall. There is no instance in which the Courts have granted a mandamus to a trading corporation; and that being so, I think that we should not now grant it for the first time."

16. The above observations are significant and show that ordinarily a writ of mandamus cannot issue to a private trading corporation like the present one unless it acts or fails to act in the discharge of a public duty, and so far as the rights claimed by the present petitioners are concerned, we are unable to see how the first respondent company owed a public duty which it failed to discharge. In the King v. London Assurance Co., (1822) 106 ER 1420 (P), an application was made to the Court for a mandamus to the defendant company requiring them to permit a transfer to the assignees of a bankrupt, of 80 shares in the capital stock of the corporation. The company refused to permit a regular transfer of the shares into the names of the assignees to be made. The Court held:

"We are not aware of any instance of a mandamus like the present having ever been granted and if we were to grant this, we should be called upon to interfere in all cases -of dispute between the members of private corporations. This company, although carried on under a royal charter, is a mere private partnership. But the writ of mandamus is a high prerogative writ, and is confined to cases of a public nature. The rule, therefore, must be refused."

17. In Ex parte Briggs, (1859) 120 ER 1141 (Q), it was held that an applicant for a mandamus to allow him to Inspect and take copies from the parish accounts must show some tangible public ground for the application and that he cannot rest it upon his mere private right, as an in individual to inspect. Erie, J., held that a parishioner's right to inspect the parish rate-boos is a mere private right and that therefore, in order to entitle him to a mandamus to inspect, he must show, besides his private right, some grounds of a public nature. Having regard to these decisions and to facts of the present case, it seems to us that there are no grounds of a public nature involved in this case and that in denying the petitioners' right as Managing agents, there is no question of any public duty involved, the matter being purely a private right between the petitioners on the one hand and the company on the other based upon contractual relations which are incorporated in the Memorandum and the Articles of Association. In this connection. It will be relevant to note that Ch. VIII of the Specific Relief Act bears the heading "Of the Enforcement of Public Duties", which gives an indication of the intention of the Legislature that unless something was done or forborne in the discharge of a public duty either by the person or the Court in his or its public character or a corporation in its corporate character, it will not be appropriate to issue any order or direction in the nature of a mandamus under that section. As to the value of headings in interpreting Statutes, reference may be made to Eastern Counties and Companies v. Francis Marriage, 1360-9 HLC 32 (R), Vide also Calcutta Corporation v. Sub-Postmaster, Dharamtola (S). In this connection, we may also refer to another English decision in R. v. Government Stock Investment Co., (1878) 3 QBD 443 (T). In that case, two vacancies arose amongst the directors of a company and there were four candidates, of whom the prosecutor was one. At the meeting for election, a show of hands was taken, when the prosecutor obtained the largest number of votes. A poll was then demanded by the Deputy Chairman who was the holder of 20 shares only, but who he'd proxies for more than 2,000 shares. At the poll the prosecutor was not elected. He now claimed to have been elected by the show of hands on the ground that the poll was illegally demanded as the holder of proxies was not, by virtue of them entitled to demand a poll. Their Lordships made the rule absolute for mandamus against the defendant company to admit the prosecutor as a director of the company. But the question whether it was a fit case for the issue of a mandamus was not considered at all. The case was decided only on the ground that the poll was illegally demanded.

18. We next proceed to consider pro iso (d) to Section 45 of the Specific Relief Act. According to that proviso, the applicant shall have no other specific and adequate legal remedy. In Halsbury's Laws of England, Vol. II, 3rd Edn., it is stated the purpose of mandamus is to supply defects of justice, and accordingly it will issue to the end that justice may be clone in all cases where there is a specific legal right and no specific legal remedy for enforcing that right; and it may issue in cases where, although there is an alternative legal remedy, yet that mode of redress is less convenient, beneficial and effectual. The same proposition is stated at page 107 of the same Book as follows:

"The Court will, as a general rule, and in the exercise of its discretion, refuse an order of mandamus, when there is an alternative specific remedy at law which is not less convenient, beneficial and effective "

At pace 108 it is staled:

"The Court will not interfere to enforce the law of the land by the extra-ordinary remedy of an order of Mandamus in cases where an action at law will lie for complete satisfaction.''

At the same time, it is pointed out at page 109:

"Apparently, the fact that an action for a mandamus will lie does not necessarily exclude the remedy by order of mandamus."

19. These propositions appear to be so well established that we are indeed reluctant to refer to all the decisions, to which our attention was drawn during the course of the argument. We may, however, refer to a passage at page 1122 (of ILR Mad): (at p. 250 of AIR) of the decision in (C), which is to the following effect:

"In our opinion, the general rule applied to the case of writs like mandamus, prohibition and ertiorari, namely, that these writs will not issue if there is another adequate remedy, should apply to the issue of a direction, order or writ under Article 226(1) in spite of the apparently wide language employed. In this case, the petitioners could well have filed a suit and obtained immediately an urgent order of injunction and thus obtained the same reliefs which they seek from this Court."

20. Reference may also be made to In the Matter of Bombay Fire Insurance Co., Ltd., ILR 16 Bom 398 (U), where an application under Section 45 was refused, seeking for directions against the Directors of a company for registration as a shareholder in respect of shares purchased by the applicant on the ground that Section 58 of the Companies Act afforded the applicant a remedy, adequate and appropriate, and recourse cannot therefore be had to the Chapter of the "Enforcement of Public Duties". As stated in Halsbury's Laws of England, the fact that an action for mandamus will lie does not necessarily exclude the remedy by order of mandamus and it may issue in cases where although there is an alternative legal remedy, yet that mode of redress is less convenient, benefic at and effectual. As an instance, reference may be made to a recent decision of a Bench of our Court reported in Subramanian Chettiar v. R. D. O. Devokattah, 1956-2 Mad LJ 126: ( (S) AIR 1956 Mad 454) (V), and at page 131, (of Mad LJ): (at D. 457 of AIR), their Lordships observed:

"Normally, it will not issue a writ where there is an alternative remedy. But it is well settled now, by decisions of the Supreme Court and the High Court, that there is no absolute bar to entertaining writ petitions and issuing a writ even when there are alternative remedies, when these alternative remedies are, in the opinion of the Court, not effective, speedy, adequate or sufficient and the facts, of each case have to be considered before deciding whether the alternative remedies are speedy, effective sufficient or adequate."

21. The question in the present case, therefore, is whether the normal remedy of a suit is not available to the petitioners, as an adequate remedy. As stated already, the object of the present writ is to direct the respondents to forbear from enforcing in any manner the resolution passed by respondents 2 to 9 on 7th April, 1956. It is for the petitioners to satisfy the Court that they cannot get that remedy in a regular action for mandamus. Ordinarily, it must be held that such an action would lie. But their learn d counsel, Mr. Nambiar, contended that in the circumstances of the present case, a suit for that specific remedy will not be maintainable and in support of his contention, he relied on the following decisions: Mothey Krishnarao v. Anjaneyalu, (W); Ramkumar Potdar v, Sholapur Spinning and Weaving Co. Ltd.. ILR 59 Bom 218: (AIR 1934 Bom 427 (X); Boulton Bros. & Co. Ltd.. Delhi v. New Victoria Mills Co. Ltd., CaWnpore, AIR 1929 All 87 (Y); Gulab Singh v. Punjab Zamindara Bank Ltd., Lyallpur, AIR 1940 Lah 243 (Z); Ramchandra v. Chinubhai Lalbhai, AIR 1944 Bom 76 (Zl). In the Madras case, (W), the plaintiff filed a suit for a

declaration that hp was the secretary and treasurer of Krishna Jute Mills Ltd., Eluru, against four defendants who were the directors of the company and who adopted a resolution for removing the plaintiff from the post of secretaryship. The claim was based upon the memorandum and the articles, as in the present case. It was held that the plaintiff had no cause of action against the company on the basis of the articles, because it was pointed out that under Section 21 of the Indian Companies Act, not only third party, but even a shareholder cannot sue the company on anything contained in the articles, treating them as a contract by the company with him. That was the main ground on which the plaintiff was non-suited; that is to say he had no cause of action against the company on the basis of the articles, though we are not sure whether that would be the position even under the new Section

36. Even so it would not be a case where the plaintiff had a regular right but without a legal remedy. That would be a case where he had no legal right at all, and if he had no cause of action for an action for mandamus, clearly he cannot ask for a writ of mandamus. In that case, when the appeal was argued in this Court, permission was granted to amend the plaint for the following consequential relief, namely, an injunction restraining the defendants from interfering with the plaintiff's exercise of powers and duties as secretary and treasurer. But then it was held that the declaration sought by the plaintiff with the consequential relief would really tantamount to specific performance of a contract of personal service, and therefore hit by Section 21 (b) of the Specific Relief Act. The Bombay case, ILR 59 Bom 218: (AIR 1934 Bom 427) (X), was a suit by the shareholders of a company for ft declaration that certain resolutions passed by the directors were ultra vires and for an injunction restraining the company from carrying out the said resolutions, the resolutions being that the agreement for the employment of certain persons as managing agents of the company be determined. It was observed in that case that no Court will make an order or grant an injunction, the effect of which will be to compel specific performance of a contract of personal service. It is therefore contended that in the Present case, in a suit were to be filed against the respondents to direct them to forbear from enforcing in any manner the resolutions passed by them on 7th April, 1956 which is the same thing as restraining the company and its directors from carrying out the said resolutions, as was the prayer in the Bombay case, then, such an order or direction would in effect enforce a contract of personal service, the managing agency being such service. In the law of Specific Relief by Agarwala, 1951 Edn. at p. 450, it is pointed out that the services of managing agent of a company Involved doing of acts which involved personal discretion, personal qualifications and confidence citing as authority the decision in AIR 1944 Bom 76 (Zl). But then, the question is whether, if an injunction which in effect would amount to specific Performance of a contract of personal service cannot be granted in an action for mandamus on the ground that such a contract is dependent on personal qualifications or violation of the parties as contemplated in Section 21 (b) of the Specific Relief Act, a writ of mandamus can issue to effectuate the very same purpose. It is our firm opinion that if a person cannot get a particular relief he cannot certainly get over that difficulty by asking for a writ of mandamus and thereby obtain that very relief which he would not be entitled to under the common law. The object of mandamus is not to give a party what he is not entitled to under the law. The object is to supply defects of justice, and that justice may be done where there is a legal right but no specific legal remedy for enforcing that right. If in respect of a right there is no particular remedy, such as injunction or specific performance, the absence of such remedy could not be rectified and a remedy created where none exists. For instance, if a right in respect of which there is a legal remedy in the sense that it can normally be enforced in an action, happens to be barred by the law of limitation, it cannot be stated that the party claiming that right has no remedy and therefore he can ask for a prerogative writ of mandamus to get over the bar of limitation. In the present case nothing would prevent the petitioners from filing a regular suit in a civil Court for a declaration that the resolution of 7th April, 1956, was invalid and inoperative and for consequential reliefs such as injunction restraining the company from enforcing that resolution. It is true that there is no guarantee that such a suit would succeed. It might fail for want of proof or merits or on the ground of limitation, or for come other defect. It cannot be stated that the tight which the petitioners claim is one which has no legal remedy and therefore a writ of mandamus should issue In fact there is Clause (h) to Section 45 itself to the effect that nothing in that section shall be deemed to authorise any High Court to make any order which is otherwise expressly excluded by any law for the time being in force,

22. Further, a right may carry with it more than one remedy, so that a person whose right is invaded may sue for remedies such as (1) specific performance (2) injunction, and (3) damages. He may not succeed in getting the reliefs of specific performance and injunction. That does not mean that he has no remedy for his right. He has still the remedy of damages -- such damages as would afford complete satisfaction. In the present case, even if the petitioners may not get the other reliefs such as specific performance or injunction, they may well seek satisfaction in damages. Their right is not a right of such character as cannot be compensated by money. But Mr. Nambiar contended that the remedy must be more or less of the same character, if not Identical with the one asked for under the writ, and that when he asked for specific performance or injunction, he cannot be told that damages would be adequate compensation. In support of Ms contention he relied on a passage at p. 369 of High Prerogative Writs, by A.S. Chaudhari, Vol. I, which is to this effect:

"Ordinarily, the remedy must be such as will enforce the right or compel the performance of the particular duty in question, in effect, specific performance, and not merely a remedy which In the end saves the party to whom the duty is owned unharmed by its non-performance."

We fail to see how that observation supports the contention. What is important is that the remedy must be such as will enforce the right The enforcement of the right may be in the form of various remedies. The question is whether the remedy that would be available will not be proper and adequate. The petitioners' rights are only the rights of managing agents with some remuneration attached to it. We fail to see why, even if they should fail to obtain specific performance or injunction, they should not be satisfied with adequate compensation in money.

23. Mr. Nambiar, the learned counsel for the petitioners, did not allow the matter to rest there. He further contended that even if it should be considered that the normal remedies available to the petitioners would be adequate; the circumstances of the present case would warrant the issue of a writ, because there are certain well-recognised exceptions to that rule. In support of his contention, he relied on a recent decision of the Bombay High Court in S. C Prasher v. Vasantsen Dwarkadas, (S) (Z2), where a writ of mandamus was

asked for against the Income-tax Officer, restraining him from proceeding further, pursuant to a notice under Section 34 of the Income-tax Act. It was held in that case that the notice issued by the Income-tax Officer and challenged in the writ petition was a notice that was issued out of time and therefore Invalid. In the circumstances of that case, the learned Judges found it difficult to accept the contention that a suit would be an adequate KT medy, because a notice would have to be given under Section 80, C. P. C., and a suit usually resulted In dilatory proceedings. The learned Judges then proceeded to consider the exceptions to the ordinary rule that the Court will not give relief by means of a writ when the petitioner can get the same relief by ordinary legal remedies available to him. They formulated the following exceptions: (1) if the threat Involves encroachment upon the fundamental right of the petitioner, the Court will interfere and will not compel him to exhaust his legal remedies; (2) if the authority against whom a complaint is made has violated rules of natural justice, the Court will interfere and protect the petitioner and not insist upon his going to a higher tribunal for relief; (3) when there is a complete absence of jurisdiction and such absence of jurisdiction is apparent on the face of the record, that in the case of administrative officer or tribunal, meaning without authority or beyond his competence. In Himmatlal Hanlal v. State of M. P., (Z3), the

applicant-company, fearing that it might be subjected to the payment of sales tax without authority of law, preferred to the High Court an application for writ for protection from the impugned Act and its enforcement by the State. It was held that the State evinced an intention to apply the penal provisions of the Act against the applicant-company if it failed to make the return or to meet the demand, and in order to escape from such serious consequences threatened without authority of law and infringing fundamental rights, relief by way of a writ of mandamus was clearly the appropriate relief. Their Lordships pointed out that a threat by the State by using the coercive machinery of the impugned Act to realise from the applicant is a sufficient infringement of his fundamental rights under Article 19 (1) (g) and it was clearly entitled to relief under Art 226 of the Constitution. It was further pointed out that in that case, the remedy provided by the Act was of an onerous and burdensome character, because before the applicant-company could avail itself of the remedy, it had to deposit the whole amount of the tax, and such a provision could hardly be described as an adequate alternative remedy. In other words their Lordships of the Supreme Court: recognised that the principle that a Court will not issue a prerogative writ when an adequate alternative remedy was available could not apply where a party came to the Court with an allegation that his fundamental right had been infringed and sought relief under Art 226. But the question is whether that exception is applicable to the present case, and for deciding that question it will be necessary for the petitioners to establish that in the present case there has been a violation of their fundamental rights. No doubt to acquire, hold and dispose of property is a fundamental right, guaranteed under Article 19(1)(f) of the Constitution, and the contention of Mr. Nambiar was that the managing agency rights, claimed by the petitioners was such right. He maintained that the petitioners according to the Memorandum of Association, had hereditary rights and therefore their rights were analogous to the rights of hereditary trustees of temples or mutts or other religious institutions. In support of his contention, he cited two decisions: Narayanan Nambudiripad v. State of Madras, (Z4) and Commissioner H. R E. v. Lakshmindra Thirtha Swamiar, (Z5). In the Madras case, the incidents of hereditary trusteeship were discussed and the conclusion reached was that there was ample authority for the view that trusteeship where hereditary, is in the nature of property. Their Lordships observed:

"We are accordingly of opinion that hereditary trusteeship is within the protection afforded by Article 19(1)(f), even though there was no emoluments attached to the office."

24. In the other case, in discussing the rights of a mahant their Lordships of the Supreme Court at P. 288 made this observation:

"There is no reason why the word 'property' as used in Article 19(1)(f) of the Constitution should not be given a liberal and wide connotation and should not be extended to those wellrecognised types of interest which have the insignia or characteristics of proprietary right. As said above, the ingredients of both office and property, of duties and personal interest are blended together in the rights of a Mahant and the Mahant has the right to enjoy this property or beneficiai interest so long as he is entitled to hold his office."

But we fail to see what analogy there can be, and how any comparison can be made, between hereditary trusteeship and managing agency. The managing agency, though it may be called hereditary, is a right arising out of contractual relationship -- a contract of personal service -- as was held in the cases already cited. The fact that It was to be a hereditary managing agency may have a bearing on the duration of the right and would not alter its nature or characteristics. It cannot possibly be contended that the office of agency can be called property within the meaning of Article 19(1)(f) of the Constitution. The right of hereditary managing agency conferred under the Memorandum and the articles of the company was EN result of an arrangemeat entered into between the petitioners' firm and the other firm on the one hand and the company on the other. We are also unable to understand what the hereditary managing agency would mean with reference to a firm. Such hereditary rights were not conferred on the firm even as a joint family firm. On the other hand, Clause. (6) of the Memorandum shows that the right shall be hereditarily vested in the said firms and their heirs, executors or administrators and in the said firing as from time to time constituted; that is to say, it contemplates even strangers, and not necessarily members of the joint family, becoming member's of the firm. Let us, however, assume that the rights claimed by the petitioners are in the nature of property within the meaning of Article 19(l)(f) of the Constitution. Even so, the question is whether the writ prayed for should issue against the respondent-company and its directors. It is true that even in a case where the violation of fundamental rights related to property, a writ of mandamus was issued by the Supreme Court in State of Rajasthan V. Nathmal, (26). But it will be seen that in all those cases, the infringement of fundamental rights was by the State and the writ issued against the State even though the remedy at law was available. Mr. Nambiar has not been able to rite any decision in which a writ was issued for violation of rights to property by individuals or companies. On the other hand, in P. D. Shamdasani v. Central Bank of India Ltd., 1952 SCJ 29: (AIR 1952 SC 69) (Z7), a petition was filed to the Supreme Court under Article 32 of the Constitution for the enforcement of the petitioner's fundamental rights under Article 19(1)(f) arid Article 31 CD alleged to have been violated by the Central Bank of India Ltd. The petitioners held five shares in the share capital of the bank which sold those shares to a third party in exercise of its rights of a Hen for recovery of a debt due from the petitioner. Their Lordships held that the petition must fail on a preliminary ground. They pointed out that neither Article 19(1)(f) nor Article 31 CD, on its true construction, was intended to prevent wrongful individual acts or to provide protection against merely private conduct and that the language and structure of Art 19 and its setting in Part III of the Constitution showed that the article was intended to protect those freedoms against the State action and that the violation of rights of property by individuals was not within the purview of the Article. They further pointed out that similarly the words save by authority of law in Clause (1) of Article 31 showed that it was a prohibition of unauthorised governmental action against private property. According to their Lordships, it was a fundamental misconception that Article 19(1)(f) and Article 31(1), which are great constitutional safeguards against State aggression on private property, are directed against infringement by private individuals for which remedies should be sought in the ordinary law. It follows that the attempt of Mr. Nambiar to bring this case within the terms of the first exception must fail.

25. Mr. Nambiar then endeavoured to bring his case within the third of the exceptions stated above, namely, complete absence of jurisdiction apparent on the face of the record. He contended that the Directors, namely, respondents 2 to 9 had no power to remove the petitioners as managing agents, because under Article 136, the Secretaries and Bankers shall not be removed from office otherwise than by their own resignation or except on fraud being established. There were no such grounds in the present case. The learned counsel therefore contended that so long as the Memorandum and the Articles of Association remained un-amended, there was no power vested in the Directors to terminate the services of the managing agents. But it will be seen that by their resolution of 7th April, 1956, they did nothing of that kind. They merely recorded their opinion, supposed to be based upon the opinion of their legal experts, that with the coming in to force of the Indian Companies Act, 1956, the Secretaries and the Bankers of the company had ceased to be entitled to the office and accordingly the said office had become vacant by operation of the law as and from 1st April, 1956. Even otherwise, it cannot be stated that the want of authority was apparent on the face of the record. That would depend upon the soundness of the legal opinion on which that resolution was based. Then it was contended that, notwithstanding the arrangement of March 1954, Kalairaja. Chettiar though he ceased to be the local agent, nevertheless, continued as ex-officio director of the company, and for the directors' meeting of 7th April 1956 no notice was issued to him, and that, therefore," the resolution of that date was wholly invalid. In Halsbury's Laws of England, 3rd Edn., Vol. VI, at p. 315, we find the following statement of the law:

"A meeting of Directors is not duly convened unless due notice has been given to all the directors, and the business put through at a meeting, not duly convened is Invalid,"

But in this case, the respondents dispute the fact that Kalairaja Chettiar continued to be the director on 7th April 1956, for, their contention is that by reason of his continuous absence from the meetings, he forfeited his right as a director. That is a question of fact, which we cannot go into in this petition. Their contention also was that by two resolutions of the Board of Directors in May-June 1954. It was decided that the director's meeting should be held on the first Saturday of every month at 10-30 a.m., and that those resolutions were duly served on Kalairaja Chettiar -- a fact which Mr. Nambiar was not prepared to controvert. But he contended that any such intimation of meetings for all times would not be in conformity with the requirements of Section 256 of the Companies Act. But that section does not prescribe the form of the notice or the mode of its service and if the directors are duly informed that in future the meetings would be held on the first Saturday of every month, we fail to see why it should not be a sufficient compliance of the Statute.

26. In our opinion, therefore, the circumstances of this case do not call for the issue of a writ of mandamus or any other writ or direction, and we accordingly dismiss this petition with costs. (Separate sets).


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