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Debi Jhora Tea Co. Ltd. Vs. Barendra Krishna Bhowmick and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKolkata High Court
Decided On
Case NumberApplication in Appeal No. 107 of 1977
Judge
Reported in[1980]50CompCas771(Cal)
ActsCompanies Act, 1956 - Sections 397, 398, 402, 403 and 406
AppellantDebi Jhora Tea Co. Ltd.
RespondentBarendra Krishna Bhowmick and ors.
Appellant AdvocateSankar Ghosh, Adv.
Respondent AdvocateSamaren Sen, Adv.
DispositionApplication dismissed
Cases ReferredBennet Coleman and Company v. Union of India
Excerpt:
- ghose, j.1. this application has been made in the appeal that is now pending from an order made in an application under sections 397, 398, 402, 403 and 406 of the companies act, 1956, in the company petition no. 392 of 1975. the said company petition was made in regard to the affairs of debijhora tea company ltd. (hereinafter referred to as the ' said company') and was disposed of by the judgment and order passed by salil k. roy chowdhury j. on march 31, 1977.2. in the interlocutory application made in the appeal for stay of the said order under appeal, dated march 31, 1977, passed by salil k. roy chowdhury j., superseding the board of directors of the company and appointing mr. t, p. das as special officer, the appeal court on april 6, 1977, passed, inter alia, the following orders :'.....
Judgment:

Ghose, J.

1. This application has been made in the appeal that is now pending from an order made in an application under Sections 397, 398, 402, 403 and 406 of the Companies Act, 1956, in the Company Petition No. 392 of 1975. The said company petition was made in regard to the affairs of Debijhora Tea Company Ltd. (hereinafter referred to as the ' said company') and was disposed of by the judgment and order passed by Salil K. Roy Chowdhury J. on March 31, 1977.

2. In the interlocutory application made in the appeal for stay of the said order under appeal, dated March 31, 1977, passed by Salil K. Roy Chowdhury J., superseding the board of directors of the company and appointing Mr. T, P. Das as special officer, the appeal court on April 6, 1977, passed, inter alia, the following orders :

' The Court: The order of the learned trial judge will remain stayed subject to the following modifications :

1. The special officer, Mr. T.P. Das, appointed by the learned trial judge at the remuneration fixed by him will be present at each board meeting of the company as an observer. He will, however, have no right to participate in the deliberations of the board meeting or to cast any vote in the same.

2. The order of the learned trial judge superseding the board is stayed in its entirety and the board will continue to function in the usual way. If at any such board meeting, there is any dispute between the members of the board, all such disputes should be referred to the specialofficer, who will be present at such board meeting as observer, and the special officer will submit a report to the court with his comment. '

3. By another order dated March 14, 1978, thcoriginal appellants Nos. 3, 4 and 5, Bimal Kumar Hoare, Nirendra Nath Bagchi and Samarendra Nath Sen Gupta were transposed from the category of appellants to the category of respondents. Out of them, Bimal Kumar Hoare and Samarendra Nath Sen Gupta are two of the petitioners in the instant application. Mr, T. P. Das, the special officer, has been acting in terms of the above-mentioned order dated April 6, 1977.

4. The total paid up capital of the company is Rs. 4,62,964.81 consisting of 30,000 fully paid up equity shares of Rs. 15 each. The value of the shares forfeited stand at Rs. 12,964.82. The petitioners in the instant application are holders of, in the aggregate, 1,806 equity shares and claim that the members of the family of petitioners Nos. 1, 2 and 4 also hold considerable part of the shares in the company. The petitioners also claim to have the support of one Sunil Kumar Ray stated to be the largest single shareholder of the company holding 4,800 fully paid up equity shares. Members of the family of Sunil Kumar Ray also are stated to be holders of 1,500 equity shares in the company and Rabindra Nath Sen Gupta and members of the family are stated to be holders of 2,145 equity shares in the company.

5. The annual general meeting of the company for the year 1974-75 was convened to be held on 27th December, 1975, at 12-30 p.m. at the registered office of the company. One of the agenda of the said meeting was that the petitioners Nos. 3 and 4 in the instant application who were two of the retiring directors were eligible for re-election at the meeting. On December 14, 1975, the secretary of the company issued notice under Section 257(1)(a) of the Companies Act intimating that three nomination papers, namely, by Bela Devi, Kartick Acharya and Dilip Kumar Ghosh signifying their intention to propose the names of Sukumar Ray, Sarajit Kumar Bagchi and Sunil Kumar Ray, respectively, for appointment as directors of the said company at the proposed annual general meeting due to be held on December 27, 1975, had been filed. In the Company Petition No. 392 of 1975, an interim order was passed by Salil K. Roy Chowdhury J., that the above-mentioned annual general meeting would be held only for the purpose of adjournment and in terms of the said order, the said meeting was held on 27th December, 1975, and was adjourned.

6. On May 17, 1977, the appeal court directed the holding of the adjourned annual general meeting of the company for the year 1974-75 within 7 weeks from the said date. It was directed that notice of the adjourned meeting would state that the shareholders who would not be able to attend personally would be entitled to submit their proxies and fresh proxieswould be submitted to the special officer at his residence. The special officer was directed to preside over the meeting. On 25th August 1977, the appeal court, inter alia, gave liberty to the special officer to fix time for holding the adjourned annual general meeting. By an order dated September 23, 1977, the appeal court, inter alia, directed that the adjourned annual general meeting would be held on the 3rd of February, 1978, and notice of such meeting would be served on all members whose names would appear in the share register on 23rd December, 1977. The appeal court directed that the notice of the meeting would be settled by the special officer. By another order dated December 20, 1977, the appeal court extended the time to hold the adjourned annual general meeting until March 25, 1978, and directed the filing of fresh nomination by February 15, 1978.

7. On February 14, 1978, pursuant to the directions contained in the order dated 23rd December, 1977, fresh nominations proposing the names of (1) Naresh Chandra Das Gupta, (2) Koushik Kumar Neogi, (3) Sukumar Ray and (4) Sunil Kumar Ray, inter alia, were filed with the special officer at his residence.

8. By an order dated March 14, 1978, the appellate court, on the application of respondent No. 2, directed the postponement of the adjourned annual general meeting of the company due to be held on March 22, 1978, until further orders. On or about March 20, 1978, Nirendra Nath Bagchi, one of the directors of the company, sold 353 equity shares of the company out of his shareholding to Sunil Kumar Ray. After the said sale, Nirendra Nath Bagchi is stated to have held only 119 shares in the company. It should be noted here that the minimum share qualification for being a director of the company was 120 shares. On March 28, 1978, Nirendra Nath Bagchi acquired 3 further equity shares of the company. On or about May 2, 1978, an order was passed by the appellate court whereby the ad interim order passed on March 14, 1978, mentioned hereinabove was made absolute. It was, however, made clear that the said order would not prevent the company from taking appropriate steps for calling the annual general meeting in accordance with law. On May 27, 1978, a meeting of the board of directors of the company was held to appoint the place, date and time of the adjourned annual general meeting for the year 1974-75. Notice for the said meeting was issued by the assistant secretary of the company to which objections were taken by the petitioners in the instant application and respondent No. 2, to the effect that the articles of association did not confer such power on the assistant secretary. Various other objections to the proceedings of the said board meeting and resolutions passed therein were taken. The draft notice convening the annual general meeting was settled and approved at the said meeting. But objections were raised in thesaid meeting in regard to the filing of fresh nomination papers by some directors. On 31st May, 1978, the special officer filed a report in court relating to the aforesaid dispute. On June 7, 1978, the appellate court on the basis of the said report gave directions in regard to the meeting to the following effect, to wit :

' The meeting will be held in accordance with law and whatever other formalities are required, including nominations that will be done in accordance with law irrespective of any earlier direction made. Mr. Das will communicate this order to the parties who have already filed nominations. All parties including the special officer to act on a signed copy of the minutes. '

9. On June 15, 1978, Rabindra Nath Sen Gupta filed two nominations proposing the names of Sukumar Ray and Sunil Kumar Ray with the special officer at his residence. On or about 23rd June, 1978, Kalyan Kumar Neogi issued a notice dated 27th May, 1978, convening an annual general meeting of the company for the year 1974-75 on July 3, 1978, at the registered office of the company. By the said notice, the shareholders of the company were directed to submit their proxies and fresh proxies at the residence of Mr. T. P. Das, the special officer. The said notice intimated that Shri T. P. Das will preside over the meeting pursuant to the order of the court and nominations for the office of directors were to be submitted at the residence of the special officer at 63, Sarat Bose Road, Calcutta. On June 29, 1978, by an order made by Salil K. Roy Chowdhury J. in the company petition filed under Section 155 of the Act (Sunil Kumar Ray v, Debijhora Tea Company Ltd.) it was directed to hold the meeting called to be held on July 3, 1978, for the purpose of adjournment for a period of a fortnight.

10. In pursuance of the said order, the annual general meeting was held on July 3, 1978, for the purpose of adjourning the same until July 17, 1978. On July 14, 1978, by an order passed by Salil K. Roy Chowdhury J., his Lordship directed the rectification of the share register on an application made by Sunil Kumar Ray and others. On the very day at 4 p.m., the matter was mentioned before Salil K. Roy Chowdhury J. in his Lordship's chamber praying for direction to file proxies in regard to the shares directed to be mutated in the share register with the chairman of the meeting. His Lordship was pleased to give such a direction. On July 17, 1978, the petitioners in the instant application and 21 shareholders filed written objections before the special officer about the legality of the said meetings. The objections were with regard to, inter alia, (1) filing of proxies at the residence of Shri T. P. Das, (2) only the business of the meeting which remained unfinished, could be considered at the adjourned meeting, (3) nominations for which notices were given by Bela Devi, Kartick Chandra Acharya and Dilip Kumar Ghosh only could be considered at the said meeting. The said written objections appear as annex. ' F ' to the petition.

11. On July 17, 1978, the adjourned annual general meeting of the company for the year 1974-75 was held and the special officer presided over the said meeting. The petitioners and shareholders who filed objections in regard to the validity and legality of the meeting did not participate in the meeting and walked out. On July 17, 1978, an appeal was filed against the order dated July 14, 1978, passed by Salil K. Roy Chowdhury J. by the transferor of the said shares. The appellate court passed an ad interim order that the resolution passed at the said meeting held on July 17, 1978, would not be given effect to until 21st July, 1978. On July 20, 1978, the application of the transferor appeared as a new motion in the appellate court and direction was given for the filing of affidavits. The appellate court directed the stay already granted to continue until the disposal of the application. On July 31, 1978, the present application has been made in the Appeal No. 107 of 1977, inter alia, for injunction restraining Nirendra Nath Bagchi and Satish Chandra Das Gupta from acting as or holding themselves out as directors of the company, for a declaration that the adjourned annual general meeting of the company for the year 1974-75, held on July 17, 1978, and all proceedings and resolution passed therein to be void and of no effect and injunction restraining appellant No. 2 and the respondents Nos. 1, 4, 6 and 11 from giving any effect to or acting in furtherance of the resolution passed at the annual general meeting of the company for the year 1974-75, held on July 17, 1978.

12. Mr. Sankar Ghosh, learned counsel appearing on behalf of the applicants, challenged the validity of the said annual general meeting on the following grounds :

Nomination for office of the director under Section 257(1) of the Companies Act, 1956, have to be left at the registered office of the company not less than 14 days before the meeting under Article 121(1) of the articles of association of the company read with Section 257(1) of the Companies Act. Company's registered office was at all material times and still is at Gurjorijhora Building, Jalpaiguri. In any event, the premises No. 63, Sarat Bose Road, Calcutta 25, has never been the office of the company. All nominations filed at No. 63, Sarat Bose Road, Calcutta 25, have been filed in violation of Article 121(1) of the articles of association of the company and the provisions of Section 257(1) of the Companies Act. The petitioners and other shareholders, according to Mr. Ghosh, called at the registred office of the company for the purpose of depositing proxies on July 15, 1978, at 10-15 a.m. when the registered office of the company was found to beclosed. A diary to that effect was lodged with the local police station. Thus, Section 176(7) of the Companies Act, 1956, was violated. The nominations of Koushik Kumar Neogi and Naresh Chandra Das Gupta for office of directors were filed at No. 63, Sarat Bose Road, Calcutta 25, in violation of the provision of law and the purported election of Koushik Kumar Neogi and Naresh Chandra Das Gupta as directors of the company is, therefore, null and void.

13. The directions given by the notice dated May 27, 1978, to the effect, that nominations for the office of directors were to he submitted with the special officer at his residence at No. 63, Sarat Bose Road, Calcutta-25, were illegal, invalid and in violation of the articles of association and the provisions of Section 257(1) of the Companies Act, 1956. The said annual general meeting of the company for the year 1974-75 had originally been convened by the board of directors of the company on December 27, 1975, by a notice dated November 28, 1975. In pursuance of the said notice, nominations for the office of directors had been duly filed not less than 14 days before the scheduled date of the annual general meeting at the registered office of the company in favour of Sukumar Ray, Sarajit Kumar Bagchi and Sunil Kumar Ray and notice under Section 257(1A) had also been issued on December 14, 1975, to that effect. The annual general meeting of the company for the year 1974-75, convened on December 27, 1975, was held only for the purpose of adjournment by an order of this court and thereafter was adjourned from time to time by orders of this court. The said adjourned annual general meeting was held on July 17, 1978.

14. Although the appellate court by an order dated December 29, 1977, directed that fresh nominations, if any, were to be filed on February 14, 1978, no such fresh nominations were validly filed in accordance with the provisions of law at the registered office of the company besides the nominations of the above-named three persons. Mr. T.P. Das, as the chairman of the meeting, had not considered the nomination paper filed in favour of Sarajit Kumar Bagchi.

15. The notice dated 23rd June, 1978, was issued by Kalyan Kumar Neogi giving the names of the persons whose names were proposed as candidates for the office of directors of the company along with the names of the proposers. The said notice mentioned that the names of Shri Sukumar Ray, Shri Sunil Kumar Ray, Sri Koushik Kumar Neogi and Naresh Chandra Das Gupta would be proposed by different shareholders for the office of the directors of the said company at the adjourned annual general meeting of the company to be held on 3rd July, 1978, at 10-30 a.m. at the registered office of the company.

16. Mr. T. P. Das in view of the order dated 7th June, 1978, was not competent to preside over the said adjourned annual general meeting held onJuly 17, 1978, in clear breach of the provisions of the Companies Act, as well as the articles of the company under which only the chairman of the board of directors and failing him any director present at the meeting and chosen by the shareholders and failing that any member chosen by the members present would act as chairman of the annual general meeting.

17. Mr. Ghosh further submitted that even if acquiescence was made by the petitioners in the instant application to the proceedings of the meeting or preparation made for the holding of the said meeting including the notice dated 27th May, 1978, the meeting being illegal, the illegality could not be cured by such acquiescence and relied on the observations of the Division Bench of this court in the case of Shalagram Jhajharia v. National Co. Ltd. [1965] 35 Comp Cas 706 (Cal). Mr. Ghosh further relied on the observations of G.K. Mitter J. that where there was illegality there could not be any question of acquiescence or waiver. Mr. Ghosh relied on the case of S. Subramania Aiyar (Watrap) v. United India Life Insurance Co. Ltd., AIR 1928 Mad 1215. Mr. Ghosh submitted that the proxies were filed in accordance with the law before the adjourned meeting was due to be held for the first time, and only those proxies were available at the adjourned meeting and submitted that, in view of the clear direction of the court given on 7th June, 1978, irrespective of any direction of the court, the adjourned meeting should be held in accordance with the provisions of law, Mr. Ghosh pointed out that the proxies filed when the meeting was due to be held for the first time on December 27, 1975, were the only valid proxies and no other proxy could be taken into account at the adjourned meeting. According to Mr. Ghosh, the chairman who purported to act as the chairman of the meeting, has also no authority to do so.

18. Proxies were taken into account which could not be done in accordance with law and nominations were considered which legally could not be considered.

19. For the aforesaid reasons, the purported annual general meeting held on 17th July, 1978, was illegal and void and no resolution passed thereat could be given effect to.

20. Mr. Samaren Sen, the learned counsel appearing on behalf of the respondents, submitted that the application was not maintainable inasmuch as the main relief claimed in the application is a declaration that the meeting was null and void and pointed out prayer (f) at page 34 of the petition. The other reliefs, according to Mr. Sen, claimed in the petition are mere consequential reliefs and injunction cannot be granted as prayed for under Sections 37 and 38 of the Specific Relief Act. Mr, Sen relied on the case Shrimati Abnash Kaur v. Lord Krishna Sugar Mills Ltd. [1974] 44 Comp Cas 390 at 401 (Delhi). Mr. Sen submitted that the original proxies could be considered in terms of Article 98 of the articles of the company. Mr. Senfurther submitted that the articles constituted a contract between shareholders and company and the shareholders and company can, if they so choose, vary the contract. In any event, the court had ample jurisdiction and power to override the statute in regard to the formalities of calling a meeting in this matter wherein all the orders were made by the court under Sections 397, 398 and 402 of the Companies Act. Thus, the court could appoint a special officer under Sections 397 and 398 and give directions regarding the holding of annual general meeting. Such directions might contravene the special provisions of the Act, e.g., Section 186. In the instant case, according to Mr. Sen, direction was given by the trial court and the appellate court that the share register of the company would be in the custody of the special officer. It was also directed that the proxies should be filed at the residence of the special officer. The board of directors of the company on 27th May, 1978, settled the notice of the adjourned annual general meeting prior to the order dated 7th June, 1978, on the basis of the previous orders. The notice specifically provided that (a) proxies were to be filed at the residence of the special officer, (b) fresh nominations were to be filed with the special officer at his residence.

21. Mr. Sen further submitted that by sending the notice dated 27th May, 1978, settled by the special officer and approved by the board of the company, the company and the special officer acted in terms of the directions of the court and in the instant case that must be taken to be legal as directed by the court for convening the annual general meeting. The share register of the company was, in any event, according to Mr. Sen, at the residence of the special officer. Proxies, unless deposited at the residence of the special officer, could not be compared and checked. The present application, according to Mr. Sen, is engineered by Sunil Kumar Ray and his group who applied for rectification of the share register after the order of the appellate court made on 7th June, 1978. At 4 p.m. on July 14, 1978, Mr. Ray's counsel mentioned the matter at the learned trial judge's chamber and obtained direction for filing proxies with the chairman at the meeting and that direction was granted.

22. The petitioners took advantage of the direction and filed proxies at the meeting. Now, they cannot be heard to say that proxies could not be filed with the special officer.

23. The main purpose, according to Mr. Sen, of Section 176 of the Act is that a shareholder should be entitled to have notice along with the notice of the meeting that he was entitled to exercise voting right through proxies. Such notice was given. Mr. Sen relied on [1917] 2 Ch 261 (CA) (McLaren v. Thomson), which was followed in the case S. Subramania Aiyar (Watrap) v. United India Life Insurance Co. Ltd., AIR 1928 Mad 1215.

24. Nominations in favour of 2 persons elected, according to Mr. Sen, were filed pursuant to the order dated December 20, 1977, on February 14, 1978. These nominations could not be governed by order dated 7th June, 1978. In the original notice nominations on behalf of 3 persons were there, viz., Sukumar Ray, Sunil Kumar Ray and Sarajit Kumar Bagchi. For Sukumar and Sunil nominations had again been filed.

25. Mr. Sen submitted that the direction was given by the court for convening the adjourned annual general meeting by a fresh notice and on the basis of such direction notice was settled on 25th of May, 1978. Petitioners were present at the board meeting and pursuant to the said notice and the notes contained therein, Rabin Sen Gupta filed 2 nominations for Sukumar and Sunil with the special officer on 15th of June, 1978. They also, according to Mr, Sen, sought direction from the learned trial judge for filing proxies with the special officer at the meeting. Mr. Sen relied on Article 121 of the articles of association of the company and Catesby v. Burnett [1916] 2 Ch 325 (Ch D). According to Mr. Sen, Mr. T.P. Das, the special officer, presided over the meeting in terms of the order dated 27th May, 1977. When the notice for the adjourned meeting was settled no objection was taken to it which said that the special officer would be presiding over the meeting. The notice dated 27th May, 1978, convening the meeting shows that Mr. Das would preside over the meeting. Pursuant to the said notice the adjourned meeting was held on 3rd July, 1978, under the presidency of Mr. Das. No objection was taken. Mr. Das was empowered to preside over the meeting by the order of the court. So there was no illegality, Ray's group are in a minority. The shareholding of them is 11,000, whereas the shareholding of Neogi's group is about 13,000. Mr. Sen then submitted that in an application under Sections 397, 398 no other provision of the statute should be looked into and relied on Bennet Coleman and Co. v. Union of India [1977] 47 Comp Cas 92 (Bom) and Cosmosteels P. Ltd. v. Jairam Das Gupta [1978] 48 Comp Cas 312 (SC). Lastly, Mr. Sen submitted that, unless personally affected, one cannot complain. None of the petitioners were personally affected and so cannot maintain the application. Mr. Sen relied on Isle of Wight Railway Company v. Tahourdin [1884] 25 Ch D 320 at 330 (CA) and the judgment of A.N. Sen J. in the case of Laxmi Devi Sugar Mill.

26. It should be borne in mind that when a court passes an order under Sections 397, 398 and 402 as has bten done in the instant case there could be no limitation on the court's power while acting under the sections. Instead of the winding up of a company, the court under the abovementioned sections has been vested with ample power to continue the corporate existence of a company by passing such orders as it thinks fit in order to achieve the objective by removing any member or members of a company or to preventthe company's affairs from being conducted in a manner prejudicial to the public interest. The court under Section 398 read with Section 402 of the Act has the power to supplant the entire corporate management. Under the aforesaid sections, the court can give appropriate directions which are contrary to the provisions of the articles of the company or the provisions of the Companies Act.

27. In the instant case, the court directed that the share register of the company would be in the custody of the special officer and also directed that the proxies should be filed at the residence of the special officer. The board of the company under the chairmanship of the special officer settled the notice of the adjourned general meeting at its meeting on 27th of May, 1978. The board decided that the proxies should be filed at the residence of the special officer, fresh nominations were to be filed with the special officer at his residence and as such by sending the said notice dated 27th of May, 1978, settled by the special officer, the company and the special officer were merely complying with the directions of the court for convening the adjourned general meeting. The meeting held on 17th of July, 1978, cannot be said to be illegal, in our view.

28. The adjourned general meeting was held pursuant to the notice dated 27th of May, 1978, on 3rd of July, 1978, and was adjourned to 17th of July, 1978, in accordance with the order dated 29th June, 1978, passed by Salil K. Roy Chowdhury J. The meeting on that day, i.e., on the third of July, 1978, was specifically adjourned till I7th of July, 1978, at the same time and place.

29. In terms of the different orders of the court, Mr. T.P. Das had the power and authority to preside over the said meeting. The petitioners were parties to the notice dated 27th of May, 1978, which specifically stated that the special officer would preside over the meeting and they cannot be allowed to challenge such presiding over by the special officer at the adjourned annual general meeting for the year 1974-75. In fact, the order of the appellate court dated 17th of May, 1977, specifically and unequivocally directed that the special officer would preside over the adjourned annual general meeting for the year 1974-75. Objection was raised at the meeting of the board which was held on 27th of May, 1978, that fresh nomination papers could not be filed in view of the fact that the meeting was going to be held as an adjourned general meeting. No other objection was raised by the petitioners. In fact, when the adjourned general meeting was held on the 3rd of July, 1978, for the purpose of adjournment, the special officer presided over the said meeting. No objection thereto was taken by the petitioners. The order dated 7th of June, 1978, quoted hereinabove was passed in the context of the dispute regarding the filing of fresh nomination papers at the board meeting of27th May 1978. It did not prohibit the special officer from presiding over the adjourned general meeting nor did it set at naught the notice dated 27th of May, 1978, settled by the special officer and approved by the board wherein all the petitioners were present. The notice clearly stated that the nomination had to be filed with the special officer at No. 63, SaratBose Road, Calcutta. The petitioner acted upon the said notice by filing nominations for Sunil Kumar Ray and Sukumar Ray through Rabindra Nath Sen Gupta at the residence of the special officer. To our mind, the order dated 7th of June, 1978, only allowed fresh nominations to be filed notwithstanding any previous order made. Nominations of Kaushik Kumar Neogi and Naresh Chandra Das Gupta appear to have been filed both with the special officer at his residence and also at the registered office of the company and was circulated amongst the members in terms of Section 257(1A) of the Companies Act. Those nominations were, it appears, validly filed. Pursuant to the directions given on the 7th of June, 1978, Rabindra Nath Sen Gupta by letter dated 15th June, 1978, filed two nominations with the special officer in favour of Sukumar Ray and Sunil Kumar Ray. No objection was ever raised regarding the filing of the nominations at the residence of the special officer.

30. Sarajit Kumar Bagchi has withdrawn his candidature by his letter dated 15th of June, 1978, and so his name was not included in the notice dated 23rd of June, 1978, circulated to the shareholders of the company. It should be noted that the names of Sunil Kumar Ray as proposed had already beed circulated by the earlier circular and only the names of those persons whose names were freshly proposed including those of Sunil Kumar Ray and Sukumar Ray were included in the circular dated 23rd of June, 1978. It is apparent from the records that the registered office was not closed as alleged on the date of the meeting and members filed proxies with the special officer at the meeting in terms of the order dated 14th of July, 1978, passed by Salil K. Roy Chowdhury J., at 4 p.m.

31. It should be noted that at the time there was no secretary of the company and the board of directors had all the power and authority to authorise Kalyan Kumar Neogi, the assistant secretary, to issue the notice on behalf of the board. In the premises, the notice dated 27th of May, 1978, is legal and binding upon all concerned. The order dated 7th of June, 1978, as already stated, does not appear to us to have done away with all the previous directions of the court for conducting the adjourned annual general meeting or the filing of the proxies or nominations. It merely extended the time to file nominations for election of the office of directors. Under Sections 397 and 398 read with Section 402 power has been conferred upon the court ' to make such orders ' as it thinks fit. The power conferred upon the court by the above-mentioned sections is very wide and object or objects soughtto be achieved by the exercise of such power have been stated in Sections 397 and 398. As we read Sub-clauses (a) and (g) of Section 402 of the Act we have no doubt in our mind that the intention of the Legislature under the above-mentioned sections was to confer wide and ample powers upon the court for the Regulation of the conducting of a company's affairs and to provide for any other matter which the court thinks just and equitable to provide for in the interest of the corporate body and the general public. Reference in this connection may be made to the case of Bennet Coleman and Company v. Union of India [1977] 47 Comp Cas 92 (Bom).

32. By reason of what has been stated hereinabove, it appears to us that the court had power to make the order in regard to convening and holding of the meeting, filing of proxies or nominations or any other matter for the purpose of conducting the affairs of a company which might be contrary to the provisions of the articles of the company or the Companies Act, by virtue of the provisions of Sections 397 and 398 read with Section 402 of the said Act.

33. For all the reasons stated hereinabove, we are of the opinion that there was no illegality in the matter of filing of the proxies or nominations or the holding of the adjourned annual general meeting for the year 1974-75, on the 17th of July, 1978.

34. For the reasons stated hereinabove, all the contentions of Mr. Ghosh must fail.

35. In the result, we are of the view that there is no merit in this application and the application is dismissed with costs. All interim orders will stand vacated.

A.N. Sen, J.

36. I agree.


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