Bombay High Court
Balwant Singh Sethi vs Sardar Zorawarsingh Hushnak Singh ... on 27 July, 1987
Equivalent citations: [1988]63COMPCAS310(BOM)
JUDGMENT Tated, J.
1. Respondent No. 1 filed Short Cause Suit No. 6738 of 1987, in the Bombay City Civil Court, Bombay, against respondent No. 2 and the appellant for a declaration that the requisition contained in the letter dated July 27, 1987, being exhibit A-1, is not a valid and lawful requisition for calling an extraordinary general body meeting and as such it is not capable of being acted upon and that the appellant-defendant No.2 either for himself or on behalf of the requisionists is not entitled to convene a meeting of respondent No.2, defendant No. 1, in pursuance of the said requisition dated July 27, 1987. Respondent No. 1 also sought a permanent injunction restraining the appellant-defendant No. 2 and other requisitionists from convening the extraordinary general body meeting. He took out a notice of motion for an injunction restraining defendant No. 2 from holding the meeting pending the decision of the suit. The trial court, after allowing the parties to file their affidavits in support and in rebuttal, by its order dated September 17, 1987, granted an interim injunction in terms of prayer (a) of the notice of motion. Feeling aggrieved, defendant No. 2 preferred this appeal and also filed civil application for stay of the order passed by the trial court pending the hearing of this appeal.
2. Appellant-defendant No.2 has not filed either a certified copy or even an ordinary copy of the judgment and order of the trial court. Learned counsel for the appellant submitted before me that though the appellant applied for a certified copy, he has not received it. According to him, the oral judgment and order passed by the learned trial judge is yet to be transcribed by the stenographer and as such even an ordinary copy of the same could not be produced. He submits that the matter being of very vital importance to the appellant, as the learned trial judge by the judgment and order under appeal prohibited the appellant form holding the extraordinary general body meeting convened for September 21, 1987, at 3.30 p.m., I should hear him and after hearing him, if I am not satisfied that the judgment and order passed by the learned trial judge is prima facie wrong and there is a case for staying the interim injunction order, the appeal and the civil application both may be rejected, as no purpose is likely to be served by keeping the appeal pending when the appellant cannot hold the meeting convened on September 21, 1987. Counsel for the respondents-plaintiff and defendant No.1 also agree that the matter may be heard.
3. I have heard learned counsel for the appellant-defendant No.2 at length. He has covered all the points that were raised by respondent No.1- plaintiff for not holding the extraordinary general body meeting. I may briefly indicate the points dealt with by learned counsel before me. He submitted that the plaintiff objected to the convening of the meeting on the following grounds :
(1) One of the persons who has signed the requisition for the meeting is not a member of respondent No. 2-defendant No. 1- association.
(2) There was no explanatory note required note required under section 173 of the Companies Act, 1956 (hereinafter referred to as "the Act"), and as such the requisition was invalid.
(3) The venue of the meeting was deliberately fixed at a far off place in Santa Cruz, Greater Bombay, so that most of the members who are having their business in the Opera House area may not be able to attend the meeting.
(4) Subject No.3 in the requisition regarding constitution of an ad hoc committee was not as per the Act or the bye-laws of respondent No.2-defendant No.1-association.
(5) The notice for requisitioning the meeting was signed by only one of the requisitionists.
(6) It was not made clear in the notice whether voting could be by proxy.
(7) Some of the notices have been posted on August 31, 1987, and some on September 1, 1987, and, therefore, some of the members of respondent No. 2-defendant No.1-association could not have clear notice of 21 days.
4. Learned counsel for the appellant-defendant No.2 submitted that in case I was not with him on the last point, I may not deal with the other points involved in the matter, though he argued all the points. I am not with learned counsel for the appellant that there has been clear 21 days' notice as provided in the bye-laws of respondent No. 2-defendant No. 1-association. The respondents-plaintiff and defendant No. 1 have produced before me some of the envelopes containing notices received by 16 members of defendant No.1-association. On those envelopes, there are postal date stamps of August 31, and September 1, 1987. Learned counsel referred to section 53(2)(a) and (b)(i) of the Act. It reads thus :
"53. (2) Where a document is sent by post,-
(a) service thereof shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document, provided that where a member has intimated to the company in advance that documents should be sent to him under a certificate of posting or by registered post with or without acknowledgment due and has deposited with the company a sum sufficient to defray the expenses of doing so, service of the document shall not be deemed to be effected unless it is sent in the manner intimated by the member; and
(b) such service shall be deemed to have been effected -
(i) in the case of a notice of meeting, at the expiration of fortyeight hours after the letter containing the same is posted".
5. The notices posted on August 31, 1987, and September 1, 1987, will have to be deemed to have been received as per the provisions contained in section 53(2)(b)(i) of the Act after 48 hours from the day of posting, that is, on 2nd and 3rd respectively of September, 1987. As the meeting is to be held on September 21, 1987, the notices posted on August 31, 1987, and September 1, 1987, cannot be held to be 21 days' clear notice to the members of defendant No. 1-association. Learned counsel for the appellant contends that the appellant had delivered the notices by hand on August 27, 1987, and by way of abundant caution, he sent the notices also by post under certificates of posting on August 29, 1987. The total membership of defendant No. 1-association is 484. He produced before me the posting certificates in respect of 42 letters and they have been as per the certificates of posting posted on August 20, 1987. He has not produced before me the certificates of posting in respect of other members of defendant No. 1-association. Learned counsel for the respondent-plaintiff and defendant No. 1-association produced before me packets addressed and posted to the members of defendant No. 1-association by the appellant-defendant No.2. Twelve packets bear the postal date stamp of August 31, and four bear the postal date stamp of September 1, 1987. After giving the margin of 48 hours as per the provisions of section 53(2)(b)(i) of the Act, they must be deemed to have been received by the members on September 2, and 3, 1987. Therefore, it is clear that those members have not received 21 days' clear notice of the extraordinary general body meeting to be held on September 21, 1987. The appellant has not obtained any acknowledgment for hand delivery of the notices, and, therefore, it is difficult to accepts that all the members of defendant No.1-association were given notices by hand delivery by defendant No. .2. Some of the notices which have been produced by counsel for the respondent- plaintiff and defendant No. 1 clearly indicate that they have not been posted on August 29/30, 1987, so as to reach the addresses with a clear margin of 21 days.
6. In the result, I find that the appellant-defendant No.2 has not made out a prima facie case so as to interfere with the impugned order of the learned trial judge.
7. In the circumstances set out above, the appeal and the civil application are dismissed.