Madras High Court
N.V.R. Nagappa Chettiar And Anr. vs The Madras Race Club By Its Secretary, ... on 5 October, 1948
Equivalent citations: AIR1951MAD831A, AIR 1951 MADRAS 831(2)
JUDGMENT
1. This appeal arises out of an action by the members of the Madras Race Club. The action was tried on the original side by Bell J. & by his judgment he dismissed the suit of the pltfs. Hence this appeal by the pltfs.
2. The Madras Race Club is a body corporate registered under the Indian Companies Act of 1913 before it was amended in 1936. The object of the Club, as its name indicates, is to carry on the business of a race club & to provide certain amenities to its members. The memorandum of Assocn. & the Articles of Assocn. are contained in Ex. P. 29. The Memorandum of Asscn. prohibits the division of profits by way. of dividend amongst the members, & they have to be utilised only for the purpose of the club. There are two classes of members, namely, club members & stand members. There are about 260 club members, & they alone are entitled to vote, while the stand members have certain other privileges, but not the right to vote. The management of the business of the Club is vested in six stewards who must be club members. They occupy the position of the directors of a Co. & discharge similar functions in respect of the Club. The Articles provide as usual for the qualification for Stewards, for their retirement by rotation, & filling up of vacancies, & also their powers & duties. After every annual general meeting of the Club the senior Steward is elected at the first meeting of the Stewards, who is to preside at every meeting of the Stewards. The quorum for a meeting of the Stewards is fixed at three. They are charged with the duty of calling for a general meeting annually & also, on the requisition of a prescribed number of members, calling for an extra-ordinary general meeting for special business. Article 50 prescribes the period of notice & the manner of issuing the notice for a general meeting. The senior Steward also presides as chairman at a general meeting. Article 73 lays down the manner of serving notices on members. After the Companies Amending Act of 1936 was passed the Articles of this Club were also amended in 1941, & Ex. P. 29 contains the articles which were in force in 1947.
3. Sometime in April 1947, 45 members of the club sent a requisition to the Club for convening an extraordinary general meeting, 'inter alia', to appoint a committee to consider the revn. of the Articles of Assocn. & to suggest changes wherever necessary (Ex. P. 1). In pursuance of this an extra-ordinary general meeting was duly held on 21-6-1947, & in that meeting a special committee of seven members besides the Stewards, who were 'ex-officio' members thereof was constituted for the specific purpose of the revn. of the Articles of Assocn. & the suggestion of changes. They were required to submit a report on that behalf by the end of September 1947, & it was also decided that a meeting of the general body should be called for not later than 31-10-1947 for the consideration of the report. The special committee had several sittings, & in the meeting of 13-9-1947 they proposed several alterations to the Articles, the most important of which were that the management of the business of the Club should vest in a Managing Committee of 12 members instead of the Stewards, & that from among the members of the Managing Committee a senior Steward & five other Stewards should be elected, who should be solely responsible for the racing. They also recommended the abolition of the proxy system of voting. Under a license granted by the Central Government under Section 26 (2), Companies Act, 1913, the club was permitted to be registered as a company with a limited liability without the addition of the word "Limited" to its name. The Provincial Govt. on whom the duty of issuing licenses subsequently devolved framed regulations under the said section governing the issue of licenses (Vide Development Dept. Notfn., Fort, St. George, 6-3-1937, G.O. No. 549). Under Clause 8 of this Notfn.:
"If the Memorandum & Articles of Assocn. are altered without the previous approval of the Govt. having been obtained in that behalf, the license granted by the Govt. shall be deemed to have become void."
In view of this requirement the special committee directed the. solicitors of the Club to draft the necessary resolutions in proper form altering the Articles of Assocn. in the manner suggested, & at a subsequent meeting of 26-9-1947 in which some more alterations were suggested, the club's solicitors were also requested to further revise the draft & send it to the Govt. for approval. The Solicitors sent the revised draft to the Govt. on 29-9-1947. (Ex. P. 5). On 11-10-1947 the Govt. approved the revised Articles of Assocn. proposed by the Club but with one modification relating to Article 69. The Govt. also pointed cut that the revised Articles of Assocn. should be adopted by passing a special resolution under Section 81 (2) of the Indian Companies Act. Section 20 of the Indian Companies Act also requires a special resolution to alter or to add to the existing Articles. On 15-10-1947 the special committee at its meeting considered the order of the Govt. & resolved that an extra-ordinary general meeting of the members be convened on 7-11-1947 at 6-30 p.m. to consider the report & pass a special resolution & requested the Solicitor, Mr. Small to draft the resolutions. The Committee was adjourned to meet again at 5 p.m. on 7-11-1947 (P. 1). At this meeting of the special committee were present nine members of whom one was the senior Steward Mr. Annamalai Chetti, & two Stewards. On the 16th of October notice was issued to the Club members of the extraordinary general meeting on 7-11-1947 at 6,30 p.m. The contents of this notice (P. 8) are material for the decision of this case, & therefore it is necessary to set them out in extenso:
"Notice is hereby given that an Extra-ordinary General Meeting of Club members of the Madras Race Club will be held at the Members' Stand of the Club at Gundy, on Friday, 7-11-1947 at 6.30 O' clock in the evening for the following purposes:
1. To receive the report of the Chairman of the Special Committee constituted to revise the Articles of Assocn. of the Club & to suggest developments of the Club's present amenities;
2. To consider &, if thought fit, to pass as a Special Resolution 'That the Articles in the printed document submitted to the Meeting, & for the purpose of identification subscribed by the Chairman thereof, be approved with or without modification, & adopted as the Articles of Assocn, of the Club in substitution for & to the exclusion of all the existing Articles of Assocn. thereof;
3. If the said Special Resolution be duly passed then to elect twelve Club Members as the first Managing Committee of the Club, to hold office until the Annual General Meeting of Club Members to be held in November 1948; &
4. To consider the Special Committee's following proposals for development of the Club's amenities & to give directions to the Managing Committee thereon:
(a) That the present Lunch Room be furnished suitably to serve as a Lounge for Club members;
(b) That the northern corner of the verandah adjoining the Lunch room be equipped to serve as a Card room for Club members;
(c) That the present Billiards room be reserved for use only by Club members when a separate Recreation room can be provided for Trainers & Jockeys; &
(d) That arrangement be made to serve Refreshments also.
N.B. (1) A print of the proposed amended Articles of Assocn. will follow shortly.
2. Each Nomination of a Club member as a candidate for election to the Managing Committee should be signed by two Club members & sent to the Secretary fourteen clear days before the date of meeting."
This notice, it is common ground, was posted at Guindy on the 16th October. About the same time notice of the annual general meeting of the Club fixed to 18-11-1947 was also issued to the members. The extraordinary general meeting was also advertised in the Hindu of 18-10-1947 (Ex. P. 10) and the Madras Mail of even date (Ex. P. 11). in pursuance of the notice Ex. P. 8, the Club received 24 nominations for the membership of the Managing Committee which was communicated to the members by notice dated 27-10-1947 (Ex. P. 12). By 29-10-1947 the Club received notice of amendments to the Articles of Assocn. from Messrs. T.T. Krishnamachari, G. Narasimham, A.R. Srinivasan & the Rajah of Vizianagaram, & these were notified to the members by a notice of 29-10-1947 (Ex. P. 13). On the 21-10-1947 (it is admitted, before us by both sides, though there is no evidence regarding it) the Club Bent the printed draft of the proposed amendments to the Articles of Assocn., Ex. P. 30, to all the members. On 5-11-1947 the Govt. of Madras suggested that the Articles of Assocn. might be suit ably amended to eliminate voting by proxy & to delete Arts. 55, 56 & 57 altogether with a view to make the members of the Race Club take full responsibility for the proper conduct of racing. In the light of this suggestion the Govt. wanted a fresh draft on those lines, or alternatively that the existing Articles suitably altered & approved by the general body be submitted to them through the Registrar of Joint Stock Companies, Madras, for approval before "it is finalised". At 5 p.m. on 7-11-1947 the special committee met & considered the proposal of the Govt. They passed at that meeting two resolutions:
"1. Resolved that the letter be placed before the General Body meeting to be held at 6-30 p.m. with the recommendation that the suggestion of the Govt. be accepted; &
2. Resolved also that this Committee recommends that the spirit of the letter of the Govt. of Madras be observed by refraining from using proxies at today's meeting & subsequent meeting as well as the Annual General Body meeting."
These resolutions were passed, one member Mr. Annamalai Chettiar dissenting. The extraordinary general body meeting was held on the 7-11-1947 at 6.30 p.m. which was presided over by Mr. P. Natesan as the senior steward, Mr. Annamalai Chettiar expressing his unwillingness to take the chair. What exactly happened at that meeting is a matter of serious controversy between the parties, & the fate of this case mostly depends upon our decision on this point. What purported to be the proceedings of the meeting of the 7th November were communicated by the Club to the members, & the pltfs. filed the communication received by them, which is marked as Ex. p. 18. The solicitors of the Club by their letter of 10-11-1947 communicated to the Registrar of Joint Stock Companies the proposed revised Articles which, it was alleged, were adopted at the meeting of the 7th November. The Registrar of Joint Stock Companies through ft telephonic message of 14-11-1947 asked the solicitors whether the revised set of Articles was adopted by a special resolution at the meeting of the 7th, & that if so, a copy of the resolution & a copy of the notice convening the meeting should be sent to him for reference. It was also pointed out by the Registrar that if the Articles were adopted by a special resolution, prior sanction of the Govt. ought to have been obtained & the Govt. might have to be addressed to condone the omission. To this the solicitors replied by their letter of 15-11-1947 pointing out that there was no such necessity. The general meeting was held on the 18th at which some formal business was transacted, & the members were informed that there was no necessity to elect the stewards as at the first meeting of the Managing Committee held on 10-11-1947. Mr. P. Natesan was elected Chairman & five persons were elected as Stewards. Mr. Annamalai Chettiar wrote to the Registrar of Joint Stock Companies on the 18th (Ex. P. 20) that the proposed special resolution had not been put to the meeting at all by the Chairman, Mr. Natesan, on 7-11-1947 & that it had not been passed by the requisite statutory majority. The present pltfs. issued through their lawyers a notice to the Club questioning the legality of the meeting of the 7th November & of the election of the members of the Managing Committee & on that date on the grounds elaborately specified in that notice including the fundamental objection that the special resolution was not moved or put before the meeting & was not voted upon. The notice demanded the Managing Committee to accept the invalidity of the proceedings of the meeting of 7th November failing which it was intimated a suit would be instituted for appropriate reliefs. The reply of the Club is Ex. P. 23 dated 25-11-1947 & was sent through their solicitors, in this the allegations in the notice, Ex. p. 21 were denied.
3. This was followed by the present suit which was filed on 8-12-1947 by two members of the Club for themselves & on behalf of the other members of the Club other than those who were originally impleaded as defts. in the suit after obtaining the necessary permission under Order 1, Rule 8, Civil P. C. Deft. 1 is the Race Club. Defts. 2 to 13 are members of the Club who were elected as members of the Managing Committee. The suit was originally filed impleading only defts. 1 to 13. Defts. 14 to 90 who are some of the other members of the Club were impleaded as parties at their own request, as they wanted publicly to dissociate themselves from the pltfs.
4. The main reliefs claimed in the plaint were: (1) a declaration that the meeting of the general body of the members of the Club held on 7-11-1947 was invalid & void & that all business transacted, thereat was invalid null & void; (2) a declaration that the Managing Committee comprising defts. 2 to 13 purported to have been elected at the said meeting was not lawfully or validly elected & were not entitled to assume office; (3) a declaration that the proposed amended Articles have not been duly passed & are ineffective; (4) a declaration that the Stewards who were in office prior to 7-11-1947 still continue to be in office ft are the persons legally & lawfully entitled to be in management & control of the Club, & (5) a declaration that the proceedings of the general meeting of 18-11-1947 are illegal, invalid & void. There is also a relief for an injunction against defts. 2 to 13.
5. The grounds on which the reliefs claimed In the plaint were sought to be sustained before us may be catalogued as follows: (1) The meeting of 7-11-1947 was not convened by the proper authority under the Articles, viz., the Stewards. (2) The notice of the meeting, Ex. P. 8, which was posted on 16-10-1947 contravened the provision of Section 81 (2), Companies Act as 21 days were not allowed between the date of the meeting & the receipt of the notice. (3) The notice of the meeting did not contain the necessary particulars as it did not comply with the requirement that the general nature of the business should be indicated in it, the proposed amended Articles of Assocn. not having been sent along with the notice so as to give notice thereof of 21 clear days. (4) Item No. 2 in the agenda, the special resolution relating to the proposed amendment of the Articles was not moved or put before the meeting for being voted upon. (5) In any event even if the voting of 66 members at that meeting was in support of the special resolution, that did not constitute the statutory three-fourths majority of the members present, who numbered according to the pltfs. 105. (6) The amendments moved were not within the scope & ambit of the original resolution & could not have been validly made. (7) The election of the 12 members of the Managing Committee was illegal as the notice regarding it was insufficient a regards the time & was also defective as the members were not informed of the qualifications & the functions of the Managing Committee before they were called upon to submit nominations. (8) The election of the entire. Managing Committee was illegal, or in any event that of Mr. Natesan was clearly illegal as he was disqualified to pre-
side at the meeting, being himself a candidate for election to the Managing Committee. (9) If the meeting of 7-11-1947 was void, the annual general meeting of 18-11-1947, was equally void, as proxies were illegally excluded.
6. These charges are of course denied by defts. 2 to 8, 10, 12 & 13. In para 5 of the written statement filed on behalf of deft. 1, deft. 1 stated with reference to the allegations in para 6 of the plaint that although 105 members signed the attendance sheet during the period of the meeting & 49 proxies were registered only 66 members were actually present at the time when the resolution to adopt the new articles was put to vote. The other defts. 2 to 8, 10 & 12 & 13 filed a separate written statement practically adopting the written statement filed on behalf of deft. 1. Deft. 9 seems to have signed the written statement of defts. 2 to 8, 10, 12 & 13 but without looking into the written statement filed on behalf of deft. 1. Mr. Vijayaraghavan, deft. 9 wanted to see the written statement of deft. 1 before their written statement was actually filed into Ct. For this purpose he wrote to his solicitors on 10-1-1948 communicating his intention to see the. written statement of deft. 1 before the written statement bearing his signature was actually put into Ct. To this the reply of the solicitors dated 12-1-1947 was that their written statement was filed in Ct. on that day as Mr. Small was otherwise engaged that morning & that it was too late to withhold the filing of their written statement. Mr. Vijayaraghavan was informed that the written statement signed by him merely adopted the written statement filed on behalf of the Club. On 15-1-1948 Mr. Vijayaraghavan by his letter protested against this action of the solicitors & pointed out that para 5 of deft. 1's written statement was highly misleading & even incorrect. According to him, when the resolution was put to vote at the meeting 66 persons voted for, one member said he was neutral & about 30 to 35 other members did not vote either way. He pointed out that the statement in para 5 of the written statement of the Club that only 67 members were present at that time was not true & that therefore he could not subscribe to it. After this protest when the written statement of defts. 2 to 8, 10 12 & 13 was returned the solicitors scored out his name. Mr. Vijayaraghavan filed a separate written statement engaging another counsel. Mr. Vijayaraghavan in his written statement denied the allegations in para 5 of the written statement, reaffirmed the facts as stated in his letters & left other questions to be decided by the Ct. Annamalai Chettiar also filed a separate written statement setting out his contention.
7. The learned Judge who tried the suit held that, though there were some irregularities at the meeting & though he was not prepared to accept in their entirety the contentions put forward by the Club relating to "waiver", "estoppel" & the like, the pltfs. had failed to substantiate their contention on the material issues. He was of opinion that there was no illegality in the proceedings of the meeting of 7th November and that the special resolution was validly passed at that meeting. He characterised the action as a case of "a storm in a tea cup" & dismissed the pltf's suit.
8. At the outset it is necessary to consider the question whether the suit as framed is maintainable. The action was brought by two pltfs. who are the members of the Club for themselves & also on behalf of the other members after obtaining the requisite leave under Order 1, Rule 8, Civil P. C. The learned Judge was of opinion that the suit was incompetent, as what is known as the rule in 'Foss v. Horbottle', (1843) 2 Hare 461: (67 ER 189) applied to the case. The rule in 'Foss v. Horbottle', (1843) 2 Hare 461: (67 E R 189) is that a Ct. will not interfere with the ordinary management of a Co. acting within its powers & has no jurisdiction to do so at the instance of the share-holders. A share-holder is entitled to institute a suit to enforce his individual rights against, the Co. such as his right to vote, or his right to stand as a director of a Co. at an election. If the share-holder however intends to obtain redress In respect of a wrong done to the Co. or to recover monies as damages alleged to be due to the Co., the action should ordinarily be brought by the Co. itself. In order therefore to enable a share-holder to institute a suit in the name of the Co. in such a case, there must be the sanction of the majority for corporate action. In ordinary cases, therefore, this principle implies the supremacy of the will of the majority. It is open to a majority always to set right a thing which was done by the majority either illegally or irregularly, if the thing complained of was one which the majority of the Co. were entitled to do legally & was within the powers of the Co. by calling a fresh meeting. That is the reason why in such cases the Ct. refuses to interfere at the instance of a share-holder even in a representative action brought by him. If the majority however acts in an oppressive manner, it is not as if the minority are without a remedy. This possibility was foreseen by Sir James Wigram, Vice-chancellor who delivered the judgment in Toss v. Harbottle', (1843) 2 Hare 461: (67 E R 189). At p. 492 the Vice-Chancellor says:
"If a case should arise of injury to a corpn. by some of its members, for which no adequate remedy remained, except that of a suit by individual corporators in their private characters, & asking in such character the protection of those rights to which in their corporate character they were entitled, I cannot but think that the principle so forcibly laid down by Lord Cottenham in 'Wallworth v. Holt', (1841) 4 Myl & Cr. 619: (41 ER 238) & other cases would apply, & the claims of justice would be found superior to any difficulties arising out of technical rules respecting the mode in which corpns. are required to sue."
In such a case where action by a share-holder is permitted, the pltfs. would not have a larger right to relief than if the Co. Itself were the pltf. & are not entitled to complain of acts which are valid, if done with the consent of the majority of the share-holders or are capable of ratification by the majority.
9. The later decisions however have recognised exceptions to what is conveniently known as the rule in 'Foss v. Harbottle', (1843) 2 Hare 461: (67 ER 189). James L. J. in 'Mac Dougall v. Gardiner', (1875) 1 Ch. D. 13: (45 LJ Ch 27) considered the rule & stated the exceptions in the following passages at p. 21 which has since become classic:
"I think it is of the utmost importance in all these companies that the rule which is well known in this Ct. as the rules in 'Mozley v. Alston', (1847) 1 Ph 790 : (61 L J Ch 217); & 'Lord v. Copper Miners' Co.', (1898) 2 Ph 740: (2 De G & S 308) & 'Foss v. Harbottle', (1843) 2 Hare 461: (67 ER 189) should be always adhered to; that is to say, that nothing connected with internal disputes between the share-holders is to be made the subject of a bill by some one share-holder on behalf of himself & others, unless there be something illegal, oppressive, or fraudulent--unless there is something 'ultra vires' on the part of the Co. 'qua Co.' or on the part of the majority of the Co., so that they are not fit persons to determine It; but that every litigation must be in the name of the Co., if the Co. really desire it."
From this it follows that a share-holder or shareholders are entitled to bring an action (1) in respect of matters which are 'ultra vires' the Co. & which the majority of share-holders were incapable of sanctioning; (see 'Burland v. Earle', 1902 AC S3: (71 LJPC 1); (2) where the act 'complained of constitutes a fraud on the minority, & (3) where the action of the majority is illegal. The decisions in 'Baillie v. Oriental Telephone & Electric Co., Ltd.', 1915-1 Ch 503: (84 L J Ch 409) & 'Cotter v. National Union of Seamen', 1929-2 Ch 58: (98 L J Ch 323) recognised a fourth exception where a special resolution was required by the Articles of the Co. & Co. obtained the assent of the majority to such special resolution by a trick, or even where a Co., authorised to do a particular thing only by a special resolution, does it without a special resolution duly passed, as in such a case to deny a right of suit to the shareholders without using the name of the Co. would in effect result, the Co. doing the thing by an ordinary resolution. In other words, this means that where a special resolution was improperly passed, if the rule that the Co. alone is the proper pltf. to institute a suit questioning such resolution were to be enforced, the share-holders by a bare majority could defeat & prevent the majority from using the name of the Co. The result of such a course would be indirectly to uphold the validity of a special resolution which was otherwise invalid. To avoid this result this exception was recognised in the two decisions. The rule & the exceptions thereto are also stated in Palmer's Company Law, Edn. 17 at pp. 236 & 237 & Halsbury's Laws of England (Edn. 2) Vol. 5, p. 445, para 728. The applts' learned advocate placed before us the authorities bearing on the rule & the exceptions, & the resps' learned advocate did not challenge the position contended for by the applt. It is needless to consider the authorities in detail as the substance of the decisions is as stated above.
10. The attempt of the learned advocate for the applts. is to bring the present case under two exceptions, namely, that the acts complained of are illegal acts, & secondly that if the special resolution was not passed or was passed illegally the effect of applying the rule in 'Foss v. Harbottle', (1843) 2 Hare 461: (67 ER 189) to this case would be indirectly to sanction by an ordinary resolution that which the law requires to be passed only by a special resolution. For reasons given below, in our judgment the present suit falls within these two exceptions & that it is maintainable.
11. It will be convenient to deal first with the objection that the special resolution, item 2 in the agenda, was not put to the meeting & was not passed, for, this question goes to the root of the matter. If we find that no special resolution was passed at the meeting of 7-11-1947 the whole proceedings of that meeting fall to the ground. Section 20, Companies Act requires a special resolution to alter the articles. If there was no special resolution sanctioning the alteration, the action of the Club in altering the Articles without authority would be void & the alterations would have no legal effect. It is unfortunate that in this case notwithstanding the presence of the solicitor of the club, Mr. Small, at the proceedings of the meeting & notwithstanding the fact that the chairman of the meeting & the share-holders were men of status in life, there is no authentic record of the proceedings of the meeting. This has made our task more difficult. According to the pltfs., one & only one resolution was put before the meeting on that day, that is, resolution No. 1 of the special committee in Ex. P. 16, & that it was this resolution that was passed by 66 voting for, & one remaining neutral out of the members present. The pltfs. categorically asserted in the plaint that the special resolution (items in the agenda) was not put to the meeting & was not passed. This of course was denied by the defts. According to the version of the defts. the special resolution alone was put to the meeting, & it was in respect of that, that the counting of the votes took place & it was carried by 66 votes, one remaining neutral. According to both versions it would be clear from the evidence that there was only one counting of the votes at which it was found that 66 were in favour of the resolution, whether it was the resolution of the special committee that was put to the meeting or the special resolution itself. As regards the number of persons present at that sole count, there is also conflicting evidence.
12. Three documents have been marked in the case as containing a record of the proceedings of the meeting of the 7th November. Ex. P. 17 is the report of the shorthand reporters present at the meeting & who took down the notes. Exs. P. 17 (a), P. 17 (b) and P. 17 (c) are the notes in shorthand taken by them. They submitted to the club a typewritten report in longhand, which is Ex. P. 17. Ex. P. 18 is a copy purporting to be the minutes of the meeting sent to the pltfs. by the club, & Ex. D. 5 produced by the defts. is stated to be the record or the notes prepared by the chairman, Mr. Natesan, at the time of the meeting. Mr. Small, who is the solicitor for the defts., was not able to say whether the club had or had not maintained a minutes book of its meetings kept in the regular course. In the course of the arguments before us, the learned advocate for the resps., Mr. Nambiar, on a question put by us represented that there was a leather bound book in which the minutes of the meeting were regularly recorded & produced it before us; but as it was not produced or filed before the learned trial Judge, & as there was no request on behalf of the resps. to admit it in evidence in appeal before us it was not received & marked as an exhibit. (Their Lordships discussed the admissibility of Exs. D. 5 & P. 18 & held that they are inadmissible, & proceeded:)
13. Ex. P. 17 however stands on a different footing. The pltfs. insisted on the defts. producing the report of the short-hand writers who were engaged by the club & paid out of its funds. After some hesitation the defts. produced Ex. P. 17, & curiously they themselves took objection to its admissibility. The learned Judge, we are told, gave a ruling that as it is an official record maintained by the club it is not open to the defts. to object to its admissibility. The ruling however does not appear on record; but the learned advocates appearing for the applts. & the resps. have admitted before us that there was such a ruling by the learned Judge. We must therefore proceed on the footing that the learned Judge ruled that Ex. P. 17 is admissible in evidence, especially as it is a record of the proceedings emanating from the defts. themselves. Mr. Small in his evidence tried to impeach its accuracy in so far as it did not refer to the special resolution, but in other respects he admitted its accuracy. To what extent this Ex. p. 17 helps the pltfs' case will be considered in due course. There is no reason to reject Ex. P. 17 & exclude it from evidence.
14. We are therefore left with Ex. P. 17 & the oral evidence adduced by the parties on this question. It may be mentioned that it is common ground that at that meeting there was confusion is that there was a heated debate on the question whether voting by proxies should or should not be abolished. The meeting went on from 6-30 p.m. beyond 10 p.m. The pltfs. examined three witnesses on their side to prove that only the resolution of the committee was put to the meeting & was carried & also to prove that the members present at the time of voting were more than 67. (Their Lordships then discussed the evidence that P. W. 1 stated in chief-examination that the resolution of the special committee was to put to vote & carried by 66 votes for & one remaining neutral & in cross-examination he states that item V of the Agenda was not moved & that he did not remember whether the special resolution was moved by the chairman & that P. Ws. 2 & 3 have not spoken anything about the special resolution in the cross-examination & therefore the defts. did not ask the said two witnesses about it in cross-examination & then proceeded:) It is urged that this omission was due to the fact that the pltfs. themselves did not put the negative to the two witnesses, P. Ws. 2 & 3, in the chief examination. The burden of proving that a special resolution was passed at the meeting in the circumstances of this case when it was vehemently denied by the pltfs. was certainly on the defts. Of course if there had been a record of the minutes of the meeting as contemplated by Section 83, Companies Act that would have helped the defts. & would have shifted the burden on to the pltfs. to show that what was recorded was not true & accurate. In the absence of such record the burden lies heavily on the defts. to prove beyond doubt that the special resolution was moved at the meeting & carried by the required majority. In our opinion, the defts. did not dare to put the question to these witnesses, as they were not sure of their ground. This is the only natural inference possible in the circumstances of the case.
15. The evidence of P. Ws. 1 to 3 is in consonance with the proceedings as reported in Ex. P. 17. (Their Lordships then set out the notes made in Ex. P. 17 & proceeded:) Ex. P. 17 therefore strongly probabilises the case of the pltfs. that the special resolution was never put to the meeting.
16. The only evidence in support of the case of the defts. is the evidence of Mr. Small. (Their Lordships then discussed the evidence of Mr. Small & then proceeded:)
17. The position therefore is, on two very important matters Mr. Small's evidence is unconvincing & inaccurate. He himself admitted that there was confusion at the meeting & the meeting lasted from 6.30 p.m. till 10 O'clock or thereafter & that members were going at intervals to the refreshment stall. It is doubtful whether even though he was present at the meeting throughout he observed correctly what transpired as admittedly there was confusion at the material time. There is no authentic record to evidence the passing of the special resolution by the general body. We are therefore unable to conclude from the evidence of Mr. Small alone that item 2 in the agenda, the spe-declared carried by 66 voting in favour of the resolution.
18. All that the learned trial Judge says on this part of the case is that even though there was a lot of discussion & possibly some confusion at the meeting he was not prepared to believe that the members who met on that day for the purpose of bringing into being a new set of Articles forgot the main object for which they had met & that the meeting ended without anything having been effected. While no doubt this reasoning is not without force in ordinary circumstances, it must be remembered that circumstances were not really ordinary. The communication from Govt. received just before the meeting created a somewhat intriguing situation for the club members. The Govt.
not only went back upon their previous approval of the new set of Articles recognising the use of proxies & recommended the abolition of the proxy system, but suggested two alternative courses of action for the meeting, to pursue, one of which certainly envisaged the non-adoption of any set of new Articles at that meeting & the other somewhat ambiguously recommended only an ascertainment of the members' view with a view to the new Articles being finalised (whatever it may mean). It is not surprising that there was not a little misapprehension at the meeting itself as to what exactly was the agenda to be considered. The chairman had crystallised the matter by moving a formal resolution that the first recommendation of the special committee be adopted. We cannot accept the view that this resolution was not disposed of but was, as it were left, in the air. Even Mr. Small admits in his evidence that just at the material time there was some confusion & a misapprehension in the minds of some members as to what was being considered & dealt with. In the circumstances the argument that the meeting would not have dispersed without transacting the main business for which it was convened loses much of its force. The learned Judge also expressed the opinion that the meeting might have been conducted more efficiently. The finding of the learned Judge rests on a mere possibility & not on an examination of the evidence adduced in the case. Of course if the learned trial Judge had based his findings on oral evidence of witnesses whom he had an opportunity to observe In the witness box & of whose credibility he formed an estimate, it would have been difficult for us to differ from his conclusion. We therefore hold agreeing with the contention of the pltfs. that the special resolution was not put to the meeting & was not passed.
19. If the special resolution was, in fact, put to the meeting & was passed by 66 voting for, we have no doubt on the evidence adduced even by the pltfs. that there were no more than about 10 or 20 members who did not take part in the voting & therefore the 66 would constitute the required majority for declaring the resolution carried. In view of the finding that the special resolution was not passed, the amendment of the Articles & the consequent election of the members of the Managing Committee are wholly void.
20. This really disposes of the suit in favour of the pltfs. In this view it may not be necessary to consider the other objections to the meeting. However we will deal with the other objections also, as in our opinion, some of them are well-founded.
21. We now proceed to consider them in the order in which they were enumerated earlier. The first of the objections is that the meeting was not convened by the proper authority. The Stewards constitute the authority under the Articles (Article 49) to call for an extraordinary general meeting as well as the annual general meetings. The quorum for the meeting of Stewards is fixed at three. The notice, Ex. P. 8, was signed by the Secretary. It is common ground that there was no separate meeting of the Stewards in which they decided that an extraordinary general meeting should be convened on the 7th November. No minutes of any such meeting have been placed on record. Of the six Stewards Mr. Lawrence died sometime ago. Mr. Chidambaram Chettiar was out of India & according to Mr. Small, Mr. Hume was at the time of the notice in Ceylon, though he had no personal knowledge of it. Mr. Hume was present on the 7th both at the special committee meeting & also at the extraordinary general meeting. It may be assumed that Mr. Hume also was not available at the time Ex. P. 8 was issued. The notice, Ex. P. 3 did not indicate the authority under which the meeting was called. The extraordinary general meeting decided on 21-6-1947 (Ex. P. 2) that after the report of the special committee then constituted for revising the Articles was submitted, a meeting of the general body should be called for not later than 31-10-1947 for the consideration of the report. This authority would not avail, because the time fixed had expired, & the meeting was subsequently convened only on 7-11-1947. The defts. relied on Ex. P. 7 which contains a resolution of the special committee passed on 15-10-1947 that an extraordinary general body meeting should be convened on 7-11-1947. This meeting of the special committee was attended by 9 members of whom there were stewards who were 'ex officio' members of the special committee. As three of the Stewards who constituted the quorum for a meeting of the stewards & who were the only persons available in India at that time took part in the special committee meeting, it is urged on behalf of the defts. that the resolution of that meeting may be deemed to be a resolution of the Stewards & therefore justified the calling of the meeting. Alternatively, it is also contended that in any event this is at the most an irregularity & not an illegality which justifies the setting aside of the resolution. If a general meeting is convened by the Secretary without proper authority it is not valid. See 'Haycraft Gold Reduction & Mining Co., In re', 1900-2 Ch 230: (69 L J Ch 497), & 'In re State of Wyoming syndicate', (1901) 2 Ch D 431. Where the directors however met & decided to convene a general meeting but the meeting of the directors itself was not properly convened, it was held in 'Browne v. La Trinidad', (1887) 37 Ch D 1, that by reason of the irregularity of the board meeting the general meeting was not incapacitated from acting. In the case in 'Harben v. Phillips', (1882) 23 Ch D 14: (48 L T 334), a Board meeting of the directors was held which decided to convene an extraordinary general meeting. At the board meeting the pltfs. who were the directors were refused admittance to the meeting by the Secretary under the direction of persons in possession of the board room. The pltf. protested & withdrew. The persons in possession of the board room purporting to act as a board adjourned their meeting to the next day to a different place, the office of their solicitor, & on the requisition presented to the meeting on the next day which was attended by three of the defts. appointed a special committee to convene an extraordinary general meeting. At the meeting of the board there was unquestionably a person who took part in the meeting & who was not a director. It was held that the meetings of the Board of Directors on the two days were unlawful & that everything that was done at those meetings was invalid. The consequence was that the appointment of the special committee & the notice convening the meeting were also invalid. It was pointed out in answer to an argument that there was a quorum of the directors & therefore the meeting was lawful that it was not enough that there was a quorum as the lawfully constituted directors were prevented from attending the meeting. The convening of the meeting, according to this decision, was not a mere ministerial act. The directors have to exercise their discretion & have to fix the time within which & the place at which the meeting should be held, & whether a meeting should at all be held. In the light of these decisions it is difficult to say that there was a valid meeting of the stewards. There is no doubt some force in the argument of the resps. that the proceedings of the special committee in which three of the Stewards who were available in India were present may be deemed to be a valid meeting of the Stewards. The objection of the pltfs. is technical. The mere presence of the other members of the special committee at that meeting may not vitiate the resolution to which the Stewards were a party. We do not however think it necessary to express any final opinion on this question ,
22. The next question for consideration is whether the notice, Ex. P. 8, posted on 16-10-1947 complied with the requirement of Section 81, Sub-clause (2), Companies Act that there should be a notice of "Not less than 21 days". There were 260 club members of whom 23 were living outside British India. 51 members who were absent members & 59 members lived at places which could be served through post after more than a day had elapsed from the date of posting. 127 members were within one day's reach from the date of posting. The notice of the meeting therefore posted on the 16th at Guindy could have been received by less than half the members only on the 17th. More than a day was required at least in respect of 59 members. Excluding therefore the date of service of notice & the date of the meeting there was only an interval of 20 days in respect of 127 members & a still less interval in the case of others. Section 81 (2), Companies Act, provides:
"A resolution shall be a special resolution when it has been passed by such a majority as is required for the passing of an extraordinary resolution & at a general meeting of which not less than twenty one days' notice specifying the intention to propose the resolution as a special resolution has been duly given.
Provided that, if all the members entitled to attend & vote at any such meeting so agree, a resolution may be proposed & passed as a special resolution at a meeting of which less than twenty one days' notice has been given." It is obligatory to serve notice of the meeting of a Co. with a statement of the business to be transacted at the meeting on every member in the manner laid down for service of notice under the articles. Article 49 of Table A, Companies Act which is the same as Article 50 of the Arts, of the club lays down:
"Subject to the provisions of Sub-section(2) of Section 81, Companies Act, 1913, relating to special resolutions, fourteen days' notice at the least (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which notice is given) specifying the place, the day & the hour of meeting &, in case of special business the general nature of that business, shall be given in manner hereinafter mentioned, or in such other manner, if any, as may be prescribed by the Co. in a general meeting to such persons as are, under the Indian Companies Act, 1913, or the regulations of the Co., entitled to receive such notices from the Co.; but the accidental omission to give notice to or the non-receipt of notice by any member shall not invalidate the proceedings at any general meeting."
The manner of serving notices is provided by Article 112 of Table A which is the same as Article 73 of Ex. P. 29. It states:
"112 (1). A notice may be given by the Co. to any member either personally or by sending it by post to him to his registered address or (if he has no registered address in British India) to the address, if any within British India supplied by him to the Co. for the giving of notices to him.
2. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying & posting a letter containing the notice &, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post."
23. It is admitted on behalf of the resps. that if regard be had to the expression "not less than twenty one days" occurring in Section 81 (2) there should be an interval of 21 clear days & indeed this position could not be disputed as it was established by decisions where similar expressions occurring in the Companies Act & also other statutes were considered. See 'In re Ry. Sleepers Supply Co.', (1885) 29 Ch D 204: (54 L J Ch 720) & 'Rex v. Turner', (1910) 1 K B 346: (79 L J K B 176). The argument however that was pressed on behalf of the resps. was that the sections should be construed in the light of Article 49 of Table A which includes the date of the meeting in cases where only 14 days notice is required. It was also argued that it was permissible to relief to the Articles for the purpose of ascertaining the intention of the legislature in the body of the Act. In support of this contention the decisions in 'In re Barnad's Banking Co., Ex parte the Contract Corporation', (1868) 3 Ch A 105 at p. 113 : (37 L J Ch 81); 'Lock v. Queensland Investment & Land Mortgage Co.', (1896) AC 461: (65 L J Ch 798) & 'Halsbury's Laws of England', Vol. 5, Edn. 2, p. 292, para 504 were referred to. There can be no dispute that the principle of construction, contended for, on behalf of the resps' advocate is correct, As Article 49 is expressly made subject to the provisions of Sub-section (2) of Section 81 it cannot be inferred that in construing that Sub-section the Legislature intended to include the date of the meeting within the period of 21 days. It cannot be assumed that because that date was included in other cases the legislature intended to include it also in case of special resolutions covered by Sub-section (2) of Section 81. The very fact that a specific reference is made in Article 49 to include the date of the meeting within 14 days in cases in which a notice of 14 days is required is a clear indication that it was not intended to apply to cases of meetings which require 21 days notice. Under the corresponding provisions of the English Companies Act of 1929 the Ct. of Chancery had to consider a similar question. Sub-section (2) of Section 117 of the English Act corresponds to Sub-section (2) of 8. 81 of the Indian Act, & Article 42 of the English Act corresponds to our Article 49. In the case reported in 'In re Hector Whaling Ltd.', (1936) 1 Ch D 208: (105 L J Ch 117) a notice convening an extra-ordinary general meeting of the Co. on 30-5-1935 was dated 8-5-1935 & was posted on that day. By virtue of the Articles of Assocn. of that Co. the notice is deemed to have been served on the following day, that is, 9-5-1935. Excluding the date of the meeting it would be noticed that in that case the interval was only 20 days. Article 138 of the Co. in question stated:
"Any notice or other document if served by post shall be deemed to have been served on the day following that on which the letter containing the same is put into the post, & in proving such service it shall be sufficient to prove that the letter containing the notice or document was properly addressed & put into the post office as a prepaid letter or prepaid registered letter as the case may be."
On the authority of the decisions in 'Rex v. Turner', (1010) 1 K B 346 : (79 L J K B 176); & 'Chambers v. Smith', (1843) 12 M & W 2: (13 L J E X 25), Bennett J. held that the expression "not less than twenty one days' notice" contained in Sub-section (2) of Section 117 meant 21 clear days exclusive of the day of service & exclusive also of the day on which the meeting was to be held. It was also pointed out that it was not open by the Articles of Assocn. to curtail the length of time which the statute had fixed. No doubt in that decision specific reference was not made to the language of Article 42, & the contention now advanced was not raised & considered. It cannot however be assumed that the counsel who argued the case & the learned Judge who decided it were not aware of the language of Article 42. In view of the clear language of the article, the point does not admit of any doubt, & perhaps that was the reason why the contention was not raised as of no substance.
24. It was next argued that in any event we should count 21 days from the date of posting, & that if that was done, there was an interval of clear 21 days even if the date of the meeting was excluded. The argument, in our opinion, is opposed to the clear language Of Article 112. The Article states that unless the contrary is proved the notice must be deemed to nave been effected at the time at which the letter would be delivered in the ordinary course of post, & this would be the 17th in the case of at least half the number of the members. This extraordinary contention is not supported by any decisions. Form No. VIII in which a special resolution has to be communicated to the Registrar of Joint Stock Companies was relied on. In the form one of the columns is "date of despatch of notice specifying the intention to propose the resolution as a special resolution or extraordinary resolution". We do not think that it is permissible to rely on the language of the form to interpret the section & the article. The date of the meeting & the date of service of notice are therefore to be excluded, & in between, the dates there should be an interval of 21 days. The notice issued to all the members therefore was inadequate & did not comply with the statutory requirement & is therefore illegal. The meeting therefore was not legally convened.
25. The next branch of argument on behalf of the resps. in this part of the case was that as none of the members including the pltfs. who though absent appointed proxies on their behalf, objected at the time of the meeting, it must therefore be deemed that the members present either in person or by proxy had waived the objection. This plea was not specifically raised in the written statement nor in the issues. All that was said in para. 3 of the written statement was that the pltfs. had received the notice of the meeting in due time & raised no objection to the validity of the notice at any time at or about the meeting though they were present by proxy at the meeting. Issue 2 raises in a general form the question whether the pltfs. were entitled to question the validity of the notice of the meeting or the proceedings of the meetings at the general body of 7-11-1947 as stated in para. 3 of the written statement. As the facts have been pleaded in the written statement, though the point was not specifically raised in the form of waiver, we thought that the resps. should be allowed to argue the question. The resps. wanted also to raise a point based on the proviso to Sub-section (2) of Section 81; but as it was nowhere raised we refused to grant them permission to raise & argue it for the first time in appeal. In 31 Halsbury, Edn. 2, at p. 559 it is stated that, "a statutory right which is granted as a privilege may be waived either altogether or in a particular case."
If the pltfs. had waived their right to question the legality of the notice, it is urged that they are precluded from maintaining the suit not only on their behalf but also on behalf of other members. Strong reliance was placed on the decision. in 'Burt v. British National Life Assurance Assocn.', (1859) 4 De G & J 158: (124 R R 201) where it was held that a pltf. who has a right to complain of an act done to a numerous society of which he is a member, is entitled to sue on behalf of himself & all others similarly interested, though no other may wish to sue, so although there are a hundred who wish & are entitled to sue, still, if they sue by a pltf. who is personally precluded from suing, the suit cannot proceed, although other persons on whose behalf the suit was instituted might maintain the action as pit's. The question therefore resolves itself into this, namely, whether in view of the imperative provision regarding the notice in Section 81 (2) it is open to the pltfs. to waive their right to object to an illegality, the right being certainly not their personal right but a right belonging to them in their corporate character. The proviso t$ Section 117 (2) of the English Act was added for the first time in 1929 in view of the decision in Oxford Motor Co., In re', (1921) 3 KB 32: (90 L J K B 1145), which decided that it was competent for the shareholders of the Co. acting together to waive the formalities required by Section 69 of the Companies (Consolidation) Act, 1908 as to notice of intention to propose a resolution as an extraordinary resolution. In that case all the shareholders met & passed a resolution without objection & it was held that the want of notice could be waived. The Indian Companies Amending Act of 1936 introduced a similar proviso in Section 81 (2). Under this proviso it would be seen that the requirement as to 21 days' notice may be dispensed with by an agreement of all the members 'entitled to attend & vote' & not merely of all the members 'entitled to vote & present in person or proxy at the meeting. It requires therefore an agreement of all the members of the Club in order to dispense with the requirement of 21 days' notice. The proviso in other words indicates the intention on the part of the Legislature that the provision in Sub-section (2) is mandatory & that it can be dispensed with only by the agreement of all the members. It is not enough that the members present at the meeting indicated either expressly or impliedly they consented to or acquiesced in shortening the period of notice. An express consent of all the members to waive the notice has not been established in this case. Even if the members present agreed to waive the defect in the notice the meeting would not be a valid meeting. The pltfs. therefore are not precluded from raising the contention that the notice contravened the provision of Sub-section (2) of Section 81.
26. The next objection is that the notice was insufficient, in that it did not give full particulars of the nature of the business. Under the Articles the notice should indicate the general nature of the business intended to be transacted at the meeting. The draft proposed amendments to the Articles of Assocn. did not accompany the notice & were in fact posted only on the 21st October, & therefore must have been received on the 22nd. On this question there is no evidence on record, but it was agreed before us by the learned Advocates appearing for the applts. & the resps. that the printed draft was posted on the 21st of October. It is therefore urged that the notice did not indicate the general nature of the business. We are not prepared however to agree with this contention, it was on the initiative of the general body that a special committee was appointed to consider the amendments, if any, to the Articles of Assocn. The notice clearly stated that a print of the proposed amended Articles of Assocn. will follow shortly. From the 22nd to 7th of November the members had ample time to consider the proposed amended articles. We do not think that the notice was insufficient & therefore bad on this ground. No useful purpose would be served by referring to the decisions to which our attention was drawn, as the decision of that question would invariably rest on the facts of each case.
27. In Palmer's Company Precedents, Part I, at p. 1002 it is pointed out that, "Where a large number of alternations have to be made, it is generally more convenient to adopt a new set of articles altogether. Where this course is adopted, a copy of the new regulations should lie for inspection at the office, & the notice convening the meetings should state the fact; & in some cases it may be deemed expedient to send printed copies of the proposed new articles with the notices. According to the decision of Kekewich J. in 'Normandy v. Ind. Coope & Co.', (1908) 1 Ch 84: (77 L J Ch 82), the notice should call attention to any material alterations'; & in 'Baillie v. Oriental Telephone & Electrtic Co.', (1915) 1 Ch 503: (84 L J Ch 409), the Ct. of Appeal held that a notice of a proposed resolution to alter articles involving a large increase in the remuneration of the directors was invalid on the ground that the proposed increase was not fully & frankly disclosed. .........
The notice should state that a copy of the new articles is enclosed, or that a copy of the proposed new articles may be seen at the Co's office."
In this case in the notice it was stated that the, proposed articles would be sent shortly, & they had been posted within six days from the date of posting of the notice. In the light of the principles stated, above we think that there is substantial compliance with this requirement of law & that the notice was not bad on this ground.
28. Nor is there any force in the objection that the amendments moved relating to the proxies were not within the scope & ambit of the original resolution. Notice of the amendments was given in Ex. P. 13 by Mr. T.T. Krishnamachari & others, & the Govt. later pointed out that it would be advisable in the interests of racing that proxies should be abolished to make the members take active interest in racing. The amendments proposed by Mr. Eswara Aiyar cannot be said to be outside the scope of the original resolution.
29. The next objection relates to the election of 12 members of the Managing Committee. If our view that the special resolution was not at all moved & the amendments were not passed by a special resolution is correct, the meeting had no authority to elect 12 members to the Managing Committee. As the old Articles continued to be in force. Apart from this, we think that the election was illegal, as the notice was not sufficient in the circumstances of the case. Ex. P. S was posted on the 16th October, & it required nominations for election to the Managing Committee to be submitted to the Secretary 14 clear days before the date of the meeting. That means, the nominations should be posted by a member either on the 21st October or on the 22nd to reach the Secretary. The members were not made aware of the functions & the duties of the Managing committee, & in fact they did not receive the proposed alterations earlier than the 22nd taking the view most favourable to the defts. It is impossible for the members to make up their mind with no data before them & to submit nominations. Practically they had no valid notice of the election & the election was rushed through at the meeting of the 7th. The election is also invalid on the further ground that Mr. Natesan presided at the meeting. He was himself a candidate for the Managing Committee. There were 24 nominations & 19 actually contested the election. Objection was raised at the meeting that the new rule came into existence only on that day & that nominations were proposed 14 days before the passing of the rule. The chairman had to give a ruling on the question, & he decided in favour of the validity of the nominations including his own. The chairman's ruling may be correct or may be incorrect. Perhaps in view of the decision in 'Pacific Coast Coal Mines Ltd. v. Arbuthnot', 1917 A C 607: (AIR (4) 1917 P C 52), a notice for election of the members of. the Managing committee may retrospectively be validated by passing a special resolution, but that is not the question. Here is an instance where the chairman was in the position of a quasi-judicial officer, & he had to be a judge in his own cause. There was clearly a conflict between his duty & his interest. In the normal course he should have vacated the chair & requested another member who was not a candidate to take it, & this was not done. That a person cannot be a judge in his own cause is an elementary rule, & if an authority is wanted it is to be found in 'Reg v. Owens', (1858) 28 L J Q B 3iS at p. 318: (7 W R 566). In 'Panagan v. Kernan', (1881) 8 C P 44 at pp. 48 & 49, it is stated:
"There is no more sacred maxim for our law than that no man shall be a judge in his own cause, & such force has that maxim that interest constitutes a legal incapacity to a person being a judge in every case......It is impossible for a Ct.
of Law to allow him to exercise the function of presiding at that election of which he could influence the result."
No man can preside at his own election & return himself. See 'The Queen v. White', (1867) 2 Q B 557 at p. 581: (36 L J Q B 267). These principles are well established, & it is unnecessary to deal with them elaborately. In fact, the resps' advocate does not dispute the propositions, but contends that those principles apply to meetings other than the meetings of a Co. Under the Articles provision is made for the appointment of a chairman, & he continues to preside at the meeting whether the meeting is one for transacting ordinary business or passing a special resolution or for the election of members to the board, & the mere fact that the chairman is also a candidate for a committee or a board of management will not vitiate the proceedings. So ran the argument. No authority in support of this distinction was placed before us, & we do not see any reason for making a distinction between meeting of Co. & other meetings. The principles above referred to are elementary & are of universal application. We therefore hold that the election of the 12 members of the Managing Committee was illegal, even apart from the question whether the special resolution was put to the meeting & passed or not.
30. We therefore hold that the special resolution "item 2 in the agenda" was not passed, that the meeting of the 7th November was not legal & that the members of the Managing Committee were not duly elected. Prom this it follows that the proceedings of the general meeting of 18-11-1947 are void, &, in any event, the exclusion of proxies at that meeting was not warranted by the articles, then in force. Differing therefore from the learned trial Judge we hold that the pltfs. are entitled to the reliefs asked for.
31. The appeal is therefore allowed & the decree dismissing the suit is set aside. There will be a decree in favour of the pltfs. as prayed for. The pltfs. are entitled to the costs of this appeal & the costs of the suit, payable by deft. 1. Having regard to the trouble involved & the time taken we fix under Rule 12 of Order VI, High Court Pees Rules, a fee of Rs. 2,500/- for the pltfs' advocates in the appeal & Rs. 2,500/- for them in the suit.