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Aidqua Holding (Mauritius) Inc. vs Tamil Nadu Water Investmant Company ... on 28 September, 2007
cites
Article 2 in Constitution of India [Constitution]
Article 190 in Constitution of India [Constitution]
Il And Fs Trust Co. Ltd. vs Birla Perucchini Ltd. on 10 October, 2002
1.6 The Company proposed to take insurance policy, by which it would be purchasing the indemnity/insurance for wrongful acts done by-the officers and directors of the Company. The insurance policy will cover former, present and future members of the board of directors and the management for wrongful acts in their official capacity, which shall include misuse of corporate funds, Companies Act violations, customer suits, financial loss to corporation, action by creditors etc. This will encourage nominee directors
of the petitioners, being majority shareholders, officers and employees to commit such wrongful acts. Any approval for such policy will adversely affect the proper functioning of the Company. However, every director, officer or servant of the Company is already indemnified by the Company under Clause 320 of the articles and there is no need for any additional liability insurance cover. The Company would become liable to pay premium for such insurance policy. Thus, any resolution in regard to the insurance policy falls within the scope of AIDQUA Reserved Matter, attracting Clause 197(h) of the articles. Nevertheless, the board of directors, in disregard of the articles accorded its consent for obtaining directors' and officers' liability insurance cover for the Company to an extent of Rs. 5 crore. The applicant does not get any return on its investment of Rs. 90 crore in the Company and the applicant should have some control over the accounts and financial policy of the Company by requiring their affirmative vote in financial matters as held in IL & FS Trust Co. Limited v. Birla Perucction Limited (2004) Vol. 121 CC 335. The above two issues considered at the board meeting are essentially related to the management and affairs of the Company and any resolution on the same will cause prejudice to the interest of the Company and the applicant, more so when they are contrary to the articles and totally illegal. The Bench may suspend the implementation of the resolutions in respect of the AIDQUA Reserved Matters passed at the board meeting held on 27.07.2007 at Tirupur. The petitioners are endeavouring to remove all the restrictions contained in the articles, which are prejudicial to the applicant and cannot be allowed, especially when the said article protects the applicant's interest.
Bhavnagar University vs Palitana Sugar Mill Pvt. Ltd. & Ors on 3 December, 2002
Any rights, as laid down by the Supreme Court in Bhavnagar University v. Palitana Sugar Mills Private Limited (supra) "cannot be taken away by implication from the language employed in a statute unless the legislature clearly and distinctily authorise the doing of a thing which is physically inconsistent with the continuance of an existing right". Applying the cardinal principles of interpretation of a statute, I am to follow the literal rule of interpretation, when a rule is clear as well as unambiguous. Where the language is clear, the intention of the articles has to be gathered from the language used therein and must be understood in the ordinary sense and construed according to their grammatical meaning. Against the above settled proposition of law, the issues in question are being examined.