In Re: Malhati Tea Syndicate Ltd.

Banerjee, J.—This is an application under sec. 79(3) of the Indian Companies Act for an order of the Court that a meeting of the Company be called, held and conducted in such manner as the Court I thinks fit. The petitioners who are two of the shareholders of the company allege that it is impracticable to call a meeting of the any in the manner in which meetings of that company may be called or to conduct the meeting of the Company in the manner prescribed by the articles of the company or the Companies Act.

The facts are shortly these. Debesh, Birendra, Tejesh and Bhakta, all brothers and the majority shareholders have quarrelled. As a result of the quarrel, several suits have been filed in this Court as also in The Jalpaiguri Court. One of the questions raised relates to the validity of the appointment of some of the directors; for example, in Suit No. 220 O. C. of 1949 filed in the Court of the Munsif at Jalpaiguri, Akhil Bandhu Sarkar and Tejesh Chandra Ghose as plaintiffs claim a declaration that they were duly elected directors at the general meeting of the company held on 26th September, 1949, and that defendant Bhakta is not a director. There is no dispute that on that date the directors were Debesh, Birendra and one Jacques. On 22nd October, Jacques resigned and his resignation n accepted.

The managing agent of the company was a firm of the name of Chose and Sons consisting of two partners, the abovenamed Birendra and Debesh. There is no dispute that the managing agency firm has been dissolved. A suit for dissolution of the firm and accounts has been filed in the Jalpaiguri Court (52 of 1949) and another suit for the same purpose in this Court. It is contended on behalf of the petitioners that it is necessary for properly carrying on the business of the company that a meeting should be called under direction of the court to pass certain resolutions.

There is no doubt that a meeting is nearly. It appears from a printed copy of a notice, dated 19th April, 1950, that Birendra as ''Director-member. Managing Committee, Malhati Tea Syndicate Ltd., Jalpaiguri'''', gave notice to the shareholders that an extraordinary general meeting of the company would ''be held in pursuance of a resolution signed by certain shareholders-

(1) To consider the situation arising out of the dissolution of the firm of Messrs. Ghose & Sons, the Managing Agents of the company, and the consequent vacation of office of the Managing Agents and to consider the situation arising out of litigation between rival claimants for the office of directors and to pass necessary re-solutions for the proper management of the business of the company.

(2) To appoint Managing Agents of The company under Art. 122 of the Articles of Association and to fix their remuneration and their term of office.

(3) To increase the number of directors from 5 to 9.

(4) To elect and]Or appoint one or more directors as may be found necessary and expedient.

(5) To consider and decide where the registered office of the company should be maintained or located.

That is the notice of Birendra himself. It does not lie in the mouth of Birendra who is opposing this application to say that there is no necessity of a meeting being called.

The question is whether the Court should hold that in the circumstances that have happened it is impracticable to call a meeting in the manner in which meetings of that company may be called.

In The Commissioner, Lucknow Division v. The Deputy Commissioner of Pratabgarh (1) (41 C. W. N. 1072), their Lord-ships of the Judicial Committee said that the word "impracticable" meant impracticable from a reasonable point of view. The Court takes a commonsense view of the matter and acts as a prudent person of business.

It is admitted in this case that the anaging agent cannot convene a meeting in terms of Arts. 59 to 62 of the Articles of the company, because there is no managing agent. The firm is dissolved; the partners have fallen out.

Mr. R, Chaudhuri in opposition, however, argues that the directors can call a meeting and relies on articles 94 and 95 which define the powers of the directors which. among others, is to do all acts, matters and things which the managing agents are by the Articles of the company for the time being particularly authorised (to do. Mr. Chaudhuri''s contention is that there is a Board of Directors which can call a meeting in like manner as the Managing Agent, if it existed, could do. He refers to Art, 194 and contends, reading, under the interpretation clause, the word "directors" in Art. 104 for "director that Birendra was the director for the time being in Jalpaiguri, so a requisition signed by Birendra was valid and effectual for calling a Directors'' meeting; such a meeting was called and at that met; one Satish Chandra Lahiri has been co-opted as a director, two directors of this company form a quorum; so there is a board which can call a shareholder''s meeting. Accordingly it is not impracticable to call a meeting. There is dispute as to whether Satish was co-opted on the date alleged. Mr. Chaudhuri offered to produce the minute book to satisfy me that the co-option took place on that date. I would have given Mr, Chaudhuri time to produce the minute book, but having regard to the other facts of the case, it is not necessary to do so. It is clear that if Akhil and Tejesh were also directors of the company as they claim to be, then Birendra was not the "Director for the time being at Jalpaiguri" within the meaning of Art. 104. There the requisition in writing signed by him for a meeting for the purpose of co-opting a director was insufficient. Lahiri was not validly co-opted.

It is difficult for me on this application and it would be inexpedient having regard to the pending suits, to decide which of the directors have been validly appointed. I am not satisfied on the facts of this case that there is a board of directors who can call a meeting in the manner in which a meeting of the company may be called. Meetings held otherwise than under direction of the Court under sec. 79 in the circumstances of this case, would lead to (interminable troubles and prejudice the interests of the company.

Mr. Chaudhuri contended that the Court should not interfere with the internal management of the company by directing a meeting to be called, and referred me to Modougall v. Gardiner (10 C A 606) in which at page 609, Mellish, L. J., said that the Court had no power to take the management of the company out of ''the hands of the directors, at any rate, whilst the question was still in litigation, whether they were properly directors Or not.

In this case, if I had taken the view that there was a Board of Directors who could call a meeting, I would not have made the order under sec. 79(3). But as I have said Akhil and Tejesh claim to be directors and they are at Jalpaiguri. If they have been validly appointed, then Birendra cannot act alone under Art. 104. So Lahiri''s co-option is bad and there is no board who can call a meeting. This is a view of the matter which I cannot ignore.

There is no dispute among the parties that a meeting has to be called. The question is whether it should lie a meeting under sec. 79(3) of the Indian Companies Act or otherwise.

In the circumstances of this case, and on the considerations aforesaid. I think-that it is expedient to make an order under sec. 79(3) for calling a meeting of the company.

His Lordship then gave certain directions regarding the appointment of Chairman, service of notices on shareholders, for lodgment of proxies and the resolution; to be considered at the meeting. His Lordship also directed that the register of members shall remain closed for a period of fortnight before the date of the meeting and that no meeting of the directors or of the company ''be held in, the meantime.