T R SRIRAM Vs. K M DURAIBABU

JUDGEMENT

(1.) C. M. A. No. 449 of 1993 arises out of the suit in O. S. No. 317 of 1993 filed in the City Civil Court , Madras , on 7. 1. 1993 by one S. Balan, who is carrying on the profession of Advocate and who is a shareholder in the Bank of Madura Limited. The prayer in the plaint is to declare that the election held on 28. 12. 1992 to the Board of Directors for nine vacancies is void and to direct the defendant to hold a special annual meeting at the earliest and conduct election for the vacancies of the Board of directors. Bankof Madura is the only defendant in the suit. We will refer to the grounds on which the election is attacked at a later stage. The plaintiff filed I. A. No. 523 of 1993 for an injunction restraining the Bank from acting upon the election held on 28. 12. 1992 in the annual general meeting for the vacancies of the Directors in item Nos. 3 and 5 to 1 2 in the agenda until further orders. The application was ordered on 2. 2. 1993 by the I Assistant Judge, City Civil Court , Madras. Against the said order, Bank of Madura (hereinafter referred to as the bank )preferred C. M. A. No. 9 of 1993 in the Court of the Principal Judge, City Civil court, Madras and applied for an interim stay of the order of the trial court.

(2.) ON 13. 1. 1993 another shareholder by name Duraibabu filed a suit on the Original Side of this Court which was numbered as C. S. No. 71 of 1993 for declaration that the election held at the 49th Annual General meeting of the Bank for all nine vacancies of Directorship is null and void, to direct defendants 3 to 9 to vacate the Office of Directorship in the Bank and for an injunction restraining them from exercising their functions besides a direction to the Bank to hold a fresh general meeting for election of directors. An application was filed for an injunction which was numbered as c. A. No. 42 of 1993 restraining the Directors from functioning as such. The application was dismissed on 5. 2. 1993 by a learned single Judge of this Court. Against the said order, another shareholder who was not a party to the suit filed an appeal and prayed for leave to file appeal. ON 17. 2. 1993, a Division bench of this Court granted leave to file appeal and also ordered status quo as regards the functioning of the elected Directors of the Bank. Against the said order, the Bank preferred a special leave petition before the Supreme Court of india. ON 19. 2. 1993, the Supreme Court granted interim stay of the order of the division Bench of this Court. ON 5. 3. 1993 the Supreme Court passed an order directing this Court to deal with the transfer petitions filed in this Court for transferring the suits filed in the City Civil Court , Madras and dispose of the same before 17. 3. 1993.

(3.) LEARNED counsel for the Bank draws our attention to sec. 195 of the Companies Act. Under that section, there is a presumption until the contrary is proved that the general meeting is duly called and held and all proceedings threat to have duly taken place, and in particular, all appointments of directors or liquidators made at the meeting are valid if the minutes of the proceedings of the general meeting have, been kept in accordance with the provisions of Sec. 193. Relying on the said section, learned counsel draws our attention to Ex. R-4 which is the minutes of the 49th Annual General meeting. It is recorded in the minutes as follows: ' Shri. S. Kathiresen, Company Secretary, informed the members that the management was not aware of collection of proxies by any one before the date of despatch of notices. The printed proxy forms in conformity with the Companies Act were circulated to the shareholders only with the Annual Report and notice for the Annual General Meeting. All proxies lodged with the Bank were dated. He further pointed out that all the proxies were verified and certified in writing by Shri T. K. Sriram, Director, jats Electronics and Shri Murugappa Murugappan and Shri M. K. Bashyam on 26th and 27th December, 1992 that all proxies verified and found in order. Based on these he concluded that no provision in the Companies Act had been vitiated. The members expressed their satisfaction over the reply .