KARNAL DISTILLERY CO. LTD. Vs. L.P. JASWAL
LAWS(P&H)-1950-8-11
HIGH COURT OF PUNJAB AND HARYANA
Decided on August 17,1950

Karnal Distillery Co. Ltd. Appellant
VERSUS
L.P. Jaswal Respondents

JUDGEMENT

Harnam Singh, J. - (1.) TO appreciate the point arising in this case the facts must be set out in some detail.
(2.) ON 18 -12 -1946, Mr. Ladli Parshad Jaiswal instituted Civil Suit No. 374 of 1946 for declaration to the effect that the meeting and the proceedings of the Board of Directors of the Karnal Distillery Co. Ltd. Karnal held on 3 -3 -1946, and the extraordinary general meeting held on 28 -3 -1946, and all meetings of directors held after 28 -3 -1946, were ultra vires, illegal, ineffective and a fraud an the company and that the unanimous resolutions of the extraordinary general meeting dated 16 -10 -1945, continue to be in force and for a permanent injunction restraining the Defendants from acting upon or carrying into effect the resolutions passed in the meeting of the Board of Directors held on 3 -3 -1946, in the extraordinary general meeting held on 28 -3 -1946, and in other meetings of the Board of Directors held after 28 -3 -1948. In that suit the trial Court fixed the following issues: (1) Whether the resolutions mentioned in para. 6 of the plaint and passed at the extraordinary general meeting dated 16 -10 -1945, are ineffective as having been passed under coercion or undue influence? (2) Whether the resolutions mentioned in issue 1 are invalid either because they amount to veto or result in creating a deadlock or being in contravention of the statutory provisions of the Companies Act? (3) If issues 1 and 2 are not proved or proved respecting some of the resolutions, does the non -compliance with such resolutions amount to a more irregularity and what is its effect on the subsequent impugned meetings? (4) Whether a notice for the impugned meeting of 3 -3 -1946, was necessary under the Articles of Association? (5) If issue 4 is proved, what is the effect of noncompliance on that meeting? (6) If issues 1 or 2 are proved and issue 4 is not proved, was the meeting of 3 -3 -1946, illegal or ultra vires? (7) Did not the Plaintiff receive a notice of the meeting of 28 -3 -1946? (8) If issue 7 is decided against the Plaintiff, was the notice sent in proper form and what is its effect? (9) If issue 7 is decided in Plaintiff's favour, was the meeting of 28 -3 -1946 valid for any reason? (10) If the meeting dated 3 -3 -1946 is found to be illegal or ultra vires, is the meeting dated 28 -3 -1940, valid and binding? (11) Do the resolutions passed at tho meeting dated 28 -3 -1946, amount to fraud on the minority members or are otherwise (for reasons given in the plaint) illegal or ultra vires? (12) Does the matter agitated in the plaint relate to the internal management of the company and what is its effect? (13) Whether the relief of injunction in effect amounts to reinstatement of the Plaintiff as Chairman and director of the company ? If so, is the Plaintiff entitled to injunction to that extent? (14) Whether the Plaintiff is entitled to injunction as prayed for? (15) Are the Defendants entitled to special costs under Section 35A, Code of Civil Procedure , and how much? (16) Relief? On 28 -3 -1947, the Karnal Distillery Co. Ltd. Karnal, instituted a civil Suit No. 99 of 1947 for the recovery of Rs. 44,070 -13 -0 from Mr. Ladli Parshad and from M/s. L.P. Jaiswal and Co., Karnal. Mr. L.P. Jaiswal is the sole proprietor of Defendant 2.
(3.) IN Civil Suit No. 99 of 1947, the trial Court fixed the following preliminary issues: (1) Whether the description of the Plaintiff as given in the plaint is correct? (2) Whether the description of the Defendant as given in the plaint is correct? (3) Whether the suit is liable to be stayed under Section 10, Code of Civil Procedure?;


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