GUR PRASAD KAPOOR Vs. LRAMESHWAR PRASAD

JUDGEMENT

(1.) This is an appeal from an order of temporary injunction passed by the learned Additional District Judge, Cawnpore, in a pending suit brought by the plaintiff- respondents for certain reliefs to be presently mentioned. The suit was instituted by eight plaintiffs for themselves and for plaintiff 9, a limited liability company styled as Ramchand Gurshahiman Cotton Mills Co., Ltd., registered under the Companies Act, of which the first eight plaintiffs claimed to be the directors. Eight persons were impleaded as defendants. B. Panna Lal Burman, defendant 8, was the general manager of the company; but the plaintiffs allege that he was lawfully dismissed in July 1932. Defendants 1 to 7 claimed to be the directors of the company-a fact which is denied by the plaintiffs, according to whom most of the defendants had either never been appointed directors by any lawful authority or had ceased to be such prior to the institution of the suit. The plaintiffs case, as set forth in the plaint, is that the defendants have practically excluded the plaintiffs from participation in the management of the affairs of the company, the actual control of the business being with defendant 8, who is in collusion with defendants 1 to 7. The reliefs prayed for in the plaint include one for a declaration that plaintiffs 1 to 7 are directors of the company. The position of plaintiff 8 as a lawfully appointed director was never disputed by the defendants but the plaintiffs pray for a declaration that plaintiff 8 is also the chairman of the board of directors. A further declaration is sought to the effect that defendants 1 to 6 are not the directors of the company and that defendant 8 is no longer the general manager thereof.

(2.) The suit was instituted on 18 August 1932. On 3 September 1932, the plaintiffs presented an application asking for a temporary injunction in somewhat indefinite terms. In substance they prayed for an injunction directing all the defendants to refrain from interfering with the plaintiffs management of the affairs of the company, defendant 8 to refrain from acting as the general manager of the company and Gur Prasad and defendant 1, to refrain from acting as the chairman of the board of directors, a position which he claimed as against plaintiff 8. The application was supported by an affidavit, and the parties produced a number of documents which enable the learned Additional District Judge to arrive at findings on certain questions haying an important bearing on the plaintiffs application for injunction. That plaintiffs 1 to 7 are directors of the company is denied by the defendants. If the determination of the question had depended upon facts seriously controverted, it would not have been desirable for the Court to prejudge the case; but facts, either admitted or proved by unimpeachable evidence, enabled the learned Judge to determine the question at an early stage of the case. We were addressed on that question at length and reference was made to facts admitted or sufficiently proved, and weare in a position to safely pronounce an opinion on the question already referred to for the purposes of these proceedings.

(3.) If plaintiffs 1 to 7 arc found to be-the directors of the company but are being excluded from participation in the management of the affairs of the company by the defendants, it is clear that there is a continuing invasion of the plaintiffs rights, and the case is a fit one in which the Court should grant a temporary injunction to prevent what is undoubtedly an injury to the plaintiffs rights. It has not been argued by the learned advocate for the defendants that the Court has no power, in the circumstances of the case, to grant a temporary injunction. Order 39, Rule 2, Civil P.C., which is clearly applicable, gives a very wide power to the Court to give protection against injury to the plaintiffs during the pendency of the suit. Under the Articles of Association of the company the maximum number of directors should be nine, with a minimum of five. It is common ground that prior to 29th March 1930 the following seven persons were the directors of the company : (1). R.B. Vikramajit Singh, plaintiff 8. (2) B. Dwarka Prasad Singh, defendant 6. (3). B. Ram Gopal, defendant 7. (4). B. Parsotam Das, since deceased. (5), L. Ram Kumar, plaintiff 6. (6). B. Behari Lal, defendant 5. (7). B. Shri Ram Khanna, since resigned.