ORIENTAL METAL PRESSING WORKS P LIMITED Vs. BHASKAR KASHINATH THAKOOR
LAWS(SC)-1960-12-20
SUPREME COURT OF INDIA (FROM: BOMBAY)
Decided on December 16,1960

ORIENTAL METAL PRESSING WORKS PRIVATE LIMITED Appellant
VERSUS
BHASKAR KASHINATH THAKOOR Respondents


Referred Judgements :-

GUARDIANS OF THE POOR OF THE WEST DERBY UNION V. THE METROPOLITAN LIFE ASSURANCE SOCIETY [ ]





JUDGEMENT

A.K.SARKAR - (1.)DADOBA Tukaram Thakoor carried on a business under the name and style of Oriental Metal Pressing Works. On 26/05/1955, a private company was incorporated under the name of Oriental Metal Pressing works Ltd., hereafter called the Company, to take over the aforesaid business. On 7/07/1955, DADOBA transferred his business to the Company. On the same date, an agreement was made between him and the Company by which he was appointed the managing director of the Company for life and was given the power "by deed inter vivos or by will or codicil to appoint any person to be a managing director in his place and stead''. Regulation 109 of the articles of the Company reproduced these provisions. The shareholders of the Company were DADOBA, his brother, the respondent Bhaskar, and his two sons, the appellant Govind and the respondent Harish, of whom the first three were the directors, DADOBA being the managing director. This constitution of the Company continued till DADOBA's death on 14/01/1957.
(2.)DADOBA had died leaving a will whereby he purported to appoint the appellant Govind the managing director of the Company in his place from the date of his death. Shortly after DADOBA's death, disputes arose between the appellant Govind and the respondent Bhaskar. The appellant Govind was contending that the respondent Bhaskar had ceased to be a director on account of his failure to attend the directors' meetings. He also purported to co-opt the appellant Bhalchandra as a director. The respondent Bhaskar contended that he had not ceased to be director and challenged the legality of the appointment of the appellant Bhalchandra as a director. He further contended that the appointment of the appellant Govind as the managing director of the Company by the will of DADOBA, was void, On 22/11/1957, the respondent Bhaskar filed a suit in the City Civil Court of Bombay against the Company, the appellants Govind and Bhalchandra and the respondent Harish for the following declarations and for reliefs incidental thereto:
(a) the appointment of the appellant Govind as the managing director was void;

(b) the appointment of the appellant Bhalchandra as director was illegal and inoperative; and

(c) he (the respondent Bhaskar) was and continued to be a director.

The learned Judge of the City Civil Court accepted all the contentions of the respondent Bhaskar and made the declarations claimed.

The Company and the appellants Govind and Bhalchandra appealed from this decision to the High Court at Bombay. The appeal came up for hearing before a bench of two learned Judges of that Court. These learned Judges having taken different views, the matter was referred to another learned Judge of the same High Court. In the eventual result according to the opinion of the majority of the learned Judges, the appeal was dismissed and the decree of the City Civil Court was confirmed. The High Court however granted a certificate under Art. 133 (1)(c) of the Constitution and the present appeal has been filed by the Company, Govind and Bhalchandra pursuant thereto. The respondents to this appeal are Bhaskar and Harish.

It appears that while the appeal was pending in this Court, the respondent Bhaskar sold his holding in the Company to the appellant Govind and has now no interest in the Company or the appeal. No one has consequently appeared to contest the appeal in this Court, the respondent Harish apparently not being interested in doing so. In these circumstances, the questions whether the respondent Bhaskar continues to be a director and whether the appellant Bhalchandra was legally co-opted as a director are no longer live issues and have not been canvassed in this appeal. On those questions therefore we express no opinion. Another result, rather unfortunate, has been that we have not had the advantage of arguments against the appeal.

(3.)THE Courts below held that the appointment of the appellant Govind as managing director by the will of Dadoba was void in view of the provisions of S. 312 of the Companies Act, 1956. That S. reads thus:
S. 312. "Any assignment of his office made after the commencement of this Act by any director of a company shall be void.'' THE Act came into force on 1/04/1956 and Dadoba had both made his will and died, after that date. THE appointment of the appellant Govind as managing director was, therefore, made after the commencement of the Act.

Now, S. 312 makes the assignment of his office by a director void. It does not on the face of it say that an appointment by a director of another person as the director in his place, would be void. The High Court, however, took the view that the word "assignment'' in the S. included "appointment'', and so, such an appointment would also be void under the Section. What we have to decide is whether the High Court was right in this view.

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