- (1.) The suit is in the form of a derivative action complaining of alleged illegalities perpetrated on the first defendant company by those at present in control thereof. In the classical derivative action, the plaintiff does not seek any personal relief save the indirect consequence as a member of the company after the company is rid of the illegality complained of. In such form of action, the eo nomine plaintiff sues for and on behalf of all shareholders of the company except the recalcitrant defendants and the benefit of the relief, when granted, is enjoyed by the company and, through it, by all its members.
(2.) The plaintiff has instituted the action with leave under clause 12 of the Letters Patent and has sought the following reliefs for the ultimate benefit of the company: "a) A scheme be framed for the management and administration of Bengal Brick Field Owners' Association having its registered office at 23A, Netaji Subhas Road, 3rd Floor, Kolkata - 700001; b) Declaration that the amendments to the Memorandum of Association and the Articles of Association of the Bengal Brick Field Owners' Association carried out on 18th August, 2007 are illegal, null and void; c) Declaration that all resolutions passed in the meeting of 18th August, 2007 with regard to the amendment of the Memorandum of Association and the Articles of Association of Bengal Brick Field Owners' Association are illegal and null and void; d) Declaration that the notice dated 18th June, 2008 is illegal, null and void; e) Decree for perpetual injunction restraining the defendants and their servants and agents from holding the 64th Annual General Meeting of the Association on 21st July, 2008 in terms of the notice dated 18th June, 2008; f) Decree for perpetual injunction restraining the defendants and their servants and agents from taking any steps or any further steps on the basis of the notice dated 18th June, 2008 for holding of the 64th Annual General Meeting on 21st July, 2008; g) Decree for perpetual injunction restraining the defendant Nos.2 to 13 from representing themselves or holding themselves out as office bearers of the association; h) Declaration that the defendant Nos.2 to 13 are not office bearers of the association; i) Decree for perpetual injunction restraining the defendant Nos.2 to 13 from interfering with in any manner in the management and administration of the association; j) Receiver; k) Injunction; 1) Attachment before judgement; m) Costs; n) Further or other reliefs." The principal challenge in the suit and in the plaintiff's interlocutory application is to an extraordinary general meeting of the company held on August 18, 2007 and an annual general meeting of the company which, at the time of the institution of the suit, had been convened to be held on July 21, 2008. The company is an existing company within the meaning of the Companies Act, 1956 and was registered under the previous statutory equivalent of what is now section 25 of the 1956 Act. The company was established to promote, protect and safeguard the interests of persons engaged in or concerned with the brick business and trade in the State of West Bengal. The Articles of Association of the company that were in place immediately prior to the extraordinary general meeting of August 18, 2007 envisaged the members of the company electing an Executive Committee and also electing office-bearers of the company each year. The Executive Committee would consist of a minimum of 60 and a maximum of 150 members. Prior to the amendment, the members would directly elect both the Executive Committee members and the office-bearers of the company every year. The procedure has been somewhat changed upon amendment. Post-amendment, the executive committee members are to be elected by the general members and the Executive Committee members are to elect office-bearers from among themselves.
(3.) By a notice of July 23, 2007 an extraordinary general meeting (EGM) of the company was convened to be held on August 18, 2007 for amending the Memorandum and Articles of Association of the company. The primary grievance of the plaintiff is that the plaintiff received no notice of the EGM. The larger grievance of the plaintiff is that the amendments allowed at the EGM eroded the fundamental authority of the members of the company to choose office-bearers and extended the tenure of office of both Executive Committee members and office-bearers to two years. The second challenge of the plaintiff as to the validity of the annual general meeting for the year ended March 31, 2007, then convened to be held on July 21, 2008 at the time of institution of the suit, is on the premise that an annual general meeting (AGM) of a company may only be held in accordance with section 166 of the Companies Act or not at all. The plaintiff says that the company obtained an extension from the Registrar of Companies for holding its AGM for the year ended March 31, 2007 by December 31, 2007 but no such AGM was held within such extended time. The plaintiff contends that the company has no authority to hold an AGM other than in accordance with the provisions of section 166 of the Act.;