- (1.) THIS is an application on behalf of the defendant no. 1 in this suit praying that this suit being suit No. 47 of 1977 be taken off the file, or the Suit No. 47 of 1977 be dismissed and also praying that the interlocutory application made by the plaintiff on or about 28th January, 1977 be dismissed, and for further stay of the suit till the disposal of the present application and other incidental orders. In order to appreciate this application it may not be inappropriate to refer to certain facts. The plaintiff in this case is a company incorporated under the provisions of the Companies Act, 1956 and there are in all 15 defendants. It appears that on 8th of January, 1977 there was resolution passed by the Board of Directors of the plaintiff company giving authority to one Sri M. I. Mittal to make application on behalf of every body to all concerned. By the resolution it was resolved that one Sri M. L. Mittal and Sri Damodarlal singly or jointly be authorised to carry out all negotiations, make representations sign papers, application forms and other necessary documents to all relevant Government and Semi-Government bodies, institutions, banks etc. and to do all such acts or things as may be necessary in connection with the proposed-Mini Steel Plant in Indonesia. It was further resolved that Sri Mittal and Sri Damodarlal singly or jointly be authorised to delegate the above mentioned powers if found necessary to such persons as they may deem fit and proper. On or about 27th of February, 1979 Sri Mittal wrote on behalf of the plaintiff company to the Indonesian government enclosing what has been described as Form 'a' application. In April, 1973 Form 'a' application was submitted in plaintiffs name to the Indonesian Government. A letter was written by the plaintiff on or about 24th of April, 1973 to the Indonesian, government which has been pleaded in paragraph 12 of the plaint. On 22nd of February, 1974 letter was written by the plaintiff's banker recommending plaintiff's financial condition to the Indonesian Government. On the 5th of March, 1974 there was a letter from Bank of India Singapore to Sri M. L. Mittal stating the terms and conditions of financial assistance of the joint venture. The said terms and conditions have been set out in Annexure 'f' to the plaint. On the 15th of March, 1974 the Joint Venture Agreement was-signed. The said agreement appears as an annexure to the plaint. On the 25th of March, 1974 Sri M. L. Mittal sent a note to the plaintiff at Calcutta about feasibility and advantage of Joint Venture Programmed. On the 24th of May, 1974 Annual General Meeting of the plaintiff company for the financial year up to 21st of October, 1973 was held and on 16th of April, 1975 the plaintiff received licence from Indonesian Government to make investments. On the 15th of June. ,1975 there was a resolution by the Board of Directors agreeing, interalia, to substitute A. S. C. Engineers and Consultants Ltd. the defendant no. 1, in the present suit in place of the plaintiff in the said Joint Venture programmed. Mohonlal Mittal is the defendant no. 2 and Vijay Sankar Modi is the defendant no. 7. On 2nd of July, 1975 there was a letter by the defendant no, 7 evidencing that the plaintiff's Board Resolution dated 15th of June, 1975, was acted upon. At least that is the version of the present petitioner before me. The said fact is relied on from an annexure to the plaint. On the 17th of July, 1975the dependent No. 1 was formed. 21st of July, 1975 plaintiff's application to the Central Government for substitution of the defendant no. 1 for the plaintiff for approval under Section 27 (6) of the Foreign Exchange Regulation Act, 1973 was made. On the 27th of October, 1975 there was a change in the preliminary licence decree of Indonesian Government dated 15th of April, 1975 substituting the name of the defendant no. 1 in place of the plaintiff. On the 17th of November, 1975 the foreign company of the joint venture was incorporated. On 28th of, November, 1975 letter was written by the defendant no. 1 to the Central Government enclosing amendment of the Indonesian Ministerial Decree substituting the name of the defendant no. 1 as participant. On 22nd of November, 1976 there was an allotment of 40,000 equity Shares to the defendant no. 7 (sic) namely, Giovanola Binny Ltd. in the defendant nq. 1. On the 28th of January, 1977 the present suit was filed.
(2.) IN this suit the plaintiff has, interalia, asked for a declaration that the resolution purported to have been passed at the purported board meeting of the defendant no. 1 company alleged to have been held in November, 1976 are ula'travires, void and of no effect and not binding on the plaintiff or its shareholders, declaration that the defendant no. 2 is no longer the constituted attorney of the plaintiff company declaration that the purported issue and/or allotment of 40000 shares of or in the capital of the defendant no. 1 in favour of the defendant no. 7 is malafide, illegal, void and of no effect and not binding on the plaintiff or its shareholders, perpetual injunction restraining the defendants and each one of them, their advocates and agents from giving effect or any further effect or acting on the basis of the purported resolution alleged to have been passed at the purported board meeting of the plaintiff company alleged to have been held on the 22nd of November, 1976, for a perpetual injunction restraining the defendant no. 2 from holding himself out or representing himself as the constituted attorney of the plaintiff company or acting upon or on the basis of the said power of attorney, perpetual injection restraining the defendants nos. 1 to 5 and 7 to 15 and each of them, their servants and agents from in any way acting contrary to the terms and conditions of the said Joint Venture Agreement mentioned in the plaint, for a decree directing cancellation and delivery of all documents and executed contrary to Joint Venture Agreement, for a perpetual injunction restraining the defendants and each of them their servants and agents from giving effect or any further effect or resolution whereby and where under the said 40000 shares were alleged to have been allotted to the defendant no. 7 and in the alternative an injunction restraining the defendants and each one of them, their servants and agents from issuing and or allotting the said 40000 shares or any further share to the said defendant no. 7 or any person or at all, for a mandatory injunction against defendant nos. 1 to 5 and 7 to 15 directing them to rectify the letter of change and foreign collaboration project mentioned in paragraph 59 of the plaint and all consequential orders to be made in connection therewith, mandatory injunction against defendants nos. 1 to 5 and 7 to 15 to take all steps for alteration of the Articles of Association of P. T. Andhra Steel Indonesia mentioned in paragraph 61 of the plaint, for a decree for accounts against defendant nos. 1 to 5 and 7 to 15 as mentioned in paragraph 56 of the plaint and for other consequential orders for appointment of receiver and/or administrator etc. In February, 1979 the present application was made by the defendant no. 1 under Order VII, Rule 7 of the Code of Civil Procedure on the ground that the plaint does not disclose any cause of action. and also because the suit as appearing from the plaint is barred by law.
(3.) I have set out the basis of the suit by the present plaintiff. The plaintiff is really contending that it is entitled to participate in the joint venture in Indonesia being implemented by a Indonesian company by the name P. T. Andhra Steel Indonesia by rendering service of its technicians and by acting as expert adviser in the said joint venture. According to the defendant the name of the said P. T. Andhra Steel has since been changed to P. T. In do Is pat. The defendant contends that the plaintiff company never carried on such business and therefore the same would be ultravires. the memorandum of its article of association. Furthermore according to the defendant such proposed business of the plaintiff company would be altogether a new business not being carried on by the plaintiff company at the date of the institution of the suit or at all material times prior thereto and as such the plaintiff company was not entitled at the date of the institution of the suit to undertake such business without the sanction of its members by a special resolution. The defendant further asserts that no such special resolution authorizing it to undertake such a proposed business had been passed by the plaintiff company. Therefore, according to the defendant the statutory condition precedent to the plaintiff's carrying on of the said proposed business was not at all satisfied. It is the further case of the defendant that the case of the plaintiff that it has been substituted by the first defendant in the joint venture in Indonesia and collaboration was inconsistent on the basis of the plaintiff's own statement as contained in the plaint as to the reasons and circumstances in which the first defendant came to be incorporated. The defendant, further, states the said purported complaint is untrue and misconceived. The defendant asserts that the plaintiff is not even a member of the said P. T. Andhra Streel Indonesia the foreign company formed as a, result of the said joint venture agreement. According to the defendant the real complaint of the plaintiff as appearing from the plaint appears to be the alleged default on the part of the said P. T. Andhra Steel Indonesia in allotting any share to the plaintiff company. The defendant states that there is however, no evidence of any application having been made by the plaintiff before the said Indonesian concern for allotment of any of its shares to the plaintiff or any refusal. The defendant asserts that the plaintiff has not prayed in the present suit for any relief in this matter and has not impleaded the Indonesian Company which is a necessary party. The defendant, further, asserts that the plaintiff has not disclosed in the body of the plaint with whom the alleged joint venture agreement dated 15th Of March, 1974 was entered into and there is no evidence that the said P. T. Andhra steel, Indonesia was formed as a result of such alleged agreement, or in fact had adopted the said agreement or any of the transaction that took place pursuant to the said agreement and prior to the formation of the said concern or has entered into the agreement with the plaintiff containing the terms and conditions or has showed any readiness or willingness to abide by the terms and conditions of such agreement. Therefore according to the defendant the said alleged joint venture agreement was not enforceable. The defendant has, further, asserted that the present suit had not been instituted in the representative capacity and no leave under the provisions of Order I, Rule 8 of the Code of Civil Procedure has been sought for or obtained. All necessary persons who are members of the first defendant at the date of the Institution of the present suit have not been impleaded as parties in the suit namely, B. C. Mittal and M. L. Agarwal, according to the defendant. Further, all persons who are directors of the first defendant and of the plaintiff company at the relevant time as indicated have not been impleaded as they should have been. According to the plaintiff, a board resolution by the plaintiff company was passed on the 16th of June, 1975 resolving to place the first defendant in place and stead of the plaintiff company. The defendant, further, asserts that the plaintiff not being a member of P. T. Indo Ispat cannot have any right or say in the management of the affairs of the company which company is working out the collaboration agreement in which the plaintiff is wrongfully and illegally attempting to participate. In the premises in substance the defendant states that the plaint as pleaded does not disclose any cause of action.;