Bhaskar Bhattacharya, J. - (1.) THESE two appeals are at the instance of a plaintiff in a suit for declaration and injunction and is directed against a combined order dated August 6, 2010, passed by a learned Single Judge of this Court by which His Lordship disposed of two applications one filed by the plaintiff for injunction and the other filed by the defendants No. 1 to 13 for permission to hold meetings. The application filed by the defendants No.1 to 13 being G.A. No. 4009 of 2008 for permission to hold meeting was disposed of by directing the defendant No. 2 to hold and complete its 64th Annual General Meeting (AGM) for the year ending on March 31, 2007 within ten weeks from the date of passing of the order by complying with the provisions as to issuance of notice and laying of the balance sheet and profit and loss account of the company for the relevant financial year. His Lordship further ordered that as the defendant No.1 was also in default in holding AGMs for the financial year ended March 31, 2008 and March 31, 2009 and since there would be no time to hold the AGM for the financial year ended March 31, 2010, the company was directed to hold and complete the AGMs for the relevant financial year within eight weeks of the previous AGM. His Lordship further made it clear that the amended association of the company would apply. The prayer of injunction sought by the plaintiff in respect of the business transacted at the EGM of August 18, 2007 was, however, refused.
(2.) BEING dissatisfied, the plaintiff has come up with these two appeals. The appellant before us instituted a suit after taking leave under clause 12 of the Letters Patent with the following reliefs: "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 on 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 and 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 judgment; m) Costs; n) Further or other reliefs." The facts leading to the filing of the aforesaid suit may be summed up thus: a) The company was an existing company within the meaning of 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 interest of the persons engaged in or concerned with the brick manufacturing business and trade in the State of West Bengal. The articles of association of the company that were subsisting 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 said amendment, the members of the Association could elect directly, both the executive committee members and the office bearers of the company, in every year. Such procedure has been changed by way of amendment and after such 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. b) 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 article of association of the company. The primary grievance of the plaintiff was that the plaintiff received no notice of the EGM. The further grievance of the plaintiff was 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 the executive committee members and office bearers to two years. c) The second challenge of the plaintiff as to the validity of the annual general meeting for the year ending on March 31, 2007, then convened to be held on July 21, 2008, at the time of institution of the suit, was 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. According to the plaintiff, the company obtained an extension from the Registrar of Companies for holding its AGM for the year ending on March 31, 2007 by December 31, 2007 but no such AGM was held within such extended period. According to the plaintiff, the company had no authority to hold an AGM other than in accordance with the provision contained in section 166 of the Act. d) According to the contesting defendants, the plaintiff and some other similarly minded members of the company had always acted in concert. Accordingly, Kamal Krishna Ghosh, Bhaiya Surendra Singh and Subhendu Goswami, three of its members, have set up the plaintiff. The company and those at present in control thereof, insinuate that the said Ghosh, Singh and Goswami chose the plaintiff from among the members of the company who did not attend the EGM to espouse their personal cause. According to the contesting defendants, the notices for the EGM were duly issued to the members and the EGM was attended by a substantial number of the general members of the company. The defendants further alleged that the notices were sent under certificate of posting and produced a document to show due despatch of the notices. e) According to the contesting defendants, if the plaintiff was diligent, he would have known the fact that EGM had been convened and the amendments were passed thereat long before the present suit was filed. It is pointed out that the present suit has been brought a few days before the AGM for the year ended March 31, 2007 had been convened to be held on July 21, 2008 with a false charge of the plaintiff having been kept in the dark in the matter of EGM and the amendments proposed and passed thereat. According to the defendants, within a few days of institution of the suit, the said Ghosh and three other supporters applied to be added as parties following advertisements having been published pursuant to the leave granted under Order 1 Rule 8 of the Code of Civil Procedure. f) In the aforesaid suit the defendant Nos.1 to 13 filed an application being G.A. No. 4009 of 2008 with the following prayers: "a) If necessary, leave be given to the petitioners herein being the defendant Nos.1 to 13 to make the instant application; b) If necessary, leave be granted to the defendant Nos.1 to 13 being the petitioners herein to make an application before the Company Law Board for convening, conducting and holding the 65th Annual General Meeting of the defendant No.1 on such terms and conditions as this Hon'ble Court may deem fit and proper; c) This Hon'ble Court be pleased to record that the defendant Nos.1 to 13 intent to make an application under section 167 of the Companies Act, 1956 to the Company Law Board for convening, conducting and holding the 65th Annual General Meeting of the Association viz. the defendant No.1; d) Leave be given to the defendant Nos.1 to 13 being the petitioners herein to apply to the Company Law Board for convening, conducting and holding the 64th Annual General Meeting of the company to transact the business specified in the notice forming Annexure "A" hereto dated 18th June, 2008 on such terms and conditions as this Hon'ble Court may deem fit and proper; e) Costs of any incidental to this application be paid by the plaintiff; f) Ad interim orders in terms of prayers above; g) Such further and/or other order or orders be passed, direction or directions be given as Your Lordships may deem fit and proper." g) The plaintiff resisted the said prayer on the ground that the decision to convene the AGM beyond December 31, 2007 was not only ultra vires the company's charter but was also contrary to the governing statute. The substance of the plaintiff's contention was that the company shall have no authority to hold or complete a General Meeting after the expiry of the period prescribed by the statute unless an extension thereof is obtained in accordance with the statute. h) According to the plaintiff, in view of the provision contained in section 167(2) of the Companies Act a civil court cannot grant any leave to the defendant to hold AGM beyond the time fixed by statute. i) The defendants, on the other hand, opposed the aforesaid contention and according to them, the provision contained in sections 166, 167 and 168 of the Companies Act do not stand in the way of a company to call a meeting beyond the period although for not holding the meeting within the time it is to suffer penal consequences. j) By the order impugned herein the learned Single Judge appears to have accepted the aforesaid contention of the plaintiff that a company has no suo motu authority to hold its AGM beyond the time prescribed by statute. However, His Lordship was of the view that if the requirement of a company to hold its AGM is seen as a duty cast on the company by the governing statute, as is evident from the provisions of the companies Act, then it is necessary that such obligation be required to be discharged at the earliest and as the suit has been instituted by a member, in effect, for the benefit of the company and, consequently, for the benefit of all members of the company, any order passed in the present proceedings will not only bind the company but will also bind all its members and there is no impediment in issuing a direction to compel this company to hold the AGMs for which it is in default and consequently, the order impugned was passed.
(3.) BEING dissatisfied, the plaintiff has come up with the present appeal. Mr. Banerjee, the learned Advocate appearing on behalf of the appellant, strenuously contended before us that the Companies Act, 1956 having given authority to the Company Law Board alone to give extension of time for holding Annual General Meeting beyond the time fixed by the said Act and at the same time, for holding of meeting beyond the period fixed by law, and there being a penal provision provided in the Act itself, a Civil Court cannot permit a company to hold a meeting beyond the said period. According to Mr. Banerjee, the learned Single Judge erred in law in giving sanction to the defendant No.1 to hold the meeting as the Civil Court, is not vested with such authority and it is only for the Company Law Board to pass such direction, if approached. In support of his contention, Mr. Banerjee places strong reliance upon the division bench decision of this Court in the case of Ambary Tea Company Ltd. vs. Manjusree Saha, reported in 1988(1) Cal LT 61. Mr. Banerjee, therefore, prays for setting aside the order passed by the learned Single Judge.;