Salil Kumar Roy Chowdhury, J. - (1.) This is an interim application in the main application under Ss. 397, 398, 399, 402, 403 and 406 of the Companies Act, 1956, The Petitioner, inter alia, asked for supersession of the Board of Directors, appointment of Special Officer and/or Administrator to carry on the management of the Respondent company and various other consequential declaration, injunction and directions.
(2.) The facts of the case shortly are that the Respondent company Darjeeling Tea and Cinchona Association Ltd. was incorporated on January 16, 1879 and its registered office until recently was at No. 2 Fairlie Place, Calcutta. The authorised capital of the company is Rs. 10 lakhs divided into 10,000 ordinary shares of Rs. 100 each. The amount of capital of the company paid up or credited as paid is Rs. 5 lakhs 64 thousand divided into 5,640 ordinary shares of Rs. 100 each. The Petitioner is admittedly a Director and shareholder of the company and he has the requisite qualification under Sec. 399 of the Companies Act, 1956, having the consent of the other share -holders in moving the application under Ss. 397 and 398 of the Companies Act. The company was managed by the Macneill and Barry Ltd. and it belonged to the said group. The Petitioner is the owner and registered holder of 16 ordinary shares and was appointed as a Director of the company in 1963 and he is still a Director of the company. The Petitioner alleged that from the search of the records at the office of the Registrar of Companies, it appears that Macheill and Barry Ltd. was the registered holder of 1,642 shares which is the largest single block of shares held by any share -holder. It further appears from the annual reports and accounts of the company as on December 31, 1972, that the Directors of the company apart from the Petitioner were C.J.N. Will, Lord Sinha of Raipur, S.C. Bhandari and A. Singh and the auditors of the company were Messrs. Lovelock and Lewes. It is alleged by the Petitioner that a notice of the Board meeting was to be held on May 3, 1973, at 3 -30 p.m. to consider (a) confirmation of the minutes of the meeting held on April 27, 1973, (b) opening of Bank accounts, (c) shifting of registered office, (d) resignation of Lord Sinha, C.J.N. Wills and S.C. Bhandari from the directorship of the company and (e) appointment of R.K. Chowdhury as Director of the company. It is alleged by the Petitioner that the said notice of the meeting was served on the Petitioner at 3 p.m. on May 3, 1973. A copy of the said notice is annexed to the main petition in the application under Ss. 397 and 398 and marked with annEx. 'C'. I may point out that the entire main petition has been made an annexure to the affidavit in support of the Judges Summons in this interim application. It is alleged by the Petitioner that the said notice was too short and was served on the Petitioner only half an hour before the time fixed for holding the said meeting on May 3, 1373, to consider such vital and important business as indicated in the notice of the said Board meeting. The Petitioner further states that prior to the said notice he was not made aware of any proposed change in the Board of Directors or in the registered office or the appointment of R.K. Chowdhury. It is alleged by the Petitioner that the said R.K. Chowdhury is the maternal uncle of Mahabir Prosad Poddar, the Respondent No. 4. It is further alleged that the said R.K. Chowdhury is a benamdar and nominee and stooge of the said Mahabir Prosad Poddar. The Petitioner also alleged that the registered office of the company was originally at No. 2 Fairlie Place, Calcutta. It was shifted to No. 42/1 Strand Road, Calcutta and then subsequently to No. 4 Fairlie Place, Calcutta, as a tenant of Hemraj Mahabir Prosad Pvt. Ltd., a domestic concern of Mahabir Prosad Poddar. It is further alleged by the Petitioner that the Petitioner challenged the validity of the Board meeting dated May 3, 1973, by a letter dated June 2, 1973. The Petitioner further alleged that he had no notice of the subsequent Board meetings which ought to have been held at least once every month. The Petitioner further alleged that he did not receive the minutes of the Annual General meeting of the company which was purported to be held on May 31, 1973. The said letter dated June 22, 1973, is set out hereunder: 22nd June, 1973 From:Balmukund Bajoria,6/1/3 Queens Park,Calcutta -19. To R.K. Chowdhury,Executive Director,Darjeeling and Cinchona Association Ltd.,42/1 Strand Road, Calcutta. Dear Sir, After the meeting of the Board of Directors of the Company held on 3rd May, 1973, at 2 Fairlie Place, Calcutta -1, I have not received any notice of the meeting of the Board of Directors for the month of May and also for the month of June as was usually held previously. No information has also been given to the share -holders about the change of the address of the registered office. I am of the opinion that the notice of meeting of the 3rd May, 1973, to the Directors was illegal inasmuch as the same was received by me on the 3rd May, at 3 p.m. and as such, I could not attend the meeting. I feel that the above meeting was illegal and all the proceedings thereto are illegal. Please note that I am of the opinion that the meeting of the Board of Directors should be held every month and notice of such meetings should be sent to the Directors by registered post. I have not received the minutes of the meeting of the Annual General Meeting which was held on 31st May, 1973, as well as of the Board of Directors held on 3rd May, 1973. Please note that I want to visit the estates within a fortnight or so and arrangements for my stay should be made over there. I have not also received the statement of crop and sales as well as the production figures. Please also let me know the position of the Bank Accounts. I am awaiting to receive your reply of this letter within a week from you. Yours faithfully,Sd/ - Illegible. c.c. Registrar of Companies(West Bengal)27 Brabourne Road, Calcutta -1. c.c. Secretary, Company Law Board,Narayani Building,27 Brabourne Road, Calcutta -1.
(3.) The said letter was addressed to R.K. Chowdhury, Executive Director of the company at No. 42/1 Strand Road, Calcutta. It appears that by a letter dated July 12, 1973, the said company replied to the Petitioner's said letter dated June 22, 1973, which is set out hereunder: Darjeeling Tea and Cinchona Association Limited. Regd. with A/D. 42/1 Strand Road, (2nd floor)Calcutta -7. 33 -9771 -73 Ref: DTCA/P/1/73Sri Balmukund Bajoria,6/1/3 Queens Park, Calcutta -19. 12th July, 1973 Dear Sir, With reference to your letter dated 22nd June, 1973 and your subsequent call on the undersigned, we would advise as follows: The change of registered office of the company was effected in due compliance with the requirements of the Companies Act, 1956. Kindly note that no information is required to be given to the share -holders in this regard. Due intimation was given ( to you for the Board meeting held on 3rd May, 1973. Since the Board meeting was duly held notwithstanding your unfortunate absence therefrom your contention regarding the meeting and the proceedings is not correct. Your opinion regarding holding of Board meeting and sending of notices has been noted. This will be placed before the next Board meeting for consideration by the other Directors. A copy of each of the minutes of the Annual General Meeting held on 31st May and the Board meeting held on 3rd May, 1973, is being sent to you shortly. It is surprising, however, that you did not receive a copy of the letter. Detailed information regarding crop, sales and production are made available at Board meeting and will be similarly available in respect of current period at the next meeting of the Board. Your request regarding arrangement for your stay during your proposed visit to the Tea Estate of the company is not understood. It is observed that although you have been a Director of this company for a long time you have very seldom attended the Board meeting so far. Since the company was thus denied the benefit of your guidance as a Director and since it appears to be your intention that you do not intend to actively participate in the management and affairs of the company, the significance or necessity of such visit, as proposed by you may kindly be indicated at your earliest convenience. In the meantime, you are earnestly requested to regularly attend Board meetings henceforward, in order to assume due responsibility for your office of Director. Kindly note that your sudden call on the undersigned without any prior notice or appointment was rather embarrassing and your hostile and rude behaviour on such occasion is highly regretted. The undersigned and other Directors of the company look forward to receiving your full co -operation on the Board in future and to start with, a change of attitude on your part is most needed to enable the Board to work in harmony as a team. Also please note that the undersigned is a Director of the company and not an Executive Director as referred to in your letter under reply. The need for your copying your letter to various authorities must be known to you only, but for the sake of regularity in correspondence, this letter is being copied to the Registrar of Companies (West Bengal). We trust that we have been able to clarify the position as desired by you and that it may be expected that you would try to improve your attendance at the future Board meetings. Yours faithfully,Darjeeling Tea and Cinchona Asscn. Ltd.R.R. Chowdhury Director. Copy to: The Registrar of Companies (West Bengal)27 Brabourne Road,Calcutta -1.;