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1975 Supreme(Kar) 112

Karnataka High Court
J.KRISHNA MOORTHY - Appellant
Versus
BANGALORE TURF CLUB - Respondent
Decided On : 08-13-75
M.F.A. : 500 of 1974

Advocates:
MOHAMAD HAFIZALI, S.G.SUNDARA SWAMY, W.K.SUNDAR MURTHY

The main legal point established in the judgment is that the resignations of the elected members became immediately operative and could not have been withdrawn on a subsequent date. The court also emphasized the importance of the balance of convenience in granting interim relief.

Headnote:

Companies Act, 1956 - Temporary Injunction - Art. 37 - The court granted temporary injunction against the directors of the Bangalore Turf Club Ltd. The plaintiff, a member of the company, brought a suit for declaration that the elected members have ceased to be committee members and sought permanent injunction to restrain them from exercising powers as committee members and Stewards. The court held that the resignations of the elected members became immediately operative and could not have been withdrawn on a subsequent date. It also observed that the remaining Directors could effectively manage the affairs of the Company. The court concluded that the balance of convenience lies in favor of the defendants for refusing interim relief to the plaintiff.

Fact of the Case:

The plaintiff, a member of the Bangalore Turf Club Ltd., brought a suit seeking declaration that the elected members have ceased to be committee members and sought permanent injunction to restrain them from exercising powers as committee members and Stewards. The court found that the resignations of the elected members became immediately operative and could not have been withdrawn on a subsequent date. It also observed that the remaining Directors could effectively manage the affairs of the Company.

Finding of the Court:

The court found that the resignations of the elected members became immediately operative and could not have been withdrawn on a subsequent date. It also observed that the remaining Directors could effectively manage the affairs of the Company. The court concluded that the balance of convenience lies in favor of the defendants for refusing interim relief to the plaintiff.

Issues: The issues revolved around the resignations of the elected members, the power of the remaining Directors to manage the affairs of the Company, and the balance of convenience in granting interim relief to the plaintiff.

Ratio Decidendi: The court held that the resignations of the elected members became immediately operative and could not have been withdrawn on a subsequent date. It also observed that the remaining Directors could effectively manage the affairs of the Company. The court concluded that the balance of convenience lies in favor of the defendants for refusing interim relief to the plaintiff.

Final Decision: The court allowed the appeal and set aside the order granting temporary injunction. The plaintiff's appeal failed and was dismissed.

( 1 ) THESE two appeals are preferred against the common order whereby the First Additional Civil Judge, Bangalore City granted temporary injunction against the directors of the Bangalore Turf Club Ltd.

( 2 ) APPELLANT in M. F. A. No. 500 of 1974 is the plaintiff in the court below. He is one among the 300 members of the Bangalore Turf Club Ltd, which is a public limited company incorporated under the Companies Act, 1956, to carry on the business of the Bangalore Race Club and other activities connected with the running of horse races. The business and management of the company is vested in the committee consisting of 9 elected members and 4 nominated by the State Government.

( 3 ) DURING the races held on 8th December 1973, there was too much commotion and unruly behaviour from these who came to witness the races. The police who were on the scene, did not effectively act to maintain law and carder, with the result that the races had to be cancelled, much against the will of the members of the committee. The elected members were very much annoyed by the inaction of the police, and they passed a resolution on 8th December 1973, the effect of which was the subject matter of the suit instituted by the plaintiff.

( 4 ) THE plaintiff contending that the elected members have tendered their resignation by their resolution dated 8th December 1973, and therefore have no right to remain as committee members and take part in the subsequent mettings, brought a suit for declaration that they have ceased to be the committee members as well as Stewards with effect from 8th December 1973. He has also sought for permanent injunction to restrain them from exercising powers as committee members and Stewards. Lastly, he has prayed for a direction to the Company to call for an extraordinary general body meeting for the purpose of filling up the casual vacancies caused as a consequence of the resignations of the elected members. Interrupting the narration, I have to refer to some more events that followed after the resolution dated 8th December 1973. The Secretary to government Home Department met the committee members and requested them to reconsider their decision embodied in the resolution dated 8th december 1973. The said Secretary is also a member of the committee being the Government nominee. He appears to have given, a categorical assurance to the committee that adequate police, arrangements for the maintenance of law and order and for protection of life and property would be made and the miscreants would be severely dealt with. In view of that assurance the the committee met again on 11th December 1973 and passed a resolution stating that on the assurance given by the Commissioner for Home Affairs and on the request of the Club Members, Owners, Trainers, Bookmakers, jockeys and other members of the Racing fraternity, the elected members have no reason to press fof their conditional resignation as the circumstances which compelled them to do so were sought to be fully remedied. They have also passed a resolution to resume the winter meetings as per the prospectus already published with the time schedule from 21st December 1973. Pursuant to the said resolutions, the elected members continued to function as committee members. The regular meetings of the committee were held and the business of the Company had been transacted as usual. The extraordinary general body meeting of the Company was also, held on 18th February 1974. The plaintiff who, was present in that meeting, did not raise any objection regarding the continuance of the elected members.

( 5 ) ON 21st March, 1974, the plaintiff brought the suit contending that the elected members, after their resignations by resolution dated 8th december 1973 have no, right to manage the affairs of the Company. The contention of defendants 2 to 10 was that they did not intend to resign outright, but the offered their conditional resignations to serve as a threat to government to maintain law and orde















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