JUDGMENT - (1) A question of considerable importance and some interest arises on this application under the new Companies Act of 1956 and the question relates to the tenure of office of what are usually described as directors elected at annual general meetings of companies. Section 166 of the new Companies Act lays down that the first annual general meeting shall be held by a company within eighteen months of its incorporation. It also lays down that the next annual general meeting of the company shall be held by it within nine months after the expiry of the financial year in which the first annual general meeting was held; and thereafter an annual general meeting shall be held by the company within nine months after the expiry of each financial year. Stripped of details, the provision for years subsequent to the first annual general meeting is that a company shall call its annual general meeting within nine months after the expiry of its financial year. That provision is mandator. It is express and explicit. Ordinarily elected directors of companies are not appointed for any specified period of time in term of years. They retire by rotation and they retire from their office of directorship at a date which wuld be the date of the statutory annual general meeting of the company. The question which we have to determine is whether in a case where despite the mandatory provisions of Section 166 and in breach of their duty as directors, the Directors do not call an annual general meeting of the company for any length of time, can they claim to continue in their office of director afer the expiry of the period mentioned in the section for calling the statutory meeting. Prima facie the contention that they can continue to hold the office in any such case would seem wholly unsound. But we are told that there is a provision in the Companies Act which, if properly interpreted, leads to such an undesirable result.

(2) The application before us is by the Colaba Land and Mills Co. Ltd.and the circumstances in which it is made are these. On 14th April 1955 the annual general meeting of the company was held for the year 1954. The financial year of this company, which is a public company, ends on 31st December. At that meeting Jayantilal N. Patel retired by rotation and beign eligible for re-election was re-elected as a director. The annual general meeting for the year 1955 was held on 29th March 1956. At that meeting V. J. Pilani retired by rotation and being eligible for re-election was re-elected. The annual general meeting for the year 1956 has not been called to this date. The period for holding that meeting was extended by the Registrar upto 31st March 1958. Even so that meeting was not held. Nor has the annual general meeting for the year 1957 been held to this date. Between March 1957 and November 1957 there were certain changes in the constitution of the Board of Directors of the Company as some directors resigned and one of them died. In November 1957 the position as regards the personnel of the Board of Directors of the company was this:

(1) V. J. Pilani who had been elected in the annual general meeting of the shareholders on 29th March 1956.

(2) Jayantilal Patel who had been elected in the annual general meeting of the shareholdes of the company on 14th April 1955.

(3) K. J. Pilani who had been elected in the annual general meeting of the shareholders on 22nd April 1954.

(4) R. S. Sethna who had been appointed by the Central Government on 12th November 1957.

(5) F. S. Wadia who had been appointed by the Central Government on 21st November 1957.

(6) Solomon Moses who was elected as as addtional director of the company under S. 260. That was in November, 1957.

On 30th September, 1958 the personnel of the Board of Directors of the company was the same with this difference that K. J. Pilani who, it was said, had vacated his office, was co-opted as a director on 8th September, 1958. An objection was raised by one of the Directors appointed by

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