The chairman's decision at a company meeting, if made in good faith, is prima facie final and conclusive. Shareholders have the right to split their votes between proxies.

( 1 ) THIS is an application by the plaintiff for an injunction to restrain the first defendant, Fort Gloster Jute Manufacturing Company Ltd. , from acting upon and communicating to the Central Government the resolutions purported to have been passed in the meeting of the defendant Company, Port Gloster Jute Manufacturing Company, Ltd. , held on 16-3-1954.

( 2 ) THE tussle is over- the Managing Agency of this Company. The main issue in this controversy relates to the transfer by sale of the total interest of ordinary share-holders in Kettlewell Sullen and Co. Ltd. , the present Managing Agents, to Messrs. Mugneeram Bangur and Co. Kettlewell Sullen and Co. Ltd. , has been the Managing Agent of the defendant Company for a long time. Some share-holders are in favour of such sale of the shares of Kettlewell Bullen and Co. Ltd. , and others against it. There are allegations that they are being sold at a fabulous price which allegations are denied. Rivalry between Lala Lakshmipat Singhania and Messrs. Mugneeram Bangur and Co. is alleged to be the main motive of these proceedings.

( 3 ) AT the moment the present controversy relates to a meeting of the share-holders where it was decided that such transfer should be made. The actual resolution before the Company was:"that the proposed sale of the 100 per cent. interest of the ordinary share-holders in Kettle-well Bullen and Co. Ltd. , the Managing Agents of the Company to Messrs. Mugneeram Bangur and Co. , of 7 Lyons Range, Calcutta, be and is hereby approved and that the Directors be and are hereby authorised to notify the Managing Agents of this Company's approval of such sale. "

( 4 ) AT the meeting of 16-3-1954, the Chairman declared the resolution passed with 1164 votes for, and 313 votes against. The voting was not by a show of hands but by a poll.

( 5 ) THE suit filed by the plaintiff challenges this result of the meeting. Its main ground for the challenge, is that the Chairman of the Company and Directors of the Company in collusion with the scrutineers fraudulently. rejected certain proxies, a list of which is set out in Paragraph 18 of the petition. It is the case of the plaintiff that such rejection was improper and illegal. The main point of submission on the allegation of improper and illegal rejection of proxies is not concerned, however, with any alleged fraud or conspiracy, and the, learned Advocate-General appearing for the plaintiff applicant rightly conceded before me that he was not pressing the question of fraud or conspiracy at this stage of the interlocutory application. Obviously that was the correct approach because no question of fraud and conspiracy can be tried on mere affidavits on an application. The. learned Advocate-General contended that he was putting his client's case, only on a point of law. The point of law on which he says the rejection of the proxies was illegal must, therefore, be briefly set forth.

( 6 ) THE Allahabad Bank Nominees Ltd. , and the Bank of India Ltd. , were the holders of 256 shares and 1735 shares respectively. In respect of their holdings the Allahabad Bank Nominees Ltd. , gave two proxies, one to the applicant for 50 and the other to the Directors of the Company for 206, and the Bank of India gave two proxies, one to the applicant for 85 and another to the Directors of the Company for 1650 Ordinary Shares and 61 preference shares. It is the applicant's case that the votes of a share-holder could not be split up in that manner and all should have been rejected but notwithstanding the same the Chairman wrongfully and illegally rejected the proxy given by the Bank of India Ltd. , in favour of the applicant and wrongly accepted those in favour of the Resolution. The Chairman also, it is contended, wrongly accepted all the votes cast under the two proxies given by the Allahabad Bank Nominees Ltd. On behalf of the Company it is stated that the Allahabad Bank Nominees Ltd. , is the holder of 196 shares and gave