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High Court Of Calcutta
A. N. SEN, S. C. GHOSH
DEBI JHORA TEA CO.LTD - Appellant
Versus
BARENDRA KRISHNA BHOWMICK - Respondent
Application In Appeal 107 Of 1977
Decided On : 02/22/1979
COMPANIES ACT - Sections 397, 398, 402, 403 and 406 - Application under - Stay of order passed by Salil K. Roy Chowdhury J. - Order of stay modified - Special officer appointed by the learned trial judge to be present at each board meeting of the company as an observer - He will have no right to participate in the deliberations of the board meeting or to cast any vote in the same - Order of the learned trial judge superseding the board stayed in its entirety and the board will continue to function in the usual way - If at any such board meeting, there is any dispute between the members of the board, all such disputes should be referred to the special officer, who will be present at such board meeting as observer, and the special officer will submit a report to the court with his comment.
Fact of the Case:
The petitioners in the instant application are holders of, in the aggregate, 1,806 equity shares and claim that the members of the family of petitioners Nos. 1, 2 and 4 also hold considerable part of the shares in the company. The petitioners also claim to have the support of one Sunil Kumar Ray stated to be the largest single shareholder of the company holding 4,800 fully paid up equity shares. Members of the family of Sunil Kumar Ray also are stated to be holders of 1,500 equity shares in the company and Rabindra Nath Sen Gupta and members of the family are stated to be holders of 2,145 equity shares in the company.
Finding of the Court:
The court held that the order of the learned trial judge superseding the board was stayed in its entirety and the board will continue to function in the usual way. If at any such board meeting, there is any dispute between the members of the board, all such disputes should be referred to the special officer, who will be present at such board meeting as observer, and the special officer will submit a report to the court with his comment.
Issues: Whether the order of the learned trial judge superseding the board was valid.
Ratio Decidendi: The court held that the order of the learned trial judge superseding the board was stayed in its entirety and the board will continue to function in the usual way. If at any such board meeting, there is any dispute between the members of the board, all such disputes should be referred to the special officer, who will be present at such board meeting as observer, and the special officer will submit a report to the court with his comment. The court held that the order of the learned trial judge superseding the board was stayed in its entirety and the board will continue to function in the usual way. If at any such board meeting, there is any dispute between the members of the board, all such disputes should be referred to the special officer, who will be present at such board meeting as observer, and the special officer will submit a report to the court with his comment.
Final Decision: The court dismissed the application with costs.
( 1 ) THIS application has been made in the appeal that is now pending from an order made in an application under Sections 397, 398, 402, 403 and 406 of the Companies Act, 1956, in the Company Petition No. 392 of 1975. The said company petition was made in regard to the affairs of Debijhora Tea Company Ltd. (hereinafter referred to as the " said company") and was disposed of by the judgment and order passed by Salil K. Roy Chowdhury J. on March 31, 1977.
( 2 ) IN the interlocutory application made in the appeal for stay of the said order under appeal, dated March 31, 1977, passed by Salil K. Roy Chowdhury J. , superseding the board of directors of the company and appointing Mr. T, P. Das as special officer, the appeal court on April 6, 1977, passed, inter alia, the following orders :" The Court: The order of the learned trial judge will remain stayed subject to the following modifications : 1. The special officer, Mr. T. P. Das, appointed by the learned trial judge at the remuneration fixed by him will be present at each board meeting of the company as an observer. He will, however, have no right to participate in the deliberations of the board meeting or to cast any vote in the same. 2. The order of the learned trial judge superseding the board is stayed in its entirety and the board will continue to function in the usual way. If at any such board meeting, there is any dispute between the members of the board, all such disputes should be referred to the special officer, who will be present at such board meeting as observer, and the special officer will submit a report to the court with his comment. "
( 3 ) BY another order dated March 14, 1978, thcoriginal appellants Nos. 3, 4 and 5, Bimal Kumar Hoare, Nirendra Nath Bagchi and Samarendra Nath Sen Gupta were transposed from the category of appellants to the category of respondents. Out of them, Bimal Kumar Hoare and Samarendra Nath Sen Gupta are two of the petitioners in the instant application. Mr, T. P. Das, the special officer, has been acting in terms of the above-mentioned order dated April 6, 1977.
( 4 ) THE total paid up capital of the company is Rs. 4,62,964. 81 consisting of 30,000 fully paid up equity shares of Rs. 15 each. The value of the shares forfeited stand at Rs. 12,964. 82. The petitioners in the instant application are holders of, in the aggregate, 1,806 equity shares and claim that the members of the family of petitioners Nos. 1, 2 and 4 also hold considerable part of the shares in the company. The petitioners also claim to have the support of one Sunil Kumar Ray stated to be the largest single shareholder of the company holding 4,800 fully paid up equity shares. Members of the family of Sunil Kumar Ray also are stated to be holders of 1,500 equity shares in the company and Rabindra Nath Sen Gupta and members of the family are stated to be holders of 2,145 equity shares in the company.
( 5 ) THE annual general meeting of the company for the year 1974-75 was convened to be held on 27th December, 1975, at 12-30 p. m. at the registered office of the company. One of the agenda of the said meeting was that the petitioners Nos. 3 and 4 in the instant application who were two of the retiring directors were eligible for re-election at the meeting. On December 14, 1975, the secretary of the company issued notice under Section 257 (1) (a) of the Companies Act intimating that three nomination papers, namely, by Bela Devi, Kartick Acharya and Dilip Kumar Ghosh signifying their intention to propose the names of Sukumar Ray, Sarajit Kumar Bagchi and Sunil Kumar Ray, respectively, for appointment as directors of the said company at the proposed annual general meeting due to be held on December 27, 1975, had been filed. In the Company Petition No. 392 of 1975, an interim order was passed by Salil K. Roy Chowdhury J. , that the above-mentioned annual general meeting would be held only for the purpose of adjournment and in terms of the said order, the said meet
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