The main legal point established in the judgment is that every member of a company has an inherent right to attend and vote at the meeting, which cannot be restricted except by the provisions of the Companies Act. The court found that Regulation.47 of the 1966 Articles of Association, which restricted the voting rights of members, was violative of the provisions of the Companies Act and therefore, void.

Headnote:
Companies Act - Oppression and Mismanagement - S.397, S.398 - S.399(4) - S.87, S.172(2), S.181, S.182, S.25, S.29, S.166, S.167(1), S.169(1), S.171(2)(i), S.176 - Table C of Schedule I - Regulation.47 of 1966 Articles of Association - Voting rights of members - Validity of Regulation.47 - Company limited by guarantee - Voting rights of members - Right to attend and vote at general meeting - Restrictions on voting rights - Inherent right of members to attend and vote at meeting - Voidness of Regulation.47
Fact of the Case:

Company Petition No. 10 of 1970 was filed under S.397 and 398 of the Companies Act, 1956, by two members of the Aruvipuram Sree Narayana Dharma Paripalana Yogam known as S.N.D.P. Yogam, for prevention of oppression and mismanagement by the General Secretary of the Yogam, Sri. M.K. Raghavan. The petition was filed after the petitioners obtained the necessary authorization from the Central Government under S.399(4) of the Companies Act, 1956. The learned single judge allowed the petition and appointed two Advocates of the court as Administrators for carrying on the affairs of the Yogam and to convene a general meeting of the Yogam in accordance with the 1966 Articles of Association and to conduct the election of the Board of Directors and get transacted all other items of business which under the articles have to be transacted at the annual general meeting.
Finding of the Court:

The court found that Regulation.47 of the 1966 Articles of Association, which restricted the voting rights of members and prevented all the shareholders of the Yogam from participating in the ordinary general meeting or in the extra-ordinary general meeting, was violative of the provisions of Table C of Schedule I and the provisions of the Companies Act. The court declared Regulation.47 in Ext. P1 void and allowed the appeal to the extent of modifying the decision of the learned single judge.
Issues: The main issue was the validity of Regulation.47 of the 1966 Articles of Association, which restricted the voting rights of members and prevented all the shareholders of the Yogam from participating in the ordinary general meeting or in the extra-ordinary general meeting.
Ratio Decidendi: The court held that every member of a company is entitled to take part in its administration and has an inherent right to attend and vote at the meeting, which cannot be restricted except by the provisions of the Companies Act. The court found that Regulation.47 of the 1966 Articles of Association was violative of the provisions in Table C of Schedule I and the provisions of the Companies Act, and therefore, void.
Final Decision: The court allowed the appeal to the extent of modifying the decision of the learned single judge and declared Regulation.47 in Ext. P1 void. The court also set aside the direction of the learned single judge making the appellant liable for costs in the proceedings before him.

Judgment :-

1. The question for decision in this appeal lies, in a narrow compass.

2. Company Petition No. 10 of 1970 was filed under S.397 and 398 of the Companies Act, 1956, by two members of the Aruvipuram Sree Narayana. Dharma Paripalana Yogam known as S.N.D.P. Yogam, hereinafter referred to as 'the Yogam' for prevention of oppression and mismanagement by the General Secretary of the Yogam, Sri. M.K. Raghavan. The petition was filed after the petitioners obtained the necessary authorisation from the Central Government under S.399 (4)of the Companies Act, 1956

3. The learned single judge allowed the petition and by way of an interim arrangement appointed two Advocates of this court as Administrators for. carrying on the affairs of the Yogam and to convene a general meeting of the Yogam in accordance with the 1966 Articles of Association and to conduct the election of the Board of Directors and get transacted all other items of business which under the articles have to be transacted at the annual general meeting.

4. We are informed that the Administrators have in pursuance to the directions issued conducted an election of the Board of Directors on the basis of the 1966 Articles of Association and they are now in management of the affairs of the Yogam

5. The appellant intervening in the proceedings before the learned single. Judge contended; that Regulation.47 of the 1966 Articles of Association of the Yogam is void and the meeting to be convened for the election of the Board of Directors should be a meeting of all the shareholders of the Yogam which they should have the right to vote. The learned single judge overruled the plea and held that Regulation.47 of the 1966 Articles of Association of the Yogam is valid and directed the election of the Board of Directors in accordance with that provision.

6. The appellant who is aggrieved by this direction of the learned single judge has filed the appeal his contention in the appeal being that Regulation.47 in the 1966 Articles of Association of the Yogam is illegal and void',

7. The Yogam was registered under the Travancore Regulation.) of 1063 (The Indian Companies Act VI of 1812) as an association with limited liability without addition of the word "limited" to its name. According to the Certificate of incorporation of the Yogam, it is an association formed for the purpose of promoting and encouraging religious and secular education and industrious habit: among the Ezhava Community and doing all such other things as are: incidental! or conducive to the attainment of these objects.

8. Ext. P1 contains the Memorandum and: Articles of Association of the: Yogam as amended in 1966. Prior to the election of the Directors in the meeting convened by the Administrators appointed by the learned single judge, the annual general meeting wherein the Board of Directors were elected was held on 19-3-1966. The next annual general meeting which, was held on 29-10-1967 had to be dispersed without transacting any business as it turned out to be violent. Thereafter it was not possible to hold any general meeting in view of the disputes between the parties which necessitated the filing of the petition under S.397 and 398 of the Companies Act, 1956. The qualification to become a member of the Yogam is that a person should take at least one share, the face value of which is Rs. 5/-.

9. There was an amendment of the Articles of Association of the Yogam at its extraordinary general meeting held on 27-3-1948. The Articles of Association were again amended at the extra-ordinary general meeting of the Yogam held on 19-3-1966. Ext. P1 contains the Articles of Association of the Yogam as amended on 19 31966. Regulation.45 of the 1948 Articles and Regulation.47 of the 1966 Articles deal with the constitution of the general meeting of the Yogam. Regulation.47 of the 1966 Articles of Association provides that the general meeting is only a meeting of some representatives of the Yogam while according to Regulation.48 of t

Click Here to Read the rest of this document