Company having had office at Coimbatore as such Court at Coimbatore is competent to entertain the suit.

(PRAYER: Revision filed against the orders dated 16.08.1999, made in I.A.Nos.452, 453/1998 in O.S.No.541/1998 on the file of the Principal Sub Court, Coimbatore.)

Common Order

These revisions are directed against the orders of Principal Subordinate Judge, Coimbatore made in I.A.Nos. 452, 453/1998 in O.S.No.541/1998, allowing the petition filed by the Plaintiff to implead D-6 individually and in his Representative Capacity for all other shareholders and regarding the territorial jurisdiction of the Court at Coimbatore. The Defendants 1 and 2 are the Revision Petitioners.

2.Necessary facts for the disposal of this revision could briefly be stated thus :

O.S.No.541/1998:-

The first Defendant – M/s.Chennimalai Yarns Private Limited has been carrying on business at Chennimalai and having its registered office at Coimbatore. Defendants 2, 3 and 4 are the Directors of the D-1 company; D-5 is the former Director of the company and a share holder. D-6 is also a share holder in D-1 company. Case of the Plaintiff is that he is the Managing Director of D-1 company and has been so appointed for a period of five years. The company has made borrowings from Tamil Nadu Industrial Investment Corporation Limited, State Bank of India, M/s.Fidelity Finance Limited and other financiers. D-1 company is heavily indebted. The Plaintiff has furnished his properties as security for the loan obtained by D-1 company. The Plaintiff's wife has also furnished her property as security for the loan borrowed by the D-1 company. While so, with a view to defeat the lawful claim of the Plaintiff. On 15.05.1998 the Defendants 2 to 5 have adopted a Resolution to the effect of removing the Plaintiff from the office of the Managing Directorship of D-1 company. The Plaintiff has alleged that the Resolution is not true and invalid under law. The Defendants are also making arrangements in bringing about another General Body Meeting on 24.06.1998 to remove the Plaintiff from Directorship. Plaintiff has filed the suit to declare the impugned Resolution dated 15.05.1998, that sought to remove the Plaintiff as Managing Director of the first Defendant, as null and void and also for a Decree for Permanent Injunction restraining the Defendants 2 to 6 from holding the Extraordinary General Body meeting on 24.06.1998 and also restraining the Defendants 2 to 6 from incurring any further liability, by borrowing loans or availing further credit facilities from other Defendants.

3.I.A.No.452/1998:- In the said suit, I.A.No.452/1998 was filed to implead D-6 in his Representative Capacity for all other shareholders. According to the Plaintiff, D-1 company has several shareholders and all the shareholders cannot be individually impleaded in the suit. Hence, for representing the entire General Body of shareholders, the suit has been filed against D-6, who is the shareholder of the company, individually and also representing the entire general body of shareholders. This application has been filed seeking the permission of the Court to sue D-6 in the Representative Capacity (under Or.1 R.8 CPC).

4.This application was resisted by the Defendants 1 and 2 contending that D-6 is a supporter of the Plaintiff and he is biased and he does not have the support of other shareholders. D-6 stands by the Plaintiff and he cannot be the representative of all the shareholders and hence, he cannot be sued in his Representative Capacity.

5.I.A.No.452/1998 was allowed by the trial court finding that the objection regarding the Representative Capacity of D-6 cannot be raised by the Defendants at the initial stage. It was held that whether D-6 represents other shareholders or not could be determined only at the time of trial. Finding that the Plaintiff can sue D-6 for himself and in his Representative Capacity representing the other shareholders, the trial court has allowed the application. Raising serious objection to the maintainability of the suit at Coimbatore, the learned counsel for the Revision Pe