1. In the company petition filed under sections 397, 398, 402 and 403 of the Companies Act, 1956 (‘the Act’) at the instance of the petitioners/respon- dents collectively holding 47.32 per cent of the issued, subscribed and paid up capital of M/s. New Tirupur Area Development Corporation Limited (‘the Company’), on account of certain alleged acts of oppression and mismanagement in the affairs of the Company, the applicant/first respondent has come out with the present application under regulation 44 of the Company Law Board Regulations, 1991 to restrain the Company from holding any board meeting on 27-7-2007 at Tirupur and considering the matters in relation to - (a) appointment of the internal auditors of the Company; and (b) approval of directors’ and officers’ liability insurance policy for the Company, being the reserved matters as defined under clauses 197(h) & (p) of the articles of association of the Company, in support of which Shri Sudipto Sarkar, learned Senior Counsel submitted as under :—

uThe board meeting of the Company has been proposed at Tirupur in complete disregard and contravention of the articles of association. Clause 190 of the articles provides that the board meetings of the Company will be held primarily either at Chennai or Mumbai, or at such other place as may be mutually decided upon by the board of directors. The purported reason being furnished for holding the board meeting at Tirupur is that the annual general meeting of the Company was being held at Tirupur on the same day, namely, 27-7-2007. It cannot be merely said that the decision regarding the annual general meeting will be applicable for the board meeting as well, in the light of the restriction prescribed in the articles. This reason of the Company is totally untenable and cannot be the basis for violating the terms of the articles of association of the Company.

uThe applicant’s nominee, on receipt of the notice for the proposed board meeting at Tirupur, pointed out the requirement of the articles of association for a decision on the venue of the board meeting, and the past resolutions made by the board of directors regarding the circulation of a draft of the prior board minutes, which came to be discussed by the Company Secretary, in terms of the e-mail correspondence exchanged in this behalf. The Company Secretary in violation of the earlier board resolution, notified the board meeting for 27-7-2007 at Tirupur, which is not permissible under the articles. The e-mail correspondence dated 22-5-2007, 23-5-2007, 24-5-2007, 29-6-2007 and 31-7-2007 from the Company Secretary to the nominee director of the applicant showing that directors agreed to hold the next board meeting at Tirupur contemporaneous with the annual general meeting at Tirupur in July and that the decision to fix the date of annual general meeting as well as the board meeting was delegated to the managing director are belied by the minutes circulated by the same Company Secretary, where there is no discussion regarding the venue and date of the next board meeting, much less, any resolution by the board to hold the meeting on 27-7-2007 at Tirupur.

uItem No. 8 of the minutes of board meeting dated 27-4-2007 reveals that the managing director has been authorised to convene the annual general meeting at Tirupur on a convenient date in consultation with the Chairman. The minutes do not speak anything about convening of the board meeting at Tirupur. The board of directors at the last board meeting held on 27-4-2007 never decided anything regarding the date and venue of the next board meeting. The board meeting was scheduled for 27-7-2007 without seeking consent of the applicant’s nominee. The minutes of the board meeting dated 27-4-2007, as circulated by the Company, does not even indicate that the venue of the board meeting at Tirupur was mutually agreed or even discussed. No consent was sought for or given by the applicant’s nominee director to hold the board meeting at Tirupu