They also produced materials to show that Sunil Kumar Ganguli who, according to the defendant, had ceased to be a director with effect from August 31, 1964, companytinued to be a director of the companypany.
Since about October, 1953, the Jagan Mohan group has been in the management of the G. L. group and Kishorilals group has been in management of the M. J. group.
The plaintiff further stated that the defendant, Ram Autar Jalan, was wrongfully claiming to be a director of the companypany and was professing to act as such since August 31, 1964.
The learned judge then refers to the order of Mitra J. passed on June 27, 1966, in the companypany petition, authorising the defendant to operate the account in the United Commercial Bank and takes the view that if an order is passed restraining the defendant from functioning as a director, such an order will companye into companyflict with the order of Mitra J. dated June 27, 1966.
On June 20, 1966, the companypany judge had appointed the official liquidator as the special officer of the companypany.
196 of 1967 is number a final order and hence the party is number entitled to the grant of a certificate.
Civil Appeal No.
Accordingly, 1,000 fully paid up shares of Rs.
The bank, by its letter dated September 12, 1966, ultimately furnished to the respondent a companyy of an extract of the resolution of the companypany dated August 31, 1964, which had been furnished to them and on the basis of which Ram Autar Jalan was operating the bank accounts.
The learned judges companysider the claim made by the defendant about his having become a shareholder and appointed as a director and also the case of the plaintiff that such a claim cannot be recognised in view of the articles of association and the registers of the companypany produced by it.
It is the plaintiffs case that the defendant did number hold, on August 31, 1964, any shares in the companypany, number has the defendant obtained any shares till the date of the suit.
In the suit he further asked for rectification of the share register of the companypany by including his name as a shareholder of the companypany.
Thereafter, Kishorilal was appointed the managing director of the companypany.
The management of the M. J. Group was directly companytrolled by Kishorilal and the G. L. Group was being companytrolled by the defendant under the instructions of Kishorilal.
The defendant being a shareholder and a lawfully elected director of the companypany, cannot be restrained by any injunction, as asked for by the plaintiff.
The letter dated December 19, 1964, to the Chief Inspector of Mines, sent by the defendant and which, according to him, had been sent to Kishorilal Goenka has been adverted to by the learned judges and they are of the view that the companyy of the letter sent by the Chief Inspector to Kishorilal does number refer to the defendant as a director of the companypany.
The learned judges refer to the order of Mitra J, dated June 27, 1966, and advert to the fact that because of this order the plaintiff has companyfined the relief of injunction only to restraining the defendant from acting as a director.
The board, by resolution of that date, authorised the opening of a bank account with the United Commercial Bank Ltd., Burrahbazaar Branch, Calcutta, and authorised Bhagwati Debi, director, to operate the account singly.
About September 2, 1945, Kishorilal was appointed managing agent but from about December 26, 1950, the companypany ceased to appoint managing agents.
Kishorilal Goenka, in order to facilitate the grouping of the companylieries, suggested that the defendant should be a director of the companypany and that 1,000 shares out of the shares held by the defendants sister, Bhagwati Debi, were to be transferred in the name of the defendant.
5 relating to share numbers 48001 to 49000 and that he is a director of the companypany since August 31, 1964.
The said Harishankar Goenka has instituted Suit No.
A companysideration of this question will also involve the subsidiary aspect, namely, whether Sunil Kumar Ganguli ceased to be a director on August 31, 1964, because it is the claim of the defendant that it was in the place of Sunil Kumar Ganguli that he was elected as a director.
At the board meeting held on August 31, 1964, Bhagwati Debi transferred the said shares in the name of the defendant by a deed of transfer dated October 30, 1963.
The defendant opposed the application for injunction on various grounds by his companynter affidavit dated July 19, 1966.
Regarding the companytention of the plaintiff that the defendant had number acquired and did number possess the necessary share qualification, the learned judge disposed of it by stating that it was a question of fact.
The learned judge then proceeded to companysider the de facto claim made by the defendant of having acted as a director from 1964 and held that it was very improbable that Kishorilal would number have known about this till 1966, as claimed by him.
The learned judges also refer to the return, dated April 4, 1966 regarding the appointment of Nav Rattan Goenka as a director on December 28, 1965, and this return was signed by Sunil Kumar Ganguli, as a director.
Harishankar filed Company Application No.
Certificate No.
At that meeting in the place of one Hari Shankar Mahesheka, the board companyopted Sunil Kumar Ganguli as a director of the companypany and he was authorised to operate the bank account with the Bank of India Ltd. At the board meeting on August 31, 1964, the directors who were present were Kishorilal Goenka, Bhagwati Debi, Parameshwari Debi and Sunil Kumar Ganguli.
5, were transferred by Bhagwati Debi to the defendant on October 30, 1963.
According to the plaintiff, since the last return filed by it before the Registrar of Joint Stock Companies, there has been numberchange in the board of directors which companyprised of Kishorilal Goenka, Parameshwari Debi Goenka, Nav Rattan Goenka, Bhagwati Debi and Sunil Kumar Ganguli.
In support of this companyclusion the learned judges rely upon the minutes, dated August 31, 1964, produced by the companypany wherein there is numberresolution appointing the defendant as a director.
When Jagan Mohan Goenka ceased to be a director, his wife, Bhagwati Debi, became a director.
It was further stated by the plaintiff that Article 104 of the articles of association of the companypany deals with the qualifications of a director.
147 of 1966 for winding up the plaintiff company.
It may be stated here that the plaintiff was the companypany, Coal Products P Ltd., and the plaint was verified by Basudev Jhajharia, the manager and as such the principal officer of the companypany.
On or about March 1, 1952, Jagan Mohan Goenka, brother of Kishorilal, ceased to be a director and also a shareholder as he had transferred his shares.
He further claims an injunction restraining the companypany and Kishorilal from interfering with his right to act as a director and shareholder of the companypany and also asks for damages.
A further companymunication was sent on December 19, 1964, by the defendant, as a director of the companypany, to the Chief Inspector of Mines, in respect of which certain information was asked for from the M.J. group companyliery, which was under the companytrol of Kishorilal.
196 of 1967.
The defendant has been and companytinues to be a shareholder of the companypany, holding 1,000 fully paid up shares since October 30, 1963.
For this purpose the learned judges rely on the returns filed by the plaintiff before the Registrar of Joint Stock Companies on June 30, 1965.
In or about 1952 the management of the companylieries was divided between two groups, which, for the sake of companyvenience, may be called the G. L. group and the M. J. group.
15,10,000 is stated to have been fully paid and subscribed.
573 of 1966 for an injunction restraining the companypany and its directors, including Kishorilal, from companyducting the board meeting scheduled to take place on September 12, 1966.
10 each, bearing numbers 48001 to 49000, companyered by Certificate No.
In support of their claim for injunction, the plaintiff produced before the learned trial judge the registers of the companypany to establish that the defendant was number a shareholder and that he has never been appointed a director.
1272 of 1966 in the Calcutta High Court challenging the issue of new shares by Kishorilal in his name and in the names of his wife and son, Nav Rattan Goenka.
The learned judge further proceeds to state that as the defendant has been functioning as a director from August 31, 1964, the balance of companyvenience is for permitting him to companytinue as such.
The learned judge referred to the allegations made by the defendant charging Kishorilal with various fraudulent acts, including tampering with the books of the companypany.
The learned judges also accept the case of the plaintiff that Ganguli companytinued to be a director of the companypany even as late as June 30, 1965.
He has also obtained an order of injunction of June 27, 1966, restraining Kishorilal, Parameshwari Debi and Nav Rattan Goenka from exercising any rights or powers in respect of the new shares so issued.
The grounds of opposition were as follows Basudev Jhajharia is number the manager number the principal officer of the companypany and, as such, he is number entitled to institute the suit.
the G. L. Group and the M. J. Group.
On June 27, 1966, the companypany judge gave certain further directions in which it is stated that the account in the Bank of India shall be operated by Kishorilal and Nav Rattan Goenka as it is being done number the account in the United Commercial Bank shall be operated by Ram Autar Jalan in the same manner as it is number being done .
referred to certified companyies of the returns filed by the companypany with the Registrar of Joint Stock Companies, West Bengal, from which the names of the shareholders and the names and particulars of the directors of the companypany will appear.
The directors of the companypany are Kishorilal Goenka, Parameshwari Debi Goenka, Bhagwati Debi Goenka and Ram Autar Jalan defendant .
On September 10, 1966, the appellant before us instituted in the City Civil Court, Calcutta, Title Suit No.
The registered office of the companypany is at Victory Colliery, in West Bengal.
164 of 1966 for the appointment of a provisional liquidator and for other reliefs, in the said companypany petition.
Therefore, it was averred that even if the defendant had been appointed as a director on August 31, 1954, as claimed by him, inasmuch as he had number acquired the qualification shares within two months, the defendant should be treated as having vacated the office of a director.
From the stand taken by the defendant it is clear that he i claims to have 1,000 shares transferred by Bhagwati Debi in his favour by a transfer deed on October 30, 1963, and that he lodged the same with the companypany for effecting the necessary changes in its registers ii that Sunil Kumar Ganguli, who was a shareholder and director till August 31, 1964, transferred on that date his entire holding of 500 shares in favour of the defendants sister, Bhagwati Debi, and, as such, S.K. Ganguli ceased to be a director iii that at the board meeting held on August 31, 1964, the defendant was appointed as director in the place of Ganguli and iv that the various companymunications referred to by him will establish that he has been acting as a director from August 31, 1964.
Though the bank appears to have declined to give this information, later on, by its letter dated September 12, 1966, the bank furnished the plaintiff with a companyy of the resolution which had been furnished to it at the time of opening of the account.
The authorised capital of the companypany is Rs.
On September 12, 1964, the Registrar of Joint Stock Companies, West Bengal, was intimated about the appointment of the defendant as director on August 31, 1964.
196 of 1967.
The short facts leading up to Civil Appeal No.
On November 21, 1966, the present appellant instituted Suit No.
1871 of 1966.
Civil Appeal No.
The High Court refused to grant the certificate on the ground that the order dated March 1, 1968, in Appeal No.
On September 2, 1964, the Chief Inspector of Mines, Dhanbad, was informed about the defendant having been appointed as a director in the place of Sunil Kumar Ganguli on August 31, 1964.
Only directors have power under Article 131 9 of the articles of association to institute legal proceedings on behalf of the companypany and the directors have numberpower to delegate their authority.
Kishorilal Goenka, the managing director, informed the defendant that the transfer of the shares in his name had been effected in the books of the companypany and that the share certificate would be forwarded in due companyrse but the defendant had number received from the companypany the said certificate in spite of the promise made by the managing director.
The sending of the said companymunication, by the Chief Inspector of Mines, to the M.J. group credits Kishorilal with knowledge of the defendant functioning as a director of the companypany.
While accepting the fact that the register of shareholders of the companypany, produced by the plaintiff, is undoubtedly prima facie evidence of matters directed or authorised to be stated therein under Section 164 of the Companies Act, the learned judge stated that he did number companysider it proper to rely entirely on that prima facie evidence in this case and to act on the same.
Prior to August 31, 1964, one Sunil Kumar Ganguli was a director of the companypany holding 500 equity shares of Rs.
The plaintiff further alleged that the defendant had been wrongfully and without any authority purporting to act as the director of the companypany and had been wrongfully dealing with the funds and interfering with the management of the plaintiff by opening bank accounts in the name of the companypany and operating the same, which acts, according to the plaintiff, were detrimental and prejudicial to the interests of the plaintiff.
1412 of 1968 is directed against the order of the Division Bench in Appeal No.
1413 of 1968 is directed against the order of the said Division Bench refusing to grant a certificate for leave to appeal to this companyrt against the decision in Appeal No.
On September 29, 1964, a lease deed was executed by the defendant, as director on behalf of the companypany in favour of the Coal Mines Labour Housing Board.
The learned judges are also of the view that there is numberdelay in the institution of the suit as the plaintiff knew about the defendant claiming rights as a director only as per the letter dated September 12, 1966, of the United Commercial Bank.
10 each.
The minutes of the board meeting dated October 30, 1963, produced by the plaintiff showed that the said meeting was attended by Kishorilal Goenka, Bhagwati Debi and Parameshwari Debi.
Sunil Kumar Ganguli, to the knowledge of Kishorilal, transferred, by a deed dated August 31, 1964, his shares in favour of Bhagwati Debi Goenka and upon such transfer he ceased to be a member and, companysequently, a director of the companypany.
On June 20, 1966, Harishankar Goenka, son of Bhagwati Debi, filed Company Petition No.
She also appears to have obtained some interim orders on August 14, 1968.
5, together with the deed of transfer duly executed in favour of the defendant by Bhagwati Debi and signed by him were lodged by the defendant with the plaintiff companypany for necessary transfer being effected in his name.
10 each, of which Rs.
The defendant held 1,000 shares at the material time.
Another suit has also been brought to our numberice, and that is Suit No.
In or about 1963, Kishorilal Goenka arbitrarily divided the companylieries of the companypany into two groups, viz.,
1412 of 1968 may be stated.
Having due regard to the order of Mitra J., dated June 27, 1966, the learned judges have granted an order of interim injunction in terms of prayer g with the modification that the defendant will be at liberty to operate the banking accounts in terms of the order dated June 27, 1966.
The respondent company was incorporated in or about August 25, 1945, under the Indian Companies Act, 1913.
20,00,000 divided into 2,00,000 ordinary shares of Rs.
On the same day, the plaintiff filed an application in the suit asking for an injunction restraining the appellant from, in any manner, operating the current account in the name of Coal Products Private Ltd. in the United Commercial Bank Ltd., Burrabazaar Branch, Calcutta, and also for an injunction restraining him from acting as a director and dealing with the funds of, or using the seal or otherwise interfering in the management of the companypany, till the disposal of the suit and also for other reliefs.
The respondent herein instituted, on the Original side of the High Court of Calcutta, on September 12, 1966, Suit No.
The plaintiff ultimately sought in the suit reliefs by way of perpetual injunction against the defendant restraining him from acting as director and from operating bank accounts or dealing with the funds of the companypany or using the seal or otherwise interfering with the management of the plaintiff company.
2103 of 1968 filed by Bhagwati Debi in the High Court, against the companypany and its directors.
At the meeting of the board held on August 31, 1964, the defendant was appointed a director in place of the said Sunil Kumar Ganguli and since that date he has been a director and acting as such, to the knowledge of Kishorilal.
The companypany owned four companylieries, companypendiously known as Victory Collieries.
The learned trial judge was number prepared, at this stage, to accept the companytention of the defendant regarding the companypetency of the suit, as that question will have to be decided at the trial.
The fourth suit is the present suit, filed by the companypany on September 12, 1966.
On August 31, 1964, another resolution was passed authorising the opening of the current account in the United Commercial Bank Ltd., empowering the defendant and Bhagwati Debi to operate the said account, singly and severally.
The plaintiff also produced companyy of the letter addressed by it on June 28, 1966, to the United Commercial Bank asking for information as to how a bank account was opened in the name of the companypany and how it was being operated by the defendant.
They have two sons, Uma Shankar Goenka and Hari Shankar Goenka.
The defendant to the action is Ram Autar Jalan, the appellant before us.
Kishori Lals wife is Parameshwari Debi and their two sons are Shiv Rattan Goenka and Nav Rattan Goenka.
The plaintiff further averred that the defendant was neither appointed as a director in any meeting of the companypany, number companyopted as a director of the companypany and the claim of the defendant came to be known by the plaintiff only in or about August September, 1966.
The respondent company, after setting out the particulars about the incorporation of the companypany, its authorised capital, etc.,
The numberinated owner, under Section 76 of the Mines Act, for G. L. group was also intimated to be the defendant.
2304 of 1966 in the Calcutta High Court against the companypany, Kishorilal and Bhagwati Debi for a declaration that he is the holder of a thousand ordinary equity shares of the companypany, represented by Certificate No.
Vaidialingam, J. These appeals, by the defendant in the suit companycerned, arise by special leave, out of the orders passed by the Division Bench of the Calcutta High Court dated March 1, 1968, and March 25, 1968, respectively.
His claim was that, though he was a director of the companypany, numbernotice had been given of the board meeting for September 12, 1966, and he came to know about the meeting from his sister, Bhagwati Debi, who received a numberice on September 9, 1966.
On June 20, 1966, Hari Shankar Goenka filed an application for winding up of the companypany and an interlocutory order was made by Mitra J. on June 27, 1966.
The United Commercial Bank Ltd. was furnished, on September 28, 1964, with a certified companyy of the resolution dated August 31, 1964, appointing the defendant as a director of the companypany and also authorising the opening of an account in the said bank in the name of the companypany and further authorising the defendant and Bhagwati Debi, directors of the companypany, to operate the said account, singly and severally.
The respondent, on companying to know that the appellant was acting as a director of the companypany, asked for information, on or about June 28, 1966, from the United Commercial Bank as to how Ram Autar Jalan was operating the bank account on behalf of the companypany.
