P. K. BAHRI ( 1 ) IN this suit seeking declaration that the plaintiff was and continues to be a director of the defendant company and also for declaring that the plaintiff has not incurred any disqualification under Section 283 (i) (g) of the Indian Companies Act, thereby vacating the office of the director of the defendant-company and for perpetual injunction restraining the defendant from holding that the plaintiff has vacated the office as director and also restraining the defendant from obstructing the plaintiff from discharging his duties and exercising his powers and privileges as a director of the defendant-company, the Plaintiff has moved the application for grant of interim injunction till the disposal of the suit restraining the defendant from holding that the Plaintiff has vacated the office as director and restraining the defendant from obstructing the plaintiff from discharging his duties and exercising his powers and privileges as a director of the defendant company. ( 2 ) I have heard arguments for deciding this application I. A. 1558/91. It is averred in the plaint that the defendant-company was incorporated on July 23, 1985 and the same was promoted by the plaintiff and his son Vijay Bhushan, who formed one group and Harish Chander Bhasin and his associates who formed the other group and that the plaintiff alongwith his associates as well as Harish Chander Bhasin liold not less than 10% of the paid-up equity capital of the defendant-company. It is mentioned that at the time of incorporation of the company it was agreed between the two groups that the management and control of the company would be exercised by the two groups jointly and the two groups will have an equal share in the management of the company and that name of the company was also taken from the first alphabets of the names of the plaintiff and Harish Chander Bhasin. It is then pleaded that Rule 204 (B) of the Memorandum and Articles of Association of the defendant company stipulated nomination by plaintiff and his associates upto maximum of four persons as directors on the Board of Directors of the company. It is then pleaded that the plaintiff was always being intimated by written notice the dates of holding of Board meetings from time to time and plaintiff has. been attending all Board meeting" of which he received a notice in writing till October 1989. It is then pleaded that the plaintiff was always being intimated by written notice the dates of holding of Board meetings from time to time and plaintiff has. been attending all Board meeting" of which he received a notice in writing till October 1989. It is then alleged that sometime in October 19. 89 the relation between the plaintiff and Harish Chander Bhasin became strained as certain differences arose between. the two groups but despite efforts the differences could not be resolved and the discussions in that respect continued in between the period October 1989 and January 1991. It is then pleaded that the plaintiff did not receive any written notice regarding the holding of any meeting of the Board of Directors after October 1989 and had not come to know about holding of any such meeting and in Economic Times dated January 14, 1991, it was published that the defendant was proposing to have a public issue of shares and on making inquiries from the Registrar of Companies the plaintiff learnt that defendant had filed a prospectus for registration in respect of proposed public issue and the said prospectus disclosed the names of the directors which did not include the names of the plaintiff and his son Vijay Bhushan. As such a prospectus in view of the provisions of Companies Act required to be signed by all the directors or their constituted attorneys, Vijay Bhushan in order to ascertain the factual position wrote a letter dated February 13, 1991, to the Registrar of Companies intimating that he had not ceased to be director of the company and the prospectus filed was defective inasmuch as it did not have the signatures of all the directors. It is then pleaded that from the office of the Registrar it was learnt that a statutory form No, 32 had been filed by the defendant intimating the change in the Board of Director s which did not include the names of plaintiff and his son Vijay Bhushan mentioning that they had ceased to be directors on the ground of having incurred a disqualification on account of non-attending three consecutive Board meetings as per provisions of Section 283 (l) (g) of the Companies Act and also in terms of Article 101 of the Memorandum and Articles of Association of the defendant-company. So, it is pleaded that the defendant-company had illegally declared that the plaintiff and his son had vacated the office of directors in asmuch as no notice at anytime of any meetings had been received by the plaintiff for the alleged Board meetings which plaintiff in absence of recetpt of any notice or knowledge could not attend. In the alternative, it is pleaded that the plaintiff has exercised his right under Article 104b by nominating himself and others as directors vide letter dated February l8, 1991, and thus, be has become director of the defendant-company and is entitled to have the injunction on that score in any event. ( 3 ) THE suit as well as the application are hotly contested by the defendant compay. It is pleaded that the plaintiff is guilty of suppression of material facts inasmuch as the plaintiff has not disclosed some important facts and thus, he is not entitled to have the equitable relief of injunction. On merits, it is pleaded that the plaintiff and his son Vilay Bhushan had intentionally and deliberately absented from three consecutive meetings of the Board and thus, had incurred the disqualification under the Companies Act as well as under the Memorandum and Articles of Association of the defendant-company and thus, Board meetings are stated to have taken place after written notices had been served on the plaintiff. It is pleaded that the fourth annual general meeting was held on September 27, 1990, in respect of which the notices were duly issued on August 21, 1990, to all the shareholders including the plaintiff and the plaintiff was fully aware since August 21, 1990, that be had vacated the office as a director on his failure to attend three consecutive Board meetings and by virtue of Section 53 of the Companies Act the plaintiff had notice by operation of law that the balance sheet had been duly signed and filed and that he had ceased to be a director of the company. It is also pleaded that the plaintiff had not signed the balance sheet and had also not participated in the Board meeting for approval of the balance sheet. It is also pleaded that the plaintiff had not signed the balance sheet and had also not participated in the Board meeting for approval of the balance sheet. It is pleaded that the plainstiff very well knew that before convening the Annual General Meeting the Board has to finalise the accounts of the company which has to be signed by the directors andthereafter the same were to be presented in the Annual General Meeting and the Annual General Meeting was duly held on the date fixed and the plaintiff did not attend the said meeting at all and thus, the plaintiff has committed gross delay aid laches in bringing this suit belatedly and thus, does not deserve any injunction. The form under Section 32 was staled to have been filed with the Registrar of Companies on September 19, 1990, showing change in the directors consequent upon the plaintiff vacating the office. It was also pleaded that the paid up capital of the company had aggregate 6,60,900 shares whereas the plaintiff has only 500 shares which constitute O. 075% and his son Vijay Bhushan s shares constitute only O. 015% of the total paid up share capital of the company whereas Harish Chander Rhasin holds 50,100 equity shares. So. it is pleaded that the plaintiff has no sufiicient interesr or state in the defendant company. It is also pleaded that under Article 104b of the Memorandum and Articles of Association, the plaintiff had no authority to nominate any directors inasmuch as the plaintiff and his associates at no point of time commanded 10% holding of the share capital of the company. So, it is pleaded that only in case the plaintiff and his associates fulfilled the prerequisite qualification of holding such share capital that plaintiff could exercise the right to nominate any directors. It is pleaded that the plaintiff is having his own business which is competitive with the business of the defendant and due to his own volition or on account of lack of interest or on account of his own business considerations and/or for reasons best known to the plaintiff, he did not attend the Board Meetings on March 28, June 29, and August 29, 1990, consequtively despite notices being served On him in the same manner as notices were being served earlier of the dates of holding the meetings. It is pleaded that for about 16 months the plaintiff remained silent and it is only on the eve of the public issue and with a view to damage or hurt the said issue that the plaintiff has instituted the present action in a malafide manner. It is also averred that the plaintiff has got published misinformation in the newspapers to narm the public issue of the defendant company and such news appeared in the newspapers "business" and "political Observer" dated February 22, 1991, during the pendency of the suit. It is pleaded that the defendant company, in fact, is issuing public convertible debentures both on right basis by letter of offer and also to the members of public. It is also pleaded that the plaintiff wrongly mentioned in his letter nominating the directors that ,harish Chander Bhasin has also joined in writing the said letter with him which on the face of it is not true. ( 4 ) IN the replication, the plaintiff controverted the pleas of the defendant and reiterated his own pleas, inter alia, pleading. that the defendant had not disclosed as to what manner the notices of the Board meetings in question have been issued and served on the plaintiff. Plaintiff did not specifically controvert that the plaintiff had not attended the Annual General Meeting despite having become aware of the holding of the same and bad not attended the Board Meeting for approving the accounts and for signing the balance sheets. Plaintiff has, however, come out with new facts in the replication that the plaintiff and Harish Chander Bhasin had floated not only the defendant company but also six more companies of which details are given in para 4 of the replication in which also plaintiff and Harish Chander Bhasin and their associates hold not less than 10% of the equity shares. It appears that the plaintiff has been declared to have vacated the office as director in some of those companies in the similar manner as in the present case and the plaintiff has filed certain suits challenging the said act of the defendant company and these suits are pending in the lower courts. It appears thqat as yet the plaintiff has not been able to get any decision from the lower court on his applications seeking interim injunction. It appears thqat as yet the plaintiff has not been able to get any decision from the lower court on his applications seeking interim injunction. ( 5 ) THE learned counsel for the plaintiff has contended that even in the written statement and the reply filed by the defeadant it is not at all made clear as to how and in what manner the notice of the Board meetings have been sent and served on the plaintiff and presumption, if any, arising regarding the minutes of the Board meetings being correctly recorded stands rebutted and prima facie, it should be held that no written notices of the Board meetings have been served on the plaintiff and thus, the plaintiff cannot be deemed to have vacated the office of the director by virtue of Section 283 (1) (g) of the Indian Companies Act. In the alternate, be has contended that before the plaintiff could be deemed to have vacated the office he ought to have been served a show cause notice by the Board of Directors to explain his absence on the three consecutive Board meetings and as the rules of natural justice have been violated by not serving any such show cause notice the defendant could not treat that office of the director has been vacated by the plaintiff. He has placed reliallce on Turnbull v. The West Riding Athletic Club Leeds Limited, 1894 (70) Law Times 92 and Richardson v. Methley School Board, 1893 (3) Law Reporters (Chancery Division) 510. So, he urged that prima facie case being in favour of the plaintiff, balance of convenience is also in favour of the plaintiff and ill case interim injunction is not granted the plaintiff is bound to suffer irreparable loss and so, he has urged that interim injunction should be granted. He has argued that although the plaintiff held minimal share holding yet the plaintiff is the director of the company and was associated with the company from the very beginning and he ought not to have been kept away from the affairs of the company by showing that he had vacated the office of the director. He has urged that in case show cause notice had been issued the plaintiff would have given good explanation for not being able to attend the alleged three Board meetings consecutively. He has urged that in case show cause notice had been issued the plaintiff would have given good explanation for not being able to attend the alleged three Board meetings consecutively. ( 6 ) THE learned counsel for the defendant has, on the other hand, argued that there appears to be no prima facie case in favour of the plaintiff inasmuch as the plaintiff not only not attended the three Board meetings consecutively but had also not attended ;to Annual General Meeting wherein. according to the agenda circulated earlier, a momentus decision was to be taken for inviting public issue and the plaintiff for reasons best known kept himself away from the affairs of the company when he was very well aware that in law if he continued to be a director he was supposed to sign the prospectus for public issue which he had not done and had come to the court only to harm the interest of the public issue. He has further argued that the plaintiff was also aware that a Board meeting has to take place once in three months and he bad remained silent from October 1989, onwards and it would show that the plaintiff was very much aware that he had vacated the office of the director and thus, did not take any interest in the affairs of the company and had belatediy instituted this suit for some ulterior motive. He has argued that there being a presumption with regard to the correctness of the minutes being maintained by the defendant company it should be held prima facie that presumption docs not stand rebutted by mere averment by the plaintiff that. he had not been served with written notices of the Board meetings. He has also argued that there is no requirement of law that any show cause notice was required to be served on the plaintiff before plaintiff could be deemed to have vacated office of the director under provisions of Section 238 (l) (g ). He has placed reliance on Shekhar Mehra v. Kilpest (P) Ltd. and Others. (1986)3 Com. L. J. 234 (MP ). He has also argued that the plaintiff is guilty of laches and thus, is not entitled to have interim injunction and particularly mandatory injunction as interim relief. He has relied on Gobind Pritamdas Malkani v. Amarendra Nath Sircar and Others. He has placed reliance on Shekhar Mehra v. Kilpest (P) Ltd. and Others. (1986)3 Com. L. J. 234 (MP ). He has also argued that the plaintiff is guilty of laches and thus, is not entitled to have interim injunction and particularly mandatory injunction as interim relief. He has relied on Gobind Pritamdas Malkani v. Amarendra Nath Sircar and Others. (1980)50 Company Cases 219 and Life Insurance Corporation of India v. Mrs. Sham Surat Singh and Others, AIR 1983 (Delhi 291. ( 7 ) SECTION 283 (l) (g) lays down that the office of director shall become vacant if he absents himself from three consecutive meetings of the Board of Directors or from meetings of the Board tor a continuous period of three months whichever is longer without obtaining leave of absence from the Board. This particular provision does not contemplate passing of any Board s resolution for showing the office of the director having been vacated by a particular director. It appears that the vacation of the office of director is automatic as soon as director is found to have incurred the disability as contemplated by clause (g ). Section 284 of the Companies Act, however, contemplates removal of a director by passing of Board s resolutions. That provision, in fact, is not applicable where the director vacates office by virtue of incurring disqualifications laid down in Section 283. The case of Turnbull (supra) examined the provisions of Article 70 of the Articles of Association of a company which provided that office of any director should be vacated on five grounds enumerated therein, one of being that director had absented himself from Board meetings for a period of three months. In the said case, the plaintiff was a director and at a meeting of the Board he informed the chairman that he was jointly interested with one "m" in a contract but he did not specify his precise nature or extent of his interest. At a meeting of the Board of which no notice, was given to the plaintiff, a resolution was passed declaring his scat aa director vacated for mfringing Article 70 (e) which prohibits a director from having contracts with the company or be concerned in or participated in the profits of any contract with or work done for the company without declaring his interest. It was this paricular clause (e) of Article 70 which was examined by the Chancery Division and it held that in such a case, the construction must be that something more must be done to render the seat vacant and moreover natural justice requires that director shall have an opportunity of saying what occurs to him on his own behalf. As in the said case, no opportunity of hearing had been granted to the directors before passing the resolution that he had incurred disability under clause (e) of Article 70, so the injunction in favour of the director was granted. The facts of the said case are distinguishable. In case a particular director acts against the interest of the company obviously the rules of natural justice do require that before he is hold guilty of such act. . he should be given an opportunity of hearing. IT would be too much to say that in all the. clauses contemplated under Section 283 where disqualifications are incurred automatically there should be granted an opportunity of hearing to the director before he is deemed to have vacated the office of the director. It is evident that if any director is removed under Section 284 of the Companies Act, a show cause notice is bound to be given to such a director and this was provided in Section 284 itself. Section 283 contemplates vacation of office of the director on various grounds which are given in clauses (1) (a) to (1) (1 ). Clause (k) speaks of removal of the director in pursuance to Section 284. It is evident that when Section 284 itself provides fora show cause notice- being issued before passing a resolution for removing a director, no fresh show cause not ice would be required to be issued for purposes of Section 283 of the Companies Act. IN the case of Richardson (supra), rule 14 in Schedule II, Part I, to the Elementary Education Act, 1870, contemplated that a member of a school board ceases to be a member "if he abseats himself during six successive months from all meetings of the board, except from temporary illness or other cause to be approved by the board. " The question which arose for consideration before the Chancery Division was whether a particular member had incurred the said disqualification or not. " The question which arose for consideration before the Chancery Division was whether a particular member had incurred the said disqualification or not. The plea taken by the member was that he was ill and thus, he justified his absence. It was held that without, however, giving a chance to that member of defending himself he could not have been declared in default and thus, the action of the Board was termed to be illegal. The question whether a particular person has absented himself from meetings of the Board due to any serious illness could be a disputed question of fact and may be in such a situation rules of natural justice have to be abided by before declaring that such a person had incurred the disqualification. SECTION 283 merely makes the disqualification, on a director not attending the three consecutive meetings without obaining leave of absence from the Board. It is not the case of the plaintiff in the present case that he had obtained any leave of absence from the Board. Here the question raised is whether the plaintiff had been served with written notices for attending the Board meetings or not ? There was no question of giving any show cause notice to the plaintiff to explain his position before he could be held to have vacated the office of the director. A broad proposition of law cannot be laid down that before a director incurs the disability as required by Section 283, he must be given a show cause notice or reasonable opportunity of being heard. In the case of Shekhar Mehra (supra), this very provision came up for consideration and it was held that under Section 283 (l) (g), no hearing is requfred to be given to a director whose office has become vacant by reason of his absenting himself as vacation of his office is automatic if absence is proved. It was also held that presumption of due service of notice under Section 53 (2) of the Companies Act is to be drawn. I agree with the law laid down in this judgment and I hold prima facie that no show cause notice was required to be served on the plaintiff before he was deemed to have vacated the office of the director on his failure to attend the three consecutive Board meetings. I agree with the law laid down in this judgment and I hold prima facie that no show cause notice was required to be served on the plaintiff before he was deemed to have vacated the office of the director on his failure to attend the three consecutive Board meetings. In the present case, the fact that the plaintiff took no steps from October 1989 to have any interest in the affairs of the company rather prima facie shows that plaintiff deliberately did not attend the Board meetings which he knew are bound to take place in law once in three montns. Be that as it may, prima facie, it is also clear that the plaintiff did not care to attend the Annual General Meeting where decision was taken for public issue. Plaintiff cannot claim in law that in fact, he was not aware of holding of the Annual General Meeting knowing very well that such notice is also published in newspaper. . So, prima facie, it cannot be said that plaintiff has a prima facie case in his favour. ( 8 ) THE next contention raised by the learned counsel for the plaintiff is that in view of Article 104 (B) of the Memorandum and Articles of Association of the defendant company, plaintiff was within his right to nominate a maximum of four director and he having exercised his right by nominating hinself again as director besides, others could be held to be a director of the company. The said clause reads as follows : "so long as Mr. Harish Chander Bhasin and/or Mr. Bharat. Bhushan and associates hold or continue to hold not less than 10% (ten per cent) of the paid up equity capital of the company from time to time, Mr. Harish Chander Bhasin and/or Mr. Bharat Bhushan shall have the right to nominate upto a maximum of 4 (four) persons as Director or Directors on to the Board of the company. . . . . " ( 9 ) PLAINTIFF had sent a letter to the defendant company mentioning that he and Harish Chander Bhasin and their associates holding 10% of the paid up equity capital and proceed lo nominate the directors including the plaintiff. It is now admitted before me that Harish Chander Bhasin has not joined Bharat Bhushan-plaintiff in writing the said letter. " ( 9 ) PLAINTIFF had sent a letter to the defendant company mentioning that he and Harish Chander Bhasin and their associates holding 10% of the paid up equity capital and proceed lo nominate the directors including the plaintiff. It is now admitted before me that Harish Chander Bhasin has not joined Bharat Bhushan-plaintiff in writing the said letter. So, the question to be decided is whether the plaintiff alone had such an authority when admittedly plaintiff and his associates do not hold 10 per cent of the paid up equity capital. Counsel for the plaintiff would like me to interpret the aforesaid clause to mean that as long as Harish Chander Bhasin alongwith the plaintiff and associates hold 10^ of the paid up equity capital the plaintiff can exercise the right to nominate the directors. It is true that wording of this particular Article is not so happy but it would not be possible to hold that the plaintiff could utilise the equity capital held by Harish Chander Bhasin for his benefit in order to become entitled to nominate the directors. It is only, if, in my opinion, plaintiff and his associates were to hold not less than 10% of the paid up equity capital that plaintiff can nominate the directors and in case Harish Chander Bhasin and his aassociates equity capital is to be taken note of by the plaintiff, then Harish Chander Bhasin must join with the plaintiff for nominating the directors under the said ARTICLE. Prima facie, this appears to be the intention of the parties as could be culled out from the aforesaid language used by the parties in drafting the said Article. ( 10 ) SO, I hold that the plaintiff is not entitled to have any interim injunction till the disposal of the suit. Nothing said by me in this order shall have any effect on the merits of the case which are yet to be decided by this court after holding the trial The application is dismissed.