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1991 DIGILAW 367 (GUJ)

M. G. DOSHIT v. RELIANCE PETROCHEMICALS LIMITED

1991-11-19

R.A.MEHTA

body1991
R. A. MEHTA, J. ( 1 ) THE applicant is a shareholder and member of the respondent Company and he has challenged the validity of the Annual General Meeting of the Company held at Surat on the ground that it is in violation of the provisions of Section 166 of the Companies Act 1956 and has prayed for a declaration of illegality and for declaring all the business transactions at the said meeting as null and void Section 166 (2) of the Companies Act reads as under:"166 Every annual general meeting shall be called for a time during business hours on a day that is not a public holiday and shall be held either at the registered office of the Company of at some other place within the city town or village in which the registered office of the company is situatedprovided that the Central Government may exempt any class of companies from the provisions of this sub-section subject to such conditions as it may impose Provided further that (A) a public company or a private company which is a subsidiary of a public company may by its articles fix the time for its annual general meetings and may also by a resolution passed in one annual general meeting fix the time for its subsequent annual general meetings and (B) a private company which is not a subsidiary public company may in like manner and also by a resolution agreed to by all the members thereof fix the times as well as the place for its annual general meeting. ( 2 ) THE petitioner submits that the Annual General Meeting of the Company must be held either at the registered office of the Company or at some other place within the city town or village in which the registered office of the Company is situated. The registered office of the Company is situated at Village Mora Post Bhatha Surat-Hajira Road District Surat Pin 394 510 Gujarat State. The Annual General Meeting in question was held in Surat city and not in Village Mora Post Bhatha where the registered office of the Company is situated. ( 3 ) ON behalf of the respondent Company it is submitted that there is no breach of Section 166 of the Act. The Annual General Meeting in question was held in Surat city and not in Village Mora Post Bhatha where the registered office of the Company is situated. ( 3 ) ON behalf of the respondent Company it is submitted that there is no breach of Section 166 of the Act. It is not the revenue limits or municipal limits which is required to be taken into consideration but the postal limits of the city are required to be considered and it is submitted that the Post Department has confirmed that Village Mora falls within the postal limits of Surat and reliance is placed on a Central Government Circular dated 16/02/1981 wherein it is clarified that a Company can hold its Annual Meeting at any place within the postal limits of the City where its registered office is situated if it is more convenient to its shareholders. That Circular is produced alongwith part of that Circular reads as follows:"section 166 (2) may taken to mean both the postal limits and local limits of the City in which the registered office of the Company is situated and where the two do not coincide the wider of the two A company can therefore hold its annual general meeting at any place within the postal limits of the city in which its registered office is situated if it is more convenient to its shareholders". It is further submitted that the Senior Superintendent of Post Offices Surat Division Surat has confirmed by letter dated 6/06/1990 (Page 26) that the situation of the registered office of the Company of Village Mora Postal Bhatha District Surat falls within the postal limits of Surat Even previous to this the Company had written a letter to the Ministry of Company Affairs on 9/06/1989 on the basis that the registered office falls within the postal limits of Surat and therefore holding of the Annual General Meeting in Surat would be in order. The Ministry of Company Affairs by their letter dated 26/06/1989 have confirmed the same provided your registered office falls within the postal limits of Surat. In the affidavit-in-rejoinder it is pointed out that the postal limits of Surat City and Surat Division are altogether different. The Ministry of Company Affairs by their letter dated 26/06/1989 have confirmed the same provided your registered office falls within the postal limits of Surat. In the affidavit-in-rejoinder it is pointed out that the postal limits of Surat City and Surat Division are altogether different. The postal limits of the Surat City postal limits of Surat Division are not the same and the Senior Superintendent of Post Offices Surat Division has written to the petitioner by letter dated 16/11/1990 that the area of Bhatha Post office does not fall within the postal limits of Surat City. It is also noted that the Pin Code number of Surat City is 395 001 whereas Bhatha Post Office has the Pin Code No. 394 510. The third digit pinpoints the sorting district which are different in the present case Post Bhatha is in sorting No. 4 whereas Surat is in sorting district No. 5. It is therefore submitted by the petitioner that the postal limits of Surat City also do not cover village BHATHA and therefore the holding of the meeting outside the postal limits of village Bhatha would be violation of Section 166 (2) of the Companies Act. ( 4 ) THE respondent-Company has also raised a preliminary contention that the High Court is a Court of special jurisdiction in the matter of Companies Act and its jurisdiction is limited to certain matters specified under the Companies Act and there is no general jurisdiction over any matter arising under the Companies Act For the purpose of preliminary objection I will proceed on the allegation and assumption that there is violation of Section 166 (2) of the Companies Act and examine the question as to whether the High Court has jurisdiction to grant any relief or pass any orders. ( 5 ) IN the application the only provision cited is Section 166 of the Companies Act and Judges Summons is also said to be under Section 166 of the Companies Act As far as Section 166 itself is concerned it does not contemplate or mention any legal proceedings in any Court Section 10 provides that the Court having jurisdiction under this Act shall be the High Court having jurisdiction in relation to the place at which the registered office of the Company concerned is situate except to the extent to which jurisdiction has been conferred on any District Court or District Courts subordinate to that High Court. This Section speaks only of territorial jurisdiction of the High Court as it provides that the location of the registered office of the concerned Company would determine the territorial jurisdiction. This provision cannot be construed to mean that the High Court has jurisdiction with respect to the matters relating to that company. ( 6 ) SECTION 2 (11) defines the Court which reads as under : the Court means- (A) with respect to any matter relating to a Company (other than any offence against this Act) the Court having jurisdiction under this Act with respect to that matter relating to that company as provided in Section 10; (C) with respect to any offence against this Act the Court of the Magistrate of the First Class or as the case may be a Presidency Magistrate having jurisdiction to try this offences. Therefore we will have to find out which is the Court having jurisdiction with respect to that matter relating to the Company. It is not the case of the applicant that the Civil Court has no jurisdiction in respect of this matter or that the jurisdiction of the Civil Court is implicitly barred. According to the respondent it is only the Civil Court which has the jurisdiction. According to the applicant the jurisdiction would be concurrent both in the Civil Court as well as in the High Court. ( 7 ) UNDER the Companies Act several kinds of questions and matters arise and it is not that all matters are within the jurisdiction of the Central Government; some are within the jurisdiction of the Company Law Boards some are within the jurisdiction of the Companies Tribunal. ( 7 ) UNDER the Companies Act several kinds of questions and matters arise and it is not that all matters are within the jurisdiction of the Central Government; some are within the jurisdiction of the Company Law Boards some are within the jurisdiction of the Companies Tribunal. It is therefore not a correct proposition or law that with respect to any matter relating to a Company in a State the High Court has jurisdiction under the Companies Act with respect to that matter. These words with respect to that matter in Section 2 (11) are crucial. Some illustrative cases can be immediately seen by the reference to the Companies (Court) Rules 1959 ( 8 ) RULE 11 illustrates the matters with respect to which the High Court has jurisdiction. All the 23 items illustrate the jurisdiction of the HIGH COURT CONFERRED BY THE VARIOUS PROVISIONS OF THE Companies Act in respect of specific matters relating to the Companies situated within the jurisdiction. The High Court is a special Court or a Company Court with special company jurisdiction and that jurisdiction has to be found from specific provisions of the Act and the High Court does not have any general plenary or residuary jurisdiction to deal with all matters and all questions arising under the Companies Act. ( 9 ) THE learned Counsel for the applicant has not been able to point out any specific provision under which the High Court has jurisdiction to deal with the present question. ( 10 ) IN the case of Municipal Corporation Ahmedabad v. Premchand Manasukhram 5 GLR 847 the question of jurisdiction was considered in a different context and a classical passage from the case of Wolverhampton New Water Works Co. v. Hawkesford (6 C. B. (N. S.) 336) was quoted. The provision of Section 166 is created by the Companies Act. However for breach of Section 166 no special remedy is provided under the Act and therefore the common law remedy of jurisdiction of the Civil Court would remain and this will fall within the second class of the cases referred to above. The provision of Section 166 is created by the Companies Act. However for breach of Section 166 no special remedy is provided under the Act and therefore the common law remedy of jurisdiction of the Civil Court would remain and this will fall within the second class of the cases referred to above. 12 In view of the above it is to be held that the High Court has no jurisdiction in absence of any specific provision to pass orders in respect of the alleged breach of Section 166 (2) of the Companies Act in the present proceeding which is only for the purpose of Section 166 (2 ). 13 In view of the above finding it would not be necessary to decide as to whether in fact and in law there is any breach of the provisions of Section 166 (2) and even if there is such a breach whether it has any nullifying effect on the meeting held in the peculiar circumstances and the knowledge and guidance that was detained by the Company at that time. That Company was guided by the circular of the Central Government and guided or misguided by the letter of Senior Superintendent of Post Offices Surat. According to the applicant the Company has conveniently and deliberately misguided itself by approaching the postal authorities at Surat Division instead of Surat City. Now that the Division between Surat City postal limits and Surat Division postal limits is clear there may not be any confusion or even bona fide action under some guidance or misguidance. Since this Court has no jurisdiction no final opinion need be expressed by this Court. In the result the application fails and is dismissed. .