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2005 DIGILAW 404 (CAL)

SUDIN KUMAR CHATTERJEE v. IMPETUS ENGINEERING PVT. LTD

2005-06-28

BHASKAR BHATTACHARYA, RAJENDRA NATH SINHA

body2005
BHASKAR BHATTACHARYA, J. ( 1 ) THIS appeal is at the instance of a plaintiff in a suit for recovery of unpaid fees and remuneration of a whole-time Director and also for permanent injunction and is directed against the judgment and decree dated 11th August, 2003 passed by the learned Judge, 9th Bench, City civil Court at Calcutta in Money Suit No. 513 of 1999 thereby holding that the suit was not maintainable before the City Civil Court at Calcutta. ( 2 ) THE appellant filed the aforesaid suit thereby claiming the following relief: (a) A decree for Rs. 78,000/- (Seventy-eight thousand only) against the defendants on account of the fees and remuneration of Rs. 6,500/- per month as unpaid for the period of August, 1998 to July, 1999 as given in Schedule "a" below; (b) A decree for permanent injunction restraining the defendants or their men, agents, servants and/ assigns and/or directions from taking forcible decisions the plaintiff is not legally entitled to get the fees and remuneration totalling of Rs. 78,000/- or any payment thereof as unpaid under the due process of law and from taking decisions towards the plaintiffs activities in the company as sleeping Director and from taking decisions for not allowing the plaintiffs participation in his job of directorship or the plaintiff has no authority to function as directorship or for anyhow ousting the plaintiff from his directorship post and from taking forcible decisions of the share certificates as invalid and cancelled and operating new bank account in Punjab National Bank, Dharmatala branch at 120, Lenin Sarani, Calcutta without obtaining the plaintiffs signature which is essential in terms of the bye-laws of the company and operating or opening any bank account without written consent of the plaintiff and withdrawing any amount from the bank without obtaining his signature and dealing with anybody or authority regarding financial matters and business affairs of the company without the consent of the plaintiff and/or except by due process of law; (c) Costs of the suit; (d) Interest; (e) Attachment; (f) And pass such other relief or reliefs as this learned Court may deem fitand proper. ( 3 ) THE case made out by the plaintiff in the said suit may be summarized thus: (i) That plaintiff was appointed on 31st May, 1993 as a Director of the defendant No. 1, the Company. ( 3 ) THE case made out by the plaintiff in the said suit may be summarized thus: (i) That plaintiff was appointed on 31st May, 1993 as a Director of the defendant No. 1, the Company. On the basis of resolution of the company on its Board meeting in conformity with Articles of association, the remuneration of the Directors was fixed at Rs. 6,500/-a month with effect from 31st March, 1998 and the plaintiff received his remuneration as fixed by the Board of Directors till the month of july, 1998 in recognition of the service rendered by him. (ii) The defendant Nos. 2, 3 and 4 with mala fide intention did not pay the remuneration to the plaintiff in terms of the resolution of the Directors from the period of August, 1998 till July, 1999 for his services rendered to the Company and accordingly a sum of Rs. 78,000/- was due towards his fees and remuneration. (iii) The defendant Nos. 2,3 and 4 started implicating the plaintiff in various ways so that the plaintiff did not attend the office of the Company and could not perform the job of the Director and their sole object was to oust the plaintiff from the office of Director of the Company. The plaintiff was served with a notice dated 9th November, 1998 alleging false charges levelled against him and in reply to the said notice, the plaintiff denied all the six false allegations brought against him. (iv) On 16th December, 1998 and 18th January, 1999, the plaintiff wrote two different letters to the defendants requesting them to pay the unpaid remuneration of the plaintiff from the months of August, 1998 to December, 1998 but no action was taken by defendants. (v) On 3rd May, 1999 plaintiff made a demand of justice through his learned advocate to all the defendants claiming dues of the plaintiff including director's fees from August, 1998 till January, 1999 and complaining various illegal acts and activities of the defendants in respect of the company's business. Again on 20th May, 1999 and 1st June, 1999, plaintiff made two demands of justice through his learned advocate to the defendants relating to the non-payment of dues and for allowing the plaintiff to function as whole-time Director in the Company. Again on 20th May, 1999 and 1st June, 1999, plaintiff made two demands of justice through his learned advocate to the defendants relating to the non-payment of dues and for allowing the plaintiff to function as whole-time Director in the Company. (vi) In reply to the above demands of justice, the defendants gave a letter through their learned advocate thereby refusing to settle the dues of the plaintiff and to allow the plaintiff to join on the various allegations made against the plaintiff. (vii) The defendants in contravention of the terms and conditions laid down in Clause 33 of the Article of Association and registration of Special resolution and Agreements entered into between the plaintiff and the defendants opened new Bank Accounts in Punjab National Bank, dharmatala Branch and they had withdrawn money from the Bank and stopped the earlier Bank Account in UCO Bank without the consent of the plaintiff and without obtaining his signature. (viii) The defendants had filed no return in respect of the Company's Account in 1998 and no Annual General Meeting was held by the defendants in respect of the Company's affairs. (ix) It appears from the lawyer's notice of the defendants that they threatened to oust the plaintiff and otherwise cause injury to the plaintiff in relation to administrative and financial affairs of the company in dispute. Hence the suit. ( 4 ) THE said suit was contested by the defendants by filing joint written statement thereby denying the material allegations made in the plaint and the defence taken by the defendants may be summed up thus: (i) That suit was not maintainable and was barred by law of limitation and the principles of waiver, estoppels and acquiescence. (ii) The plaintiff had no cause of action against the defendants and the company. (iii) It was admitted that plaintiff was one of the erstwhile Directors of the defendant No. 1 Company but the plaintiff had already been removed from the Board of Directors through resolution taken in tune with the provisions of Indian Companies Act and so the plaintiff had no locus standi to maintain the present suit. (iv) It was denied that the plaintiff did not receive his remuneration at the agreed rate as alleged. (iv) It was denied that the plaintiff did not receive his remuneration at the agreed rate as alleged. ( 5 ) THE plaintiff alone gave evidence in support of the plaint case while one ranjit Kumar Dutta the defendant No. 3 figured as the sole witness for the defendants. ( 6 ) IN examination-in-chief, the DW-1 alleged that the plaintiff of his own stopped attending office of the Company in the month of August, 1998 and did not take part in or discharge his day-to-day obligation in the official business of the Company. It was further stated that in order to get his remuneration, each of the Directors is required to draw cheque by his signature along with any of the remaining Directors. According to the defendants, the plaintiff of his own kept himself aloof from the business of the Company on and from August, 1998 and as such, the other Directors had taken resolution for his retirement from the status of the Director, though his right as shareholder is still continuing. In cross-examination, the DW-1, however, admitted that the plaintiff was entitled to have remuneration from the Company and the other Directors did not stop payment of remuneration or fees of the plaintiff by way of taking any resolution. ( 7 ) THE learned Trial Judge on consideration of the materials on record came to the conclusion that from Ext - A it appeared that the plaintiff was not attending the office and at the same time, the plaintiff had not filed any document to show that he actually gave service to the Company as one of the directors from August, 1998 to July, 1999. The learned Trial Judge further held that plaintiff could not file any document to prove that any of the Directors was entitled to have remuneration or fees even if he did not attend the duties of the Company as Director for any specific period. ( 8 ) THE learned Trial Judge, thus, held that plaintiff having failed to prove that he actually rendered service to the Company from August, 1998 to July, 1999 was not entitled to have any money decree. The learned Trial Judge further held that as regards other prayers made in the plaint, those were not entertainable by the City Civil Court as those are available before the other forums provided in the Companies Act. The learned Trial Judge further held that as regards other prayers made in the plaint, those were not entertainable by the City Civil Court as those are available before the other forums provided in the Companies Act. The learned Trial Judge, thus, dismissed the suit. ( 9 ) BEING dissatisfied, the plaintiff has preferred the present appeal. ( 10 ) MR. Sanyal, the learned advocate appearing on behalf of the appellant draws attention of this Court to the minutes of the meeting of the Board of directors dated 18th June, 1999 being Ext. ll showing that the petitioner was very much present in the said Board meeting as one of the Directors. Mr. Sanyal contends that DW-1 in his cross-examination having admitted that the plaintiff was entitled to have remuneration and fees from the company and that the other Directors did not stop payment of remuneration and fees to the plaintiff by taking any resolution on the Board of Directors, the learned Trial Judge committed a gross error of law in refusing prayer 'a' to the plaint. Mr. Sanyal, in his usual fairness, conceded that the other prayers made in the plaint were not maintainable before the City Civil Court. ( 11 ) THE learned advocate appearing on behalf of the defendants on the other hand has opposed the aforesaid contention of Mr. Sanyal and has contended that the suit is hit by the provisions of City Civil Court Act as the claim of the plaintiff is based on the allegation on the internal affairs of the Company. According to him, the learned Trial Judge rightly relied upon Ext. A in coming to the conclusion that plaintiff was not rendering service as a Director at the relevant point of time. He, thus, prays for dismissal of the suit. ( 12 ) AFTER hearing the learned counsel for the parties and after going through the materials on record we find that from Ext. 11 it is well-established that plaintiff was working as Director even in the month of June, 1999. It is also established from evidence of DW-1 that a Director can withdraw remuneration, only if at least another Director signifies his approval in the matter of such withdrawal. DW-1 had admitted in his evidence that they received letter from plaintiff claiming fees and remuneration and that no reply was given to that letter. It is also established from evidence of DW-1 that a Director can withdraw remuneration, only if at least another Director signifies his approval in the matter of such withdrawal. DW-1 had admitted in his evidence that they received letter from plaintiff claiming fees and remuneration and that no reply was given to that letter. DW-1 further admitted that plaintiff is entitled to have remuneration from the Company and the other Director did not stop payment of remuneration and fees to the plaintiff by taking any resolution. The said DW-1 further admitted that there is no specific attendance register showing attendance of the Directors of the Company. In the aforesaid circumstances, we are of the view that the learned Trial Judge totally misread Ext. 1 in coming to the conclusion that the plaintiff was not attending his office. In Ext. 1 the plaintiff merely wanted confirmation of certain allegations and the said letter did not indicate that the plaintiff was not attending the office for any specific period. We have already pointed out that even in the month of June, 1999 plaintiff attended the meeting of the Board of Directors. Moreover, even in the year 2001, while filing Criminal Revisional application before the learned Chief judge, City Sessions Court against the appellant, he was described as a Director of the respondent No 1. ( 13 ) AS it appears from the evidence of DW-1, the other Directors of the defendant No. 1 had no intention of withholding the remuneration of the plaintiff as Director for the said period. Such being the position, we are of the view that the plaintiff is entitled to get remuneration for the aforesaid period. According to the evidence DW-1, the plaintiff of his own cannot withdraw the remuneration unless another Director joins with him in the matter of withdrawal. In this case it is proved that the plaintiff demanded remuneration but the defendants did not give reply pointing out any impediment in paying the same to the plaintiff. The aforesaid fact shows that there was no just cause of not permitting the plaintiff to withdraw remuneration and it was for non-cooperation of the other Directors that plaintiff could not withdraw his remuneration. The aforesaid fact shows that there was no just cause of not permitting the plaintiff to withdraw remuneration and it was for non-cooperation of the other Directors that plaintiff could not withdraw his remuneration. We, thus, find that the plaintiff is entitled to get remuneration for the period in question as neither the rate of remuneration nor the amount has been disputed by the defendants by adducing any evidence. ( 14 ) WE, however, find no substance in the contention of learned advocate for the respondent that even the prayer (a) cannot be granted as for granting such relief the Court is required to investigate the dispute concerning internal management of the Company. So far the first prayer is concerned, namely, the payment of the unpaid remuneration of the erstwhile Director of the Company, the plaintiff as a former Director is certainly entitled to get such remuneration from a Civil Court as his entitlement has been admitted in evidence. The claim made in prayer (a) of the plaint is based on the allegation of infringement of the right of the plaintiff which is of a civil nature and as such, a Civil Court is entitled to grant the relief claimed. (See Dwaraka Prasad Agarwal vs. Ramesh chandra Agarwalla and Ors. , reported in AIR 2003 SC 2696 ). ( 15 ) WE, thus, allow the prayer (a) to the plaint by directing the respondent no. 1, the Company, to pay Rs. 78000/-, the admitted amount, to the plaintiff within one month from today with interest at the rate of 8% per annum from august 1,1999. In default of payment within one month, the said amount will carry interest @ 10 per cent per annum from August, 1999 till payment. The suit is, thus, decreed in part. The appeal is allowed. The judgment and decree passed by the learned Trial Judge is modified to the extent indicated above. In the facts and circumstances, there will, however, be no order as to costs. Rajendra Nath Sinha, J. : I agree. Appeal allowed. Appeal from Original Decree No. 455 of 2003. Appeal preferred on the 9th day of September, 2003 against the judgment and decree passed by Sri Milan chatterjee, learned Judge, 9th Bench, City Civil Court, Calcutta in Money Suit no. 513 of 1999. Rajendra Nath Sinha, J. : I agree. Appeal allowed. Appeal from Original Decree No. 455 of 2003. Appeal preferred on the 9th day of September, 2003 against the judgment and decree passed by Sri Milan chatterjee, learned Judge, 9th Bench, City Civil Court, Calcutta in Money Suit no. 513 of 1999. Dated the 18th day of August 2003 sudin Kumar Chatterjee, son of Late Kamal Kumar Chatterjee, a Wholetime director of M/s. Impetus Engineering (P) Ltd. residing at 'the Sleepy Hollow' lalbagan, P. O. Chandannagar, District - Hooghly (Pin 712136 ). vs. 1. Impetus Engineering Private Limited, a company, registered under the indian Companies Act, 1956, having its City Office at 87, Lenin Sarani, 1st floor, Calcutta - 700 013. 2. Nrityalal Karmakar, residing at 6/1, Kayastha Para, 4th Lane, Haltu, calcutta - 700 078. 3. Ranjit Kumar Dutta, residing at 13, Kamal Park, Birati, Calcutta - 700 052. 4. Pratap Chandra Maity, residing at 5/6/1, Matilal Mullick Lane, Calcutta 700 035. 5. Asit Ghosh, residing at 6/1, Umesh Chatterjee Lane, Howrah - 711 104. . . . All are whole-time Directors of M/s. Impetus Engineering (P) Ltd. , having its City Office at 87, Lenin Sarani, Calcutta - 700 013. Appeal valued, for purposes of jurisdiction, at Rupees Seventy-eight thousand only (Rs. 78,000-/- ). Upon the hearing of this Appeal is a Division Court before The Hon'ble bhaskar Bhattacharya and The Hon'ble Rajendra Nath Sinha, two of the judges of this Court, on the 28th day of June, 2005. It is ordered and decreed that the judgment and decree passed by the learned trial Judge be and the same is modified and the suit is decreed in part to this extent that the prayer (a) to the plaint by directing the respondent No. 1, the company, to pay Rs. 78,000/-, the admitted amount, to the plaintiff within one month from the date of judgment with interest at the rate of 8% per annum from August 1, 1999 be and the same is allowed. And it is further ordered and decreed that in default of the above payment within one month, the said amount will carry interest @ 10 per cent per annum from august, 1999 till payment.