M.G. Doshit vs Reliance Petrochemicals Ltd.

R.A. Mehta, J.—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 :

(2) 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 or at some other place within the city, town, or village in which the registered office of the company is

situated :

Provided 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 of a 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 meetings.

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, Dist. 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.

On behalf of the respondent-company, it is submitted that there is no breach of section 166(2) 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 postal department has confirmed that village Mora falls within the postal limits of Surat and reliance is placed on a Central Government

Circular, dated February 16, 1981, wherein it is clarified that a company can hold its annual general 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 along with part of that circular

which reads as follows :

Section 166(2) may be 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 June 6, 1990 (page

26), that the situation of the registered office of the company at Village Mora, postal Bhatha, Dist. 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 June 9, 1989, on the basis that the registered office falls

within the postal limits of Surat and, therefore, the holding of the annual general meeting in Surat would be in order. The Ministry of Company

Affairs, by their letter dated June 26, 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 and 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 November 16, 1990, that the ares 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 number 394 510. The third digit pinpoints the

sorting district which is 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 a violation of section 166(2) of the Companies Act.

The respondent-company has also raised a preliminary contention that the High Court is a court of special jurisdiction in the matter of the

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 the 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.

In the application, the only provision cited is section 166 of the Companies Act and the judge''s summons is also said to be u/s 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 registers

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.

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;

(b) with respect to any offence against this Act, the court of a Magistrate of the First Class or, as the case may be, a Presidency Magistrate, having

jurisdiction to try such offence.

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.

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 of 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 reference to the Companies (Court) Rules, 1959.

Rule 11 illustrates the matters with respect to which the High Court has jurisdiction. All the twenty-three 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 its

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.

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.

In the case of Municipal Corporation v. Premchand Manasukhram [1964] 5 GLR 847 , the question of jurisdiction was considered in a

different context and a classical passage from the case of The Municipal Corporation of the City of Ahmedabad Vs. Premchand Mahasukhram,

Deceased by his Heirs, 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.

In view of the above, it is to be held that the High Court has no jurisdiction in the 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 proceedings which is only for the purpose of section 166(2).

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 meting held in the peculiar circumstances and the

knowledge and guidance that was obtained by the company at that time. The company was guided by the circular of the Central Government and

guided or misguided by the letter of the Senior Superintendent of Post Office, 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.