Calcutta High Court
Eastern India Educational ... vs Birla Corporation Limited And Ors on 26 September, 2022
OD-2 to 4
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
APOT/180/2022
CS/212/2022
IA NO.GA/1/2022
GA/2/2022
EASTERN INDIA EDUCATIONAL INSTITUTION
VERSUS
BIRLA CORPORATION LIMITED AND ORS.
APOT/181/2022
CS/213/2022
IA NO.GA/1/2022
GA/2/2022
HINDUSTAN MEDICAL INSTITUTION
VERSUS
BIRLA CORPORATION LIMITED AND ORS.
APOT/182/2022
CS/214/2022
IA NO.GA/1/2022
GA/2/2022
BELLE VUE CLINIC
VERSUS
BIRLA CORPORATION LIMITED AND ORS.
BEFORE
The Hon'ble Justice CHITTA RANJAN DASH
The Hon'ble Justice PARTHA SARATHI SEN
Date: 26th September, 2022
Appearance
Mr. Ravi Shankar Prasad Senior, Advocate (VC)
Mr. Jishnu Saha, Senior Advocate
Mr. Anirban Ray, Advocate
Mr. Rajarshi Dutta, Advocate
Mr. Sankarshan Sarkar, Advocate
Ms. Pritha Basu, Advocate
Mr. Rahul Sharma, Advocate
Mr. Debartha Chakraborty, Advocate
Ms. Ankita Agrahari, Advocate
....for the appellants
Mr. Ranjan Bachawat, Senior Advocate
Mr. Paritosh Sinha, Advocate
Mr. Sayan Roy Chowdhury, Advocate
2
Mr. Shaunak Mitra, Advocate
Mr. Saubhik Chowdhury, Advocate
Mr. Satyaki Mukherjee, Advocate
Mr. Tirthankar Das, Advocate
...for the respondent no.1
Mr. Abhrajit Mitra, Senior Advocate
Mr. Debanjan Mandal, Advocate
Mr. Sanjiv Trivedi, Advocate
Mr. Jishnu Chowdhury, Advocate
Mr. Soumya Ray Chowdhury, Advocate
Mr. Sarbapriya Mukherjee, Advocate
Mr. Satadeep Bhattacharyya, Advocate
Ms. Iram Hassan, Advocate
Mr. Sanket Sarawgi, Advocate
Mr. Aritra basu, Advocate
Ms. Mahima Cholera, Advocate
...for the respondent nos.7 & 10
Mr. Joy Saha, Senior Advocate
Mr. Avisekh Guha, Advocate
Mr. Rajat Gupta, Advocate
Ms. Akansha Chopra, Advocate
....for the APL Committee
The Court: As the common questions and facts are involved in
these three appeals, all the appeals are clubbed together for disposal by
this Court by this common order.
Heard Mr. Ravi Shankar Prasad, learned senior counsel for the
appellant, Mr. Ranjan Bachawat, learned senior counsel for the respondent
no.1, Mr. Abhrajit Mitra, learned senior counsel for the respondent nos.7
and 10 and Mr. Joy Saha, learned senior counsel for the APL Committee.
Perused the impugned order dated 16th September, 2022 passed by the
learned Single Judge passed in GA 1 of 2022 (CS No.212 of 2022), GA 1 of
2022 (CS No.213 of 2022) and GA 1 of 2022 (CS No.214 of 2022).
Submission of Mr. Ravi Shankar Prasad along with Mr. Jishnu
Saha, learned senior counsel appearing for the petitioner/appellant in the
three appeals is confined to the following points:-
1. The plaintiff/appellant society has right to vote in the Annual
General Meeting (in short 'AGM') to be held on 27th
September, 2022 and according to the by-laws of the
plaintiff/appellant society in all the appeals, it is the Board of
Trustees which can authorise voting in the AGM.
2. It is further submitted by plaintiff/appellant that on the last
occasion, though the voting right was exercised by the
plaintiff/appellant society through e-voting and the voting
was closed, on the basis of a resolution by the Managing
Committee, all the votes cast in contradiction to the decision
of the Board of Trustees by the plaintiff/appellant society
were invalidated.
On the basis of such facts, the present suit had been filed
apprehending that this time also such mischief may be played and the vote
cast by the plaintiff/appellant society may be invalidated.
Mr. Joy Saha, learned senior counsel appearing for the APL
Committee submits that nobody can cast vote going beyond the direction of
the APL Committee and shows us different paragraphs of the judgment
passed by the Single Judge of this Court in probate case. However, after
hearing learned counsel for all the respondents, submission made by Mr.
Joy Saha does not commend to us.
So far as Mr. Bachawat, learned senior counsel for the
defendant/respondent no.1 is concerned, it is submitted that irrespective of
who casts the vote, the interest of the company, which is a public limited
company, should be protected. Referring to the provision of Section 20 of
the Companies (Management & Administration) Rules, 2014, it is
submitted by him that the scrutiniser is neither an employee of the
company nor is chosen by any of the persons connected with the company
and he is an independent person.
Mr. Abhrajit Mitra, learned senior counsel appearing for the
respondent nos.7 and 10 supports the impugned order and submits that
the plaintiff/appellant has no cause of action to file this suit and the cause
of action for the suit having arisen in the month of September after
invalidation of their votes, they have not approached the Court, and
approaching the Court at the eleventh moment should not be encouraged.
Taking us through the different paragraphs of the judgment of the probate
court, it is submitted before us that Harsh Vardhan Lodha has not been
debarred from taking part in the affairs of the company, rather a contempt
petition filed against him has yielded no result.
After going through the impugned order, the provisions of the
Companies (Management & Administration) Rules, 2014 and by-laws of the
plaintiff/appellant society, we find that all the properties, movable and
immovable, belonging to the society vest in the trustees and members of
the Managing Committee are also appointed by the trustees. We are shown
two different paragraphs from the plaint where it is found that the
defendant/respondent no.7 is one of the trustees. In the suit, prayer has
been made to give effect to the decision of the majority of the trustees and
in the interim application, prayer has been made to give effect to the
decision of the trustees. Clause 24 of by-laws of the society read thus :
24. The trustees may regulate their meetings and proceedings and
conduct of duties as they may decide. The Trustees may by a
resolution direct any act, deed or thing required to be done or executed
by them to be done or executed by any one or more of them, and in
such cases any act, deed or thing, done or executed in pursuance of
such a resolution shall be as valid and effectual as if it had been done
or executed by all the Trustees, such delegation of authority may be by
general or special resolution passed without any meeting of the
trustees and evidenced in writing under the hands of the majority of
the trustees and it shall be as valid and effectual as a resolution
passed at a meeting of the trustees."
After going through the aforesaid by-laws, so far as the
delegation of authority is concerned, it can be made by majority of the
trustees but taking into consideration the provision of Section 48 of the
Trusts Act read with the decision of the Hon'ble Supreme Court in
paragraphs 18 and 19 which reads thus:
"18. Section 48 of the Trusts Act provides that when there are more
trustees than one, all must join in the execution of the trust, except
where the instrument of trust otherwise provides. It is thus clear that all
acts which the trustees intend to take for executing the trust must be
taken by all of them acting together. Therefore, there can be no doubt
that if the validity of the alienations effected by the trustees falls to be
considered only in the light of Section 48 the fact that out of the three
trustees only two have executed the sale deeds would by itself make
the transactions invalid and would not convey title to the alienees. This
position is not in doubt.
19. Lewin on "Trusts" has observed that "in the case of co-trustees
the office is a joint one. Where the administration of the trust is vested
in co-trustees they all form as it were but one collective trustee, and
therefore must execute the duties of the office in their joint capacity. It is
not uncommon to hear one of several trustees spoken of as the acting
trustee but the Court knows no such distinction; all who accept the
office are in the eyes of the law acting trustees. If anyone refuses or be
incapable to join, it is not competent for the others to proceed without
him, but the administration of the trust must in that case devolve upon
the Court. However, the act of one trustee done with the sanction and
approval of a co-trustee may be regarded as the act of both. But such
sanction or approval must be strictly proved. If one of the trustees
refuses to join in the execution of the trust, under the Indian law Section
34 of the Trusts Act provides for the remedy. The other trustee can
apply to the Court as contemplated by Section 34 and the trust may
accordingly be executed."
we are of the view that all the trustees have to act in consonance
and not in contradiction. We are, therefore, of the view that if any one of
the trustees has also not joined in the decision, it cannot be said to be a
decision of the Board of Trustees.
From the provisions of Rule 20 of the Rules, 2014, it is clear that
after the e-vote is cast, the same person or entity cannot be allowed to cast
the vote again and we have seen from the past that the votes cast by the
plaintiff/appellant society have been invalidated upon receiving subsequent
letter.
In passing the order we have invoked our plenary power under
Article 226 of the Constitution of India read with Section 151 of the Code of
Civil Procedure to do complete justice to all the parties concerned and
especially to defendant/respondent no.1. We are also alive to the fact that
the scrutiniser appointed under 2014 Rules is to count the vote cast. He
has no further authority to invalidate a vote already cast on the basis of a
communication posterior in time to the time of casting of vote. If anybody
or any party is aggrieved by casting of vote by the plaintiff/appellant society
and raise any issue regarding validity of such vote for want of authority, he
is free to raise such question of validity of such vote/votes in proper court
of law. The scrutiniser, however, cannot invalidate such vote on the basis of
subsequent communication by the rival party.
Taking into consideration all the aforesaid facts, without going
into the merits of the case, maintainability of the suit or otherwise, we
dispose of the appeals while confirming the impugned order with a caveat
that the vote cast first by the plaintiff/appellant society, irrespective of he
being a member of the Managing Committee or Board of Trustees, shall be
taken into consideration and no subsequent communication shall be
entertained by the scrutiniser to invalidate such vote. We hope and trust
that the observation in the caveat shall serve the purpose of all the parties.
[CHITTA RANJAN DASH, J.]
[PARTHA SARATHI SEN,J.]
pa/akg
