Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Indian Contract Act 1872 (9 of 1872) |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Company-Managing Director appointed on certain terms - Resolution removing Managing Director and appointing another - General Meeting- Subsequent resolution passed cancelling previous resolution- Suit by the Director- Fraud and undue influence on the part of the appellate alleged- Whether first appellate court went far beyond pleadings- Letters Patent Appeal- Certificate under Art. 133 (1) (a) of the constitution- Whether competent - "Court immediately below" - Courts subordinate - Constitution of India, Art. 133 (1) (a) and (b) - Companies Act, 1956 (1 of 1956) s. 155 - Code of civil procedure, 1908 (Act V of 1908), ss. 100, 110, O.6, r.4 - Indian Contract Act, 1872 (9 of 1872) s.16. The appellant filed a suit in the Court of the Subordinate Judge for a declaration that certain resolution. of the directors and the shareholders in a private limited company passed on March 3 and 28, 1946, and at the meetings of the Directors held thereafter were illegal and void and for a declaration that the resolutions of October 16, 1945, were operative and in force. ' The respondents resisted the suit contesting that respondents 2 to 5 were coerced by the appellant who took advantage of his dominating position, into passing the resolutions on October 16, 1945, and those resolution. were not binding on the company. The Subordinate.Judge, held that the written statements did not contain 'sufficient particulars of the pica of coercion and undue influence' and that the respondents having failed to give evidence in support of the plea of coercion and undue influence, the burden of proving which lay upon them the appellant's suit must be decreed. In appeal the District Court held that the appellant was in a position to dominate the will of respondents 2 to 5 and he took advantage of that position and on that account the resolutions relied upon by the appellant dated October 16, 1945, were vitiated by coercion and undue influence, and the appellant could not get a decree relying upon those resolutions. The appellant appealed to the High Court. A single Judge of the High Court found that the District Judge had 'travelled far beyond the pleadings' and therefore his findings on issue of coercion and fraud could not be upheld. In an appeal under cl. 10 of the Letters Patent a Division bench of the High Court found that the appellant was in a position to dominate and had obtained unconscionable advantage and it was for him to prove that the resolutions of October 16,1945, were not vitiated by coercion and fraud which burden he had failed to discharge. They further held that later resolutions of the company were not binding on the appellant because no notice was issued to him of the meeting of the company; but no decree could be granted to him since 'equity declines to lend its aid to a person whose conduct has been inequitable', A certificate of fitness was however granted to appeal to this Court under Art. 133 (I} (a} of the Constitution. Before this Court, it was urged that the appeal did not involve any substantial question of law and the High Court was not competent to grant the certificate under Art. 133 (l} (a} and (b}. It was submitted that the expression 'Court Immediately below' in Art. i 33 meant a court subordinate to the High Court and a single Judge not being subordinate to a Division Bench of the High Court the 'Court immediately below' was the District Court. |
Judge | Honble Mr. Justice J.C. Shah |
Neutral Citation | 1962 INSC 387 |
Petitioner | Ladli Prasad Jaiswal |
Respondent | Karnal Distillery Co., Ltd., & Ors. |
SCR | [1964] 1 S.C.R. 270 |
Judgement Date | 1962-12-17 |
Case Number | 535 |
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