Appeal No 1333 N of 1967
3 05 From the Judgment and Decree dated the 25th November 1966 of the Delhi High Court in Regular First Appeals Nos
89 D and 104 D of 1956
V section Desai Ravinder Bana O P Rana and Uma Mehta for the appellants
B Sen Suresh Sethi R K Maheshwari and B P Maheshwari for the respondent
The Judgment of the Court was delivered by MATHEW J
This appeal by certificate is directed against the Decree of the High Court of Delhi dated November 25 1966 passed in Regular First Appeals No 89 D of 1956 and No 104 D of 1956 both arising from Suit No 282 of 1954 instituted by the plaintiff appellant for a declaration that he continued to be the General Manager of the Fire Insurance Company in question and that the purported termination of his services was inoperative and claiming a sum of Rs 3735230 from the defendant on account of his arrears of pay etc or in the alternative for a sum of Rs 163820 as money due to him by way of bonus gratuity etc as detailed in the plaint
The respondent Company had filed a suit against the appellant for the recovery of Rs 110000 being Suit NO 306 of 1954 in which the Company was granted a decree for Rs 575996 with proportionate costs
First Appeal No 88 D of 1956 before the High Court was the appeal by the Company against the rejection of the rest of its claim in Suit No 306 of 1954
We are not concerned with that appeal
Regular First Appeal No 89 D of 1956 was the Company s appeal against the award of decree for Rs 73936159 passed in favour of the appellant
Regular First Appeal No 104 D of 1956 was the appellant s appeal against the rejection of his other claims in his suit
The High Court dismissed First Appeals No 88 D of 1956 and 104 D of 1956 but partially allowed First Appeal No 89 D of 1956
The appellant was appointed as the Secretary of the respondentCompany on October 16 1942
His pay was fixed at Rs 1000pm free of income tax
Later on he was promoted as the General Manager of the Company
On November 21 1953 the appellant sent an application for leave to the Chairman of the Board of Directors but no reply  was received by him
He thereafter sent another application for 8 months  leave on the 16th of December 1953
On December 17 1953 the appellant received a telegram from the Chair man of the Board of Directors stating that the services of the appellant had been terminated by the Company and that he should stop attending the office
A registered letter to the same effect from the Chairman was also received by him
The allegation of the appellant in the plaint was that his services had not been validly terminated by the respondent Company and that he still continued
as the General Manager of the Company and was 30 6 entitled to recover the sum already mentioned from the respondent
In the alternative the appellant claimed among other things 18 months  salary as due to him on the basis that he was entitled to 18 months  notice before terminating his services
In the written statement the respondent Company contended that the Chairman validly terminated the services of the appellant on December 17 1953 in pursuance to a resolution passed by the Board of Directors on the 16th and that subsequently that resolution and the action of the Chairman terminating the services had been confirmed by a meeting of the Board of Directors held on December 23 1953 and therefore the services of the appellant were validly termi nated
The respondent Company also contended that the appellant was in no event etitled to 18 months  notice as claimed by him but only to one month s notice and therefore he was entitled to get only one month s salary in lieu of notice under that
The trial court found that the meeting of the Board of Directors held on December 16 1953 was valid that the services of the appellant were validly terminated by telegram and letter of the Chairman dated December 17 1953 addressed to the appellant that even if it be assumed that the meeting of the Board of Directors held on December 16 1953 was irregular the resolution of the Board of Directors terminating the services of the appellant on the 16th and the action of the Chairman in actually terminating the services were ratified by the Board of Directors_ by its resolution of December 23 1953 and therefore the services of the appellant were legally and validly termi nated
it further held that the rules framed by the Company namely exhibits D 3 and D 4 would govern the appellant and that he was entitled under clause 6 of exhibit D 3 only to one month s notice for terminating his services although the Court found that if the appellant was not bound by the rules he would have been entitled to 12 months  notice before the termination of his services
The findings of the trial court in these respects were confirmed in appeal by the High Court
In this appeal only two points were argued by counsel for the appellant  1 that the services of the appellant were not validly terminated and therefore he was entitled to a declaration that be continued to be the General Manager of the Company and to claim the amount specified in the plaint and 2 that in any event the appellant was entitled to 12 months  notice before his services were terminated and as only one month s notice was given he was entitled to 11 months  pay in addition to what was awarded under this head
As regards the first point it was said that the meeting of the Board of Directors dated December 16 1953 was not properly convened for the reason that notice of the meeting was not given to all the Directors
The trial court found that one of the Directors viz Mr B P Khaitan was not given notice of the meeting of the Board of Directors held on December 16 1953 and that he was not present at the meeting when the resolution to terminate the services of the appellant was passed
307 Now it cannot be disputed that notice to all the Directors of a meeting of the Board of Directors was essential for the validity of any resolution passed at the meeting and that as admittedly no notice was given to Mr Khaitan one of the Directors of the Company the resolution passed terminating the services of the appellant was invalid
Article 109 of the Articles of Association of the Company provides as follows  109
When meeting to be convened A Director may at any time summon meeting of the Directors by serving every Director with at least 72 hours  notice in writing through the officer of the Company authorized to receive such notice who shall arrange to convene the meeting
In Hasbury s Laws of England Vol 9 p 46 it has been stated that it is essential that notice of the meeting and of the business to be transacted should be given to all persons entitled to participate and that if a member whom it is reasonably possible to summon is not summoned the meeting will not be duly convened even though the omission is accidental or due to the fact that the member has informed the officer whose duty it is to serve notice that he need not serve notice on him
In Volume 6 at p 315 article 626 it is stated that a meeting of the directors is not duly convened unless due notice has been given to all the directors and the business put through at a meeting not duly convened is invalid
To put it in other words as the meeting of the Board of Directors held on December 16 1953 was invalid so the resolution to terminate the services of the plaintiff was inoperative
Then the question for consideration is what is the effect of the confirmation of the minutes of the meeting of the Board of Directors held on December 16 1953 and the action of the Chairman in terminating the services of the appellant by his telegram and letter dated December 17 1953 in pursuance to the invalid resolution of the Board of Directors to terminate his services in the meeting of the Board of Directors held on December 23 1953  The agenda of the meeting of the Board of Directors held on December 23 1953 shows that one item of business was the confirmation of the minutes of the meeting of the Directors held on December 16 1953
The confirmation of the minutes of the meeting of the Directors held on December 16 1953 would not in any way show that the Board of Directors adopted the resolution to terminate the services of the appellant passed on December 16 1953
It only shows that the Board passed the minutes of the proceedings of the meeting held on December 16 1953
But the resolution of the Board of Directors to confirm the action of the Chairman to terminate the services of the appellant by his telegram and letter dated December 17 1953 would show that the Board ratified the action of the Chairman
Even if it be assumed that the telegram and the letter terminating the services of the appellant by the Chairman was in pursuance to the invalid resolution of the Board of Directors passed on December 308 16 1953 to terminate his services it would not follow that the action of the Chairman could not be ratified in a regularly convened meeting of the Board of Directors
The point is that even assuming that the Chairman was not legally authorised to terminate the services of the appellant he was acting on behalf of the Company in doing so because he purported to act in pursuance of the invalid resolution
Therefore it was open to a regularly constituted meeting of the Board of Directors to ratify that action which though unauthorised was done on behalf of the Company
Ratification would always relate back to the date of the act ratified and so it must be held that the services of the appellant were validly terminated on December 17 1953
The appellant was not entitled to the declaration prayed for by him and the trial court as well as the High Court was right in dismissing the claim
The second point for consideration is whether the appellant was entitled to 18 months  notice before his services were terminated as claimed by him
The trial Court found that the rules of the Company viz exhibits D 3 and D 4 were binding on the appellant and that rule 6 of exhibit D 3 which provides for one month s notice in case of termination of services of all employees would apply to the appellant as well
The High Court confirmed that finding
The rules expressly purport to bind all the employees of the respondent Company
There is no reason to hold that the appellant was not an employee of the respondent Company
Besides the appellant himself has relied upon these rules for the purpose of computation of the amount due to him on account of bonus provident fund etc
In these circumstances it is idle to contend that the rules did not bind him
In this view it is quite unnecessary to consider the question whether apart from the rules one month s notice was reasonable in the circumstances of the case
There is no merit in this appeal
We dismiss it but in the circumstances we make no order as to costs
GC Appeal dismissed


Summary:
The appellant was appointed Secretary of the respondent company in 1942
Later he was promoted as General Manager
By a resolution dated December 16 1953 the Board of Directors of the company decided to terminate the services of the appellant
By a telegram and a letter dated December 17 1953 addressed to the appellant the Chairman of the Board of Directors terminated the services of the appellant
Subsequently at a meeting held on December 23 1953 the Board of Directors confirmed the minutes of the meeting held on December 16 1953 and the action of the Chairman in terminating the services of the appellant by his letter and telegram dated December 17 1953
The appellant filed a suit challenging his dismissal and also claimed that he was entitled to 18 months  notice before termination of his services
The trial Court and the High Court decided against the appellant
In appeal by certificate to this Court the questions for consideration were  i whether the termination of the appellant s service was valid and ii whether the appellant was bound by the company s rules which provided for termination of the service of employees after one month s notice
Dismissing the appeal HELD  i Notice to all the Directors of a meeting of the Board of Directors was essential for the validity of any resolution passed at the meeting
As admittedly no notice was given of the meeting on December 16 1953 to one of the Directors the resolution passed terminating the services of the appellant was invalid
307 D E But the resolution of the Board of Directors to confirm the action of the Chairman to terminate the services of the appellant by his telegram and letter dated December 17 1953 would show that the Board ratified the action of the Chairman
Even if it be assumed that the telegram and the letter terminating the services of the appellant by the Chairman was in pursuance to the invalid resolution of the Board of Directors passed on December 16 1953 to terminate his services it would not follow that the action of the Chairman could not be ratified in a regularly convened meeting of the Board of Directors
Even assuming that the Chairman was not legally authorised to terminate the services of the appellant he was acting on behalf of the Company in doing so because he purported to act in pursuance of the invalid resolution
Therefore it was open to a regularly constituted meeting of the Board of Directors to ratify that action which though unauthorised was done on behalf of the company
Ratification would always relate back to the date of the act ratified and so it must be held that the services of the appellant were validly terminated on December 17
1953 307 G 308 C ii The rules which provided for one month s notice in case of termination of services of all employees would apply to the appellant as well
The rules expressly purported to bind all the employees of the respondent company
There was no reason to hold that the appellant was not an employee of the respondent company
The appellant had himself relied on the rules
It was therefore idle to contend that the rules did not bind him
The contention of the appellant that he was entitled to 18 months  notice must be rejected
308 D E