Tnd.Mercantile Bank ... vs S.C.Sekar & Ors

2. Tamilnad Mercantile Bank Ltd. (for short, "the Company") was established by the Nadar Community. It is incorporated and registered under the Indian Companies Act, 1956. It carries on banking business inter alia in the State of Tamil Nadu.

1 Members of the Appellant-Association hold a large number of shares in the company. For one reason or the other its Annual General Meetings could not be held for a number of years. By reason of an order dated 14th October, 2003, the Company Law Board directed that Annual General Meetings for the years 1996 to 2003 be held. Pursuant thereto meetings were held and some Directors were elected.

4. A notice convening 83rd Annual General Meeting on 27th July, 2006 was issued on 14th June, 2006.

" Till such time, without postponing the meeting, there can be a better arrangement to conduct the Annual General Meeting as scheduled on 27.7.2006 so far as the subject matters 1, 2 and 6 found in the agenda (by show of hands) are concerned and regarding the other subject matter Nos.3 to 5 found in the agenda, the General Body Meeting may be adjourned until further orders of the Court and to which meeting, fresh proxies may be allowed in accordance with the result of the enquiry to be made in these applications.

6. Pursuant to or in furtherance of the said direction a meeting was held on 27th July, 2006. However, three items of Agenda, being item Nos. 3, 4 and 5 stood adjourned. Indisputably the said items of the Agenda read as under:-

12. Indisputably a meeting was held under the Chairmanship of Justice R. Balasubramaniam on 5th June, 2008. Theretobefore, he met all the shareholders who desired to make representations on the mode and manner for conducting the Annual General Meeting on 1st June, 2008. Appellant did not submit any petition on that date. It did so, however, at a later stage.

14. Appellant preferred an intra court appeal against the order dated 29th April, 2008. The Division Bench while observing that the order dated 29th April, 2009 sufficiently protected the interest of the appellant, dismissed the same.

17. The contempt matter came up before another learned Single Judge of the High Court. As would be noticed hereinafter no disclosure was made in the said proceeding as regards the orders passed by the learned Single Judge in the applications filed from time to time as also other proceedings taken by the parties. However, the learned Single Judge passed an ad interim ex parte injunction on 12th June, 2008 restraining the Managing Director of the Company Shri G. Narayanamurthy from implementing the resolution or item of business in relation to the election of Directors passed at the Annual General Meetings held on 5th June, 2008 till the disposal of contempt petition. The matter was directed to be posted on 21st July, 2008.

21. However, Shri T. Rajakumar withdrew the said application and preferred an intra court appeal. Shri S.C. Sekhar, who is also said to have been elected in the said Annual General Meetings dated 5th June, 2008 also preferred an intra court appeal.

24. Taking notice of the earlier order of the court dated 26th July, 2006 in terms whereof the erstwhile Directors were directed to continue in the office and to maintain status quo until further orders of the court and furthermore taking notice of the fact that in the meantime Annual General Meetings had already been held wherein resolution had been passed electing the Directors and that the appellants having failed to obtain any interim order either in the present suit or in the previous suit C.S. No.981 of 2004 and after having allowed the meetings to go on, the first plaintiff has adopted a dubious method of moving a Contempt Petition and getting an interim order of injunction on 20.6.2008 contrary to the statement made across the Bar on 16.6.2008 amounted to an abuse of the process of the Court, observed:-

50. Assuming that an appeal under Section 19 was technically not maintainable, having regard to the fact that the interim injunction was granted till disposal of the contempt application, in our opinion, it was a judgment within the meaning of Clause 15 of the Letters Patent of the Madras High Court.

51. We will, however, proceed on the assumption that no appeal was maintainable.

58. For the reasons aforementioned we are of the considered opinion that it is not a fit case wherein we should exercise our jurisdiction under Article 136 of the Constitution of India. The appeals are dismissed with costs. Counsel fee assessed at Rs.50,000/- in each case.