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Judicial Miscellaneous No. 46 of 1966, decided on 28th November 1966.

S. 79(3)‑‑Private limited company ‑Articles of Association requiring extraordinary general meting to be called by Directors or Director of company- Company comprising two Directors, J & D only, both at loggerheads with each other‑J, holding majority of shares but residing out of Pakistan, desirous of calling extraordinary general meeting for purpose of removing D from office of Director --D unwilling to call such meeting‑Court, in circumstances, justified in terms of S. 79(3) to call extra-ordinary general meeting on application of J‑Expression "the Court may . . . . order a meeting of company to be called, held and conducted in such m inner as the Court thinks fit" has a wider scope‑Court may modify Articles of Association, as to quorum or voting by proxy in regard to such meeting‑Court whether In exercise of powers wader S 79(3) could modify or supplement Articles of Association and thus prescribe and settle the mode in which proxies, could be used in proposed meeting.

A private company's Articles of Association required an extraordinary meeting to be convened by Directors or Director of the company. The company comprised only of two Directors J and D. Of the two Directors, J held 490 shares as against only 10 shares held by D. J wanted to remove D from the office of Director and wanted for that purpose to. call an extraordi nary general meeting. J was, however, resident abroad and D naturally was averse to call any such meeting. J, therefore, applied to Court under section 79(3) of the Companies Act, 1913, for calling an extraordinary general meeting for the purpose of removing D from office of Director and further that if such meeting was called he be permitted to be present and vote at such meeting through an attorney or agent although the Articles of Association did not allow person who was not member of the company to be appointed a proxy. D hotly contested the application and contended that the power vetted in Court under section 79(3) of the Companies Act, 1913, was only discretionary and not mandatory. It was an alternative remedy to be applied only when normal machinery of company management fails and not otherwise. It was further contended that no power vests in the Court to modify the Articles of, Association so as to permit appointment of any person not member of company to be proxy at the proposed meeting:

Held, that in a case which arises under section 79(3) of the Companies Act, 1913, the only consideration for the Court would be when a question is raised that it is impracticable to call s meeting of a limited company, whether in the particular circumstances of the case, the desired meeting of the company could, as a practical matter, be called and conducted In a proper case it is open to the Court to intervene in order to safeguard the interest of the majority of the share‑holders. In view of this it was abundantly clear that the extraordinary general meeting, which was sought to be called under Article 89 of the company, could not be called because the two Directors were at loggerheads and were not agreeable to call a meeting in accordance with the procedure laid down in the said Article. In fact J who was the Managing Director, was outside Pakistan, and it was only D who could call a meeting, in terms of Article 89(2). Since he was not prepared to call the required extraordinary general meeting there was no doubt that it was impracticable to call it in terms of section 79(3) of the Companies Act, 1913. There being a deadlock and justifiable lack of confidence in D's management, the Court could call the proposed meeting.

When a Court directs a meeting to be held it must neces sarily modify or supplement the company's Articles of Associa tion or the provisions of the Companies Act for achieving the object of the meeting. The interpretation of the expression "order a meeting of the company to be called, held and conducted in such manner as the Court thinks fit" in. its narrow sense would only mean control or management of the meeting. But in its wider sense it can also include the relaxation of rule about quorum or exercise of votes by share‑holders by proxy Prima facie therefore if in the circumstances of a particular case it was impracticable to conduct a meeting according to the rules provided in the Articles of Association, they could be modified. Consequently J in the case was entitled to exercise his right of vote as share‑holder by proxy in favour of an out sider in the meeting called by Court despite provision to the contrary contained in the company's Articles of Association.

Bal Krishna Maheshwari v. Uma Shanker Mehrotra and another A I R 1947 All. 361; The Indian Spinning Mills Ltd. and others v. His Excellency Ltd. General Madan Shamsher Jang Bahadur Rana and others A I R 1953 Cal. 355; Mrs. A. Anantha lakshmi Ammal v. Tiffin's Barytes. Asbestos and Paints Ltd. A I R 1952 Mad. 60; Ladli Prasad Jaiswal v. The Karnal Distillery Co. Ltd. P L D 1965 S C 221; Bengal and Assam Investors Ltd. v. J. K. Eastern Industries Private Ltd. A I R 1956 Cal 658; In re: Edinburgh Workman House Improvement Co. (1935) S C 56; "Words and Phrases Judicially Defined" by Roland Burrows Vol: I, 1946 Ed., p. 503; In re Tara Iron and Steel Co. A I R 1928 Born. 80; Lawrence Dawson and another v. J. Hormasji and others A I R 1932 Rang. 154 and In re: English Scottish and Australian Chartered Bank (1893) 3 Ch. Div. 385 ref.

J. H. Rahimtoola for Petitioner.

Mohammed Ali Saeed for Respondents.

Date of hearing : 14th November 1966.

This is a petition under section 79(3) of the Companies Act, 1913, for calling an extraordinary general meeting of Messrs G. B. Potts & Co., Ltd. for the purpose of removing Mr. Alex D'Souza, respondent No. 2 from office of Director of the said Company and permitting the petitioner to be present and vote at the said meeting through an attorney or agent or officer of the Court in the same manner as if the petitioner was personally present at the meting and if respondent No. 2 fails to attend the meeting to issue a .direction that the meeting be held notwithstanding his absence. It has arisen in the following circumstances: G. B. Potts & Co., Ltd. was incorporated under the Companies Act, 1913, on 12th April 1949, having a paid up capital of Rs. 50,000 divided into shares of Rs. 100 each with the object of carrying on business of survey of cargo and of hulls and engines of steamers and other objects set forth in the Memorandum of Association, Annexure A. The petitioner owns and holds 490 paid up shares of Rs. 100 each of the value of Rs. 49,000 out of the above issued capital comprising of 500 shares of Rs. 100 each. The remaining 10 shares of 'the value of Rs. 1,000 are held by Mr. Alex D'Souza, respondent No. 2. The petitioner is the Managing Director of the said Company and respondent No. 2 is a Director. Until 30th April 1966, the petitioner was residing in Karachi and since then he is residing in England. It is alleged that respondent No. 2 has sought to take advantage of the absence of the petitioner from Pakistan to injure his rights and that he has taken in his posses sion from the cashier and office safe of the company scrips of shares of the petitioner kept therein for safe custody. It is also alleged that respondent No. 2 has not signified his approval to the nomination by the petitioner of an alternate Director and has refused to consult with and take action in respect of matters of the Company with the consent of the attorneys of the petitioner appointed in this behalf. Thus it is alleged that respondent No. 2 is doing all these things to subvert the Company and its property and assets to his own use and gain. Though his share‑holding in the Company is of the value of Rs. 1,000 only he has endeavoured to gain control of the property and assets of the company of the alleged value of Rs. 2,49,000 as mentioned in Annexure B.

2. The case of the petitioner is that he agreed to the appointment of respondent. No. 2 as Director of respondent No. 1 Company and had agreed to the payment of salary to him of Rs. 2,100 per month which are no longer in the interest of respondent No. 1 Company. The petitioner is not able to continue to place trust in respondent No. 2 to permit him to manage the business and affairs of the company and or its property and assets, and since he holds shares of the value of Rs 49,000 as against Rs. 1,000 of respondent No. 2 he is entitled to remove respondent No. 2 from office as the Director of respondent No. 1. Company and by special resolution to wind up respondent No. 1 Company. The petitioner has contended that as he is residing out of Karachi it is impractic able to call and conduct an extraordinary general meeting of respondent No. I Company and to pass there at an extraordi nary resolution under Article 131 of the Articles of Association of respondent No. 1 Company that respondent. No. 2 be removed from office as Director and a special resolution that respondent No. 1 Company be wound up by the Court. After the filing of the petition the petitioner hat sought permission to withdraw the relief for calling an extraordinary general meeting for passing a special resolution; namely, that G. B. Potts & Co. be wound up by the Court. The petition, therefore, now is confined only to the prayer of calling an extraordinary general meeting for the purposes of removing respondent No. 2.

3. The petition is hotly contested on behalf of Mr. Alert D'Souza, respondent No. 2. His case is that the petitioner actually intended to retire from the Company with effect from 30th April 1966. With this view ha offered to sell his share holding to him at pat value. He agreed to buy the shares held by Capt. John Johnston but at a lower price consistent with the deteriorating condition of the Company and invoked the procedure provided in the Articles of Association of the Company for the purposes of determining the price of the peti tioner's shares. In this connection reliance is placed on the letter dated 22nd April 1966 and the reply of the respondent stated 28th April 1966. It is pleaded that the petitioner insisted on his price and notified to the respondent on 28th April 1966, that unless he had acceptance of his offer at once he would revert to his original plans for his shares. But the contesting respondent reiterated that the shares can only be disposed of by following the procedure provided in the Articles of Associa tion and warned him that no disposition of shares in contraven tion of the said Articles would be binding.

4. It is further alleged that on 30th April 1966, the peti tioner left for England and before leaving handed over the Company's Car KAD‑9893 to Mrs. Y. Lobo, a typist in the Company and her brother, Mr. J. G. D'Souza. He also took other steps in a spirit of vengeance against him to eliminate him from his rightful position of Director and the senior‑most surveyor. The contesting respondent has denied that he is trying to take advantage of the absence of the petitioner and has alleged that it is the petitioner who entered into a contract with him for the sale‑ of his shares and not having obtained fanciful price quoted by him and launched upon a plats to injure his interest and oust him front the Company. It is claimed that the contesting respondent has been carrying on the business of the Company to accordance with the Memorandum and Articles of Association and has maintained the correct and ful accounts of all transactions and disbursements, and the business and financial position of the company has greatly improved since the departure of the petitioner despite the obstructive tactics of his attorneys by freezing the Bank account of the Company due to which no salaries had been paid to the staff, for the previous months. He has further denied that any proposal or resolution was ever mooted for the appointment of nomination of alternate Director and therefore no question of its approval or disapproval arises. In defence the respondent No. 2 has pleaded that it is not admissible under the law for a Director of the Company to abdicate his personal discretion and his powers to outsiders and, therefore, he was not bound to consult the attorneys of the petitioner. The allegation that the company possessed property and assets of the value of Rs. 2,49,000 is denied and reliance is placed on a balance‑sheet properly audited alleged to bear the signature of the petitioner in which the value of the property is shown much less.

5. On the question of the winding up of the Company the contesting respondent has pleaded that the company is doing excellent work and is prepared to have the affairs of the company investigated for purposes of ascertaining whether he has discharged the duties in accordance with law and the Memo randum and Articles of Association. The lack of trust of the petitioner is based on male fides. He has submitted that the petitioner has actually returned permanently to England with no intention to come back to Pakistan and because the contesting respondent is not purchasing his shares on fanciful price he is trying to harass him by making the present application. In the counter‑affidavit filed on his behalf no plea has been raised on the question whether it is practicable to call an extraordi nary general meeting of the Company without the aid of the Court or, whether it would be desirable to allow the petitioner to act through his attorney or an officer of the Court for participating in‑the proposed meeting.

6. The only question therefore for consideration is whether it is a fit case in which this Court should exercise its discre tion under section 79(3) of the Companies Act, 1913, for calling an extraordinary general meeting for removing respondent No. 2 from the Directorship of the Company. In support of the petition Mr. J. H. Rahimtoola, the learned counsel appearing, for the petitioner, has contended that it is not necessary in this matter to adjudicate upon the dispute between the parties or to find out whether the allegations or counter allega tions made by the parties against each other are correct or not. He contended that the petitioner holds 490 shares out of 500 shares; and, therefore, stands in a stronger position than respondent No. 2. Since respondent No. 2 is not acting accord ing to his wishes, it is open to the petitioner under the Articles of Association of respondent No.1's Company to call art extraordinary general meeting for removing respondent No. 2. In this connection the learned counsel has referred to Article 89 of the Articles of Association of respondent No. 1's Company which lays down the manner in which an extraordinary general meeting may be called by Directors. It. reads as under:‑

"89.‑(1) The Director may, whenever they think fit and they shall on the requisition of the holders of not less than one‑tenth of the issued capital of the Company upon which all calls or other sums then due have been paid, forthwith proceed to convene an Extraordinary General Meeting, and in, the case of such requisition the provisions of section 78 of the Act shall apply.

(2) If at any time there are not within West Pakistan suf ficient Directors capable of acting to form. a quorum, or if the number, of Directors be reduced in number to less than the minimum number of Directors prescribed by these Articles, any Director may call in Extraordinary General Meeting in the same manner as nearly as possible as that in which meetings may be called by the Directors."

The learned counsel contended that it is the Directors alone who can call the extraordinary general meeting and since the peti tioner is not in West Pakistan, under sub‑clause (2) of the above Article respondent No. 2 alone is competent to call the extraordinary general meeting. As he is not willing to call such a meeting it has become impracticable to call it and, therefore this Court under section 79(3) of the Companies Act, 1913, should exercise its discretion and call the above meeting so that the share‑holders of the Company may be able to pass the resolu tion which, according to them, is in the best interest of respon dent No. 1 Company.

7. In order to appreciate the contention of the learned counsel it would be useful to reproduce the provisions of section 79(3) of the Companies Act, 1913. It runs as under:‑

"79(3). If for any reason it is impracticable to call a meeting of a company in any manner in which meetings of that company may be called or to conduct the meriting of the Company in manner prescribed by the articles or this Act, the Court may, either of its own motion or on the applica tion of any director of the company or of any member of the company who would be entitled to vote at the meeting, order a meeting of the‑company to be called, held and conducted in such manner as the Court thinks fit, and where any such order is given may give such ancillary or consequential directions as it thinks expedient, and any meeting called, held and conducted in accordance with any such order shall for all purposes be deemed to be a meeting of the Company duly called, held and conducted."

It will be noticed that this provision of law provides for two separate contingencies. Firstly, the impracticability of calling a meeting of the company in any manner in which meetings of the Company may be called and, secondly, conducting the mating of the company "in manner prescribed by the Articles or this Act". Thus, the question of the impracticability or otherwise of calling a meeting has to be decided ire the light of the Companies' Articles of Association. In support of his contention Mr. Rahimtoola has placed reliance on the decisions in the following cases:‑‑

(1) Bal Krishna Maheshwari v. Uma Shanker Mehrotra and another A I R 1947 All. 361.

(2) The Indian Spinning Mills Ltd. and others v. His Excellency Ltd. General Madan Shamsher Jang Bahadur Rana and others A I R 1953 Cal. 355 and

(3) Mrs. A. Ananthalakshmi Ammal v Tiffin's Barytes, Asbestos and Paints Ltd. A I R 1952 Mad. 60.

In these cases it was held that in exercising its discretion the Court should decide the question of impracticability or other wise of calling a meeting within section 79(3) primarily in the light of the Articles of Association of the Company, unless such Articles contravened any mandatory provision of the Act or there were no relevant Articles of Association governing the matter. In the Calcutta case it was further held that in the above provision of law the word "impracticable" means impracticable from a reasonable point of view. In the Madras case it was observed as under:‑

"Though an election of directors is ordinarily a non‑con troversial subject in respect of a Company whose affairs are running smoothly, it cannot be called a formal subject where there are factions in the share‑holders. It is an, important item of business and the Court may appoint an independent Chairman to preside over the general meeting of the share holders. Such an appointment cannot be objected to as an interference by the Court with the internal Management of the company as sections 76 and 79(3) expressly empower the Court to call a general meeting which also includes a power to appoint a person to preside over it."

According to these decisions where a meeting cannot be held in accordance with the Articles of Association then in law the holding of a meeting would be impracticable, and, in such circumstances, it is open to the Court, on taking a common sense view of the matter, to call a meeting under section 79(3) for carrying out the object of a limited company.

8. On the other hand, Mr. Muhammad Ali Saeed, the learned counsel for respondent No. 2, has contended that in the case of a private limited company it is to be treated more or less as a partnership and the Courts should apply the same principles in the conduct of its business as in disputes to respect of Partnership matters. In this connection the learned counsel placed reliance on a decision of the Supreme Court in Ladli Prasad Jaiswal v. The Karnal Distillery Co. Ltd. (PLD1965SC221). In that case their Lordships observed as under.‑

In the case of‑a private limited Company the tendency of the Court hats uniformly been to treat it more or less as a partnership and to apply the same principles in the winding up of a private limited company as would entitle a partner to have a partnership firm dissolved. Commonly the exclusion of a partner from the Management of the firm, the existence of a state of deadlook between the partners or the justifiable lade of confidence in the Management have been regarded as just and proper grounds for dissolving a private limited company."

In my opinion this contention helps the petitioner rather than the contesting respondent because if a private limited company is treated on the same basis as partnership business, in case there is deadlock between 'the partners it would be the duty of the Court to protect the interest of the partners who have the majority of the shares and if there is no other obstacle to see that tote objects of the partnership business are fulfilled in accordance with the wishes of the majority of the partners.

9. Mr. Muhammad Ali Saeed further contended that for applying the provisions of section 79(3) the Court must have reason to be satisfied that it is impracticable to call a meeting of the company or to hold or conduct the meeting of the company in the manner prescribed by the Act or the Articles. Secondly, the power vested in the Court is discretionary. It is not a power which the Court must exercise. It is not a manda tory obligation upon the Court. It is an alternative remedy to be applied only when the normal machinery of Company Management fails. The learned counsel relied on another Indian decision Bengal and Assam Investors Ltd. v. J. K Eastern Industries Private Ltd. (A I R 1956 Cal. 658). In that case Mukherji, J., observed as under:‑

"It is not the purpose of section 186 that the Court should intervene to conduct a company meeting not in the manner prescribed by the Act or by the Article of the company and to override the express provisions thereof. Naturally enough when the Court directs a meeting to be held under section 186 of the Act it must necessarily modify or supplement the Articles or the Act acid that is why express provision is made for the same under section 186(1)(b) of the Act. But that provision for modifying or supplementing the Articles or the Act is only with a view to enable the Court to call, hold and conduct the meeting under section 186 of the Act which normally it cannot without contravening the Articles and the Act."

The learned Judge further observed.‑‑

"The word "impracticable" appearing in section 186 must be given a practical meaning. It must be understood to be impracticable from the business point of view. It must not be held impracticable on the slightest excuse that the directors cannot agree."

Later on the learned Judge observed "that the power given to the Court is great and it should be sparingly exercised." In my opinion in a case which arises under section 79(3) of the Companies Act, 1913, the only consideration for the Court would be when a question is raised that it is impracticable to call a meeting of a limited. company, whether in the particular circumstances of the case, the desired meeting of the company could, as a practical matter, be called arid conducted. In a proper case it is open to the Court to intervene in order to safeguard the interest of the majority of the share‑holders. In view of this it is abundantly clear to me that the extraordinary general meeting, which is sought to be called under Article 89 of the respondent No.1 Company, cannot be called because the two Directors are at loggerheads and are not agreeable to call a meeting in accordance with the procedure laid down in the said Article. In fact the petitioner, who is the Managing Director, is outside Pakistan, and it is only respon dent No. 2 who can call a meeting in terms of Article 89(2). Since he is not prepared to call the required extraordinary general meeting there is no doubt that it is impracticable to call it in terms of section 79(3) of the Companies Act, 1913. There being a deadlock and justifiable lack of confidence in respon dent No. 2's Management, I am inclined to call the proposed meeting provided there is no other hurdle in the way of the petitioner.

10. It must have been noticed that the petitioner has further asked that in case this Court call the proposed extraordinary general meeting for removal of respondent No. 2 he should be permitted to be present and vote at the meeting through an attorney, agent or officer of the Court in the same manner as if the petitioner were personally present at the meeting. In this connection it will be noticed that under Article 95 of the Articles of Association two members present in person or by proxy and entitled to vote shall be a quorum for all purposes at any ‑General Meeting except as otherwise provided in the Articles. Then Article III which relates to the manner in which the right of proxy can be exercised provides as under:‑

"111. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing or if such appointer is a corporation, under its common seat or under the hand of an officer or attorney so authorised. No person shall be appointed a proxy who is not a member of the Company and qualified to vote, save that a corporation, being a member of the Company, may appoint as its proxy one of its officers, or some other person though not a member of this Company."

Mr. Rahimtoola frankly admitted that the petitioner cannot appoint any person as proxy who is not a member of the Company. Admittedly, there are only two members of the respondent No. 1 Company, namely, the petitioner and respondent No. 2. Petitioner will not be giving the proxy to respondent No. 2. Therefore, he shall have to appoint somebody who is an outsider which is not permissible under the Articles of the Association of respondent No. It Company.

11. The other subsidiary point, therefore, that arises for consideration is whether this Court in exercise of the power vested in it under section 79(3) can settle the mode in which the proxies will be used in the proposed meeting. This question has received my anxious consideration. As already stated, there are tyro considerations which should weigh with the Courts in cases arising under section 79(3). In the first place the Court must come to the conclusion that it is impracticable to call a meeting of the Company in any manner in 'which meetings of that Company may be called. Secondly, that it is impractic able to conduct the meeting of the company in manner prescribed by the articles or the Act. I have already held that in the present case it is impracticable to call a meeting of respondent No. 1 Company in the manner in which it may be caller. Mr. Muhammad Ali Sayeed contended that no power vests in this Court to modify the Articles of Association in order to ensure the quorum of the proposed meeting or for passing an effective resolution.

12. On the other hand, Mr. Rahimtoola contended that such a power is vested in this Court. In support the learned counsel has urged that the following are the key words far exer cising this power:

"Order a meeting of the company to be called, held and conducted in such manner as the Court thinks fit, and where any such order is given may give such ancillary or consequen tial directions as it thinks expedient, and any meeting called, held and conducted in accordance with any such order shall for all purposes be deemed to be a meeting of the company duly called, held and conducted."

It must have been noticed earlier that even Mukherji, in the decision cited by the learned counsel for the respondent has recognised that in such cases when a Court directs a meeting to be held it must necessarily modify or supplement the articles or the Act for achieving the object of the meeting. His view is that the meeting must not be held as impracticable on the slightest excuse that the Directors cannot agree., Prima facie therefore it appeared to me that if in the circumstances of a particular case it was impracticable to conduct a meeting according to the rules provided in the Articles of Association, they could be modified. In this sub‑continent the decided case on this point has dealt with situations such as the appointment of Chairman or relaxation of rules in respect of notice or place for holding the meeting of a company. They are silent on the point of relaxation of rules for voting by proxy.

13. It seems 'to me that the answer to this problem depends on the interpretation of the words "conducted in such manner as the Court thinks fit." In its narrow sense it would only mean control or the Management of the meeting. But in its wider sense it can also include the relaxation of rule about quorum or exercise of votes by share‑holders by proxy. Supposing in a given case it is not possible to form a quorum or it is not possible for a large number of share‑holders to exercise the right of vote without proxy, which cannot be exercised because under the rules and regulations of the company it can only be given to a member and no member is available for this purpose, will it not be a good ground for exercising the above power vested in this Court After careful consideration I have come to the conclusion that these will be good grounds for relaxation of the rules in order to remove the impracticabi lity for conducting the meeting in the manner prescribed in the Articles of Association or the Act.

14. I am fortified in this view by a decision of the Scottish Courts In re: Edinburgh Workman House Improvement Co. ((1935) S C 56). In that case it was held that the expression "Impracticable to conduct the meeting of the company in the manner prescribed by the Articles" is sufficient to cover a case in which it is impracticable owing to the terms of the articles and the state of share‑holding in the company to get a quorum present. This decision is quoted at page 503. of Vol 1 "Words and Phrases Judicially Defined" by Roland Burrows (1916 Ed.).

15. In section 153 of the Companies Act which deals with the powers of the Court to enforce a compromise between creditors and members, it is provided that where a compromise or arrangement is proposed between a company and its creditors, etc., the Court may order a meeting of the creditor or of the members of the company to be called, held and conducted in such manner as the Court directs. In that connection question has often arisen whether under this section the Court has power to settle a form of proxy. In re: Taia Iron and Steel . Co. (A I R 1928 Bom. 80), It was held that these words are wide enough to cover directions about the manner in which a proxy can be used because the form of the proxy is part of the conduct of the meeting. Similarly, in Lawrence Dawson land another v. J. Hormasji and others (A I R 1932 Rang. 144), it was held that a Court exercising power under this provision of law, possesses jurisdiction to prescribe and settle the terms of the proxy from by which proxies are to be appointed.

16. The basic authority for the above view is the decision of the English Appeal Court Ire re: English, Scottish and Australian Chartered Bank ((1893) 3. Ch. Div. 385). In that case the Judge directed meeting of the share‑holders and creditors to be held in order to ascertain their wishes as to the scheme of reconstruction of a Banking Company. It being necessary that this should be done without delay and the great majority of the shareholders being resident, in Australia, he trade an order directing a form of proxy to be sent by the Official Receiver by telegraph to Australia to be dept sited at the office of the Company in the principal cities in Australia and the particulars and number of proxies for and against the scheme to be telegraphed for counting at the London meeting. Some of the Scottish and English creditors objected that the Judge had no power to settle the form and the manner in which a proxy should be used. The Appellate Court affirmed the decision of Vaughan Williams, J., that the Court was competent to do so. In this connection Lindley L. J. at page 411 observed:

"Now, it appears to me, under the authority of section 91 of the Act of 1862, this novel form of order is not be3ond the power of the Judge. He had power to direct that these proxies should be filled up in Australia, that they should be deposited in the offices which are mentioned and that the result: of the proceedings might be acted upon in this country even before the proxy papers came over. I think it was within his power to do it, and, being within his power to do it. I do not hesitate to say it is a power with which we should not dream of interfering. That is what was done. Therefore, so far as that somewhat important point is concerned, it appears to me there was nothing irregular in the proceedings at this meeting.

17. In the light of the above discussion I am satisfied that this Court is competent to settle the form of proxy and issue directions to ensure the quorum of the proposed meeting.

18. It further appears to me that the mere fact that the petitioner has settled down in. England is no ground to decline to exercise the above power vested in this Court. It is not disputed that the respondent holds only 10 shares out of 500 shares. If he is allowed to continue with the Management of the respondent company against the wishes of majority share holder, it would amount to imposing the will of a microscopic minority on the majority. "This is against the concept and principles on which private limited companies are managed. In caste of deadlock it is always desirable to carry out the wishes of the majority. I would, therefore, hold that the petitioner is entitled to both the reliefs claimed by him.

19. On the view that I have taken of the matter I would direct that an Extraordinary General Meeting of respondent No.1 Company be called for a suitable date to consider the resolution of the removal of Mr. Alex D'Souza from the office of Director of the Company. This meeting will be held after giving more than three weeks' notice to the share‑holders. I would further allow the petitioner to be present and exercise his right of vote as share‑holder by proxy in favour of an outsider in the said meeting. This meeting will be called and conducted by a gentleman appointed by this Court after taking into considera tion the suggestion made by the counsel for the parties.

20. In the result, the petition is allowed with no order as to costs.

K.B.A.

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