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Decided On: 04.08.2005

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S. Balasubramanian, Chairman

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1. The above petition filed under Section 167 of the

Companies Act , 1956 seeking for directions to Delhi & District

Cricket Association (Association) was disposed of by an order dated

17 th December, 2004 directing DDCA to hold the Annual General Meeting within 18 days
from the date on which the civil court authenticated the proxy forms. The petitioner has

now filed the present application CA 2 of 2005 seeking for fixing a time frame

within which the AGM and the election is to take place and also for grant of
orders to the applicant to hold the AGM and election by casting personal votes by

effecting publication of notice in the newspaper widely circulated in Delhi.

2. The facts of the case are : The Association is registered under Section25 of
the Companies Act without any share capital and is presently having about 4200

members. The last AGM of the Association was held on 4.4.2002 and in

terms of Section 166 of the Act , the next AGM

should have been held on or before 4.7.2003. The petitioner alleged that the office

bearers who would have completed their term of office on 4.7.2003 were

purposely delaying/avoiding holding of the AGM with a view to continue in

office and as such he sought for directions to the Association to hold the AGM which
should have been held on 4.7.2003. During the pendency of the proceedings,
the Association decided to hold AGM on 20.12.2004 and accordingly by an order dated
8.11.2004, this Board directed the Association to hold the meeting on that day and it

also appointed Shri Justice Jaspal Singh as Chairman of that meeting.

3. Thereafter, the Association filed an application seeking for extension of time

to hold the meeting on the ground that its application bef ore the civil court seeking for
necessary numbering and authentication was still pending and that the Association would

require at least 18 days to hold the meeting from the date of authentication.
After due hearing, this Board passed an order on 17 th Dec. 2004 directing the
Association to hold the AGM within 18 days from the date on which the civil court
authenticated the proxy forms.

4. In the present application, the petitioner has complained that in collusion with the
decree holders in the suit, the Association has been getting repeated adjournments

before the learned civil judge only with a view to delay the holding of the AGM.
With a view to get the matter expedited, the petitioner got himself impleaded as a party

in the suit. The civil court permitted the petitioner to inspect the record of

members of the Association but the Association ref used to allow the
inspection. The matter is still pending before the civil court and the Association cannot

take shelter under the decree of the civil court in delaying/avoiding

holding of the AGM. Accordingly, he has sought for holding the AGM and the

election by casting personal votes by effecting publication of notice in the

newspaper widely circulated in Delhi. He has also sought for an interim order restraining
the office bearers from taking any decision till the AGM is held. .

5. In the reply, the Association has questioned the maintainability of the

application on the ground that once a final order has been passed, this Board has no
powers to review the said order. The Association has taken all steps to get the proxies
authenticated by the Civil Court but it is the petitioner who has got himself impleaded as
a party in the suit is delaying the proceedings before the civil court. The petitioner never

approached the Association for inspecti on of the record of members.

6. However, at the instance of the civil court, the petitioner was given

inspection and the fact of the same is recorded in the order of the
civil court dated 7.5.2005. After inspection, the petitioner alleged discrepancies in the

record of members and therefore the civil court has directed the Association to

file a list of members and the matter has been adjourned to 23.7.2005. Thus, it
is evident that it is the petitioner who is delaying the authentication of the
proxies by the civil court and the Association is not responsible for any delay.

Accordingly, the Association has sought for dismissal of the application.

7. Shri Sarkar, Sr. Advocate, appearing for the petitioner submitted: The civil court has

no jurisdiction to pass the order dated 19.7.1994 stipulating that for election of
office bearers in all the AGMs, the proxies should be authenticated by the civil court. The

jurisdiction relating to AGMs is vested only in this Board in terms of

Section 167 of the Act and as such, the order of

the civil court is not a bar to pass appropriate order. Further, there were only two
decree holders in the civil court as against 4200 members and therefore the said decree

is not binding on the members who are not parties in the civil suit. In view of

this, the Association cannot take shelter under the order of the civil court to
delay/avoid holding the AGM. As undertaken before this Board, the Association should

hold the AGM without any further loss of time and this Board has the power to

give such direction, not withstanding the decree of the civil court. Even
assuming that there are some disputes regarding membership, directions could be
issued for keeping the votes cast by disputed members separately. In addition to non

election of office bearers in terms of the Articles, even the annual

accounts of the Association have not been passed in the AGM. If at all, the

decree of the civil court is binding, it relates only to election of office

bearers in annual general meetings and not for transacting other businesses like

adoption of accounts etc. Likewise, there is no need to get the proxies

authenticated by the Civil Court in respect of an EOGM. Therefore, either AGM

should be convened only for adoption of the accounts for which there is no
need to get the proxies authenticated by the civil court or an EOGM should be ordered to

be held in terms of Section 186 of the Act both for

election of office bearers and for adoption of accounts.

8. Shri Choudhar y, Sr. Advocate, appearing for the Association submitted: As far as the

jurisdiction of the civil court to pass a perpetual order is concerned, this Board
cannot sit on judgment over that order as only a superior court can decide this issue. As
long as the decree is in force, whether it is good or bad, the same is binding on the

Association, irrespective of the number of decree holders. Further,

since the petitioner has got himself impleaded as a party to the civil suit, he is equally
bound by the decree. The Association has already submitted all the proxies to the civil

court and because of the delaying tactics by the petitioner by raising various

objections, the authentication of proxies has been delayed. Even in the hearing

held on 23.7.2005 before the civil court, the petitioner raised objections on the list

of members filed by the Association before the court and as such the court had now
adjourned the matter to 20.8.2005 to enable the petitioner to verify the said list. Thus, it
is evident that while he is seeking for directions from this Board to hold the AGM, he is

frustrating the efforts of the Association in getting the proxies authenticated by

the civil court. If the petitioner withdraws all his objections before the civil court, the
proxies could be authenticated and the Association will hold the AGM within 18 days
thereafter as directed by this Board.

9. I have considered the pleadings and arguments of the counsel. As far as the

jurisdiction of this Board to consider the application is concerned, it is to be

noted that this Board has no power of review. I am considering this application
only because the petitioner has complained that the Association is avoiding complying

with the order of this Board dated 17 th December 2004 as every court has the
power/duty to ensure that its order is complied with. Therefore, I do not find any

lack of jurisdiction in dealing with this application. The direction contained in the
order dated 17th December 2004 that the Association should hold the AGM within 18

days of authentication of the proxies by the civil court was on

account of the following directions given by the civil court in its order dated

19.7.1994 m
   

   


  
 
   
 

     
 

        
 




   
  
 
 
     


            

 

  
           

 
 

 
     
  








 

  


   


     

      

   

 
 
 
 
  


  
    

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 m Shri Sarkar, contended that the civil court has no jurisdiction to
pass such a perpetual order. It is a settled law that even a bad order or an order passed
without jurisdiction will continue to be in force unless and until the same is set aside by a
superior court. In this connection I may refer to two decisions cited before me recently.

10. In þ
    

   

 
 1966 SC 1661, the Apex
Court has held that a wrong decision by a court having jurisdiction is as much binding
between the parties as a right one and may be superceded only be appeals to higher

tribunals or other procedure like review which the law provides. Likewise in þ


 

    



 1996 SCC 435 the Apex Court has held
that even a void order or decision rendered between parties cannot be said to be non

existent in all cases and all situations and ordinarily: such an order will, in fact,
be effective inter partes until successively avoided or challenged in a higher forum. This

being legal position and in conformity with the principle of comity of

courts, I do not propose to pass any order contrary to that of the civil court.
He further submitted that the decree is not binding on members who are not parties to
the civil suit. Admittedly, the petitioner has impleaded himself in the civil cour t
proceeding and as such that decree is binding on him and since the decree relates to

holding of AGMs by the Association, the Association cannot hold any AGM for

election of office bearers as long as the decree subsists without getting the
proxies authenticated. Shri Sarkar advocated that AGM could be held only for the

purpose of adoption of accounts for which there is no need to get the

proxies authenticated by the civil court or in the alternative this Board could exercise

its   powers under Section 186 of the Act , to order

holding of an EOGM for adoption of accounts and election of

office bearers. Bifurcating the businesses to be transacted in the AGM at this stage

would not only amount to modification of the order of this Board

dated 17.12.2004 for which this Board has no powers, it would also amount to indirectly

circumvent the civil court order, as, in terms of the Articles, share holders have

the power to issue proxies for any general meeting irrespective of the business

to be transacted. As far as invocation of   powers of this

Board under Section 186 of the Act to convene an EOGM is

concerned it is relevant to examine the provisions of this Section

. Section 186 reads m 
 



 


  

   



  
  
 

 

 
  



   

   
    


  


   


 


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mThis provision is applicable only in case of

meetings other than annual general meetings, the subject of which is

dealt with by provisions of Sections 166/167. It is evident from the

provisions of this Section that the powers under this Section

can be invoked only when it is established that it is impracticable to call a meeting other

than an AGM. The petitioner has not given any details of any such meeting that

has become impracticable to hold. The foundation of this suggestion has arisen

out of the inability of the Association to hold annual general meeting

in view of the proceedings pending before the civil court. If a company is

unable to hold a meeting in view of legal proceeding, it cannot be construed as

"impracticable". What Shri, Sarkar seeks to transact in the EOGM sought to be held

without the proxies being authenticated by the civil court, relates to the businesses

of approval of accounts and election of office bearers. Both the

businesses are within the domain of annual general meeting and cannot be
transacted in an EOGM. Even otherwise, if the Board has to direct the Association to

convene and hold an EOGM under Section 186 of the Act to

transact the businesses of adoption of accounts and election of

 office bearers, it would only amount to circumvent the order of the civil

court. No court can allow a party to seek an order having effect of

circumventing the order passed by another court. It is on record that on a petition by

the same petitioner, an order was passed under Section 167 directing
the Association to hold the meeting subject to its getting the authentication done by the

civil court which is still pending. Further, because of the anxiety expressed by
the petitioner that the AGM should be held expedit iously, this Board advised him to

approach the learned civil judge for quicker disposal of the matter pending

before him as early as possible. I find from the order of the civil court dated
19.3.2005 that the petitioner was permitted to inspect the record. In the order dated
8.4.2005, it is recorded that the petitioner was to inspect the entire record on
30.4.2005. In the order dated 7.5.2005, it is recorded that the petitio ner had inspected
the records and had found various discrepancies in the records and as such the court

directed the Association to furnish the entire list of members with various
details and adjourned the matter to 23.7.2005. In the hearing held on 12.7.2005, when
I found from the order dated 7.5.2005 that due to some objections raised by th e
petitioner, the civil court had adjourned the matter to 23.7.2005, I asked the learned
Counsel for the petitioner to advise his client not to raise any objections before the civil
court on 23.7.2005 and accordingly adjourned the matter to 25.7.2005, with the hope
that the civil court proceeding would come to an end on 23.5.2005 paving way for
holding the AGM. However, on 25.7.2005, the counsel for the Association placed before

me a copy of the order of the civil court dated 23.7.2005. In this

order it is recorded that the petitioner had submitted before the court that the list
furnished by the Association was not genuine and as such had disputed the documents
filed by the Association. The court therefore directed the Association to supply a

copy of the documents to the petitioner for verification and has adjourned the
matter to 20.8.2005. The proceedings before the civil court indicate that the petitioner is

in a way responsible for delaying the authentication of the proxies by the civil
court. While delaying the proceedings before the civil court for whatever may be the
reasons, the petitioner is seeking an order from this Board which will have the

effect of circumventing the order of the civil court, which cannot be

permitted. Under these circumstances, I am of the view that if the petitioner is

serious and sincere that the AGM should be held expeditiously, he should cooperate with
the Association in getting the proxies authenticated by the civil court on 20th August,

2005, i.e. the date fixed for hearing by the civil court instead of raising various

objections, which he could always raise before the Chairman of the meeting.
11. Thus on an over all appreciation of facts of the case, I find that

the complaint of the petitioner that the Association is willfully avoiding to

comply with the order of this Board is not established. Other directions sought
for by the petitioner cannot be granted for reasons already elaborated ante. Accordingly,
this application is dismissed.

12. Before parting with this order it is necessary to record that learned advocate for the

petitioner had misrepresented before the High Court, as seen from the order of
the High Court, that the petition filed in May 2004 still remained undecided, and on that

basis the High Court has directed that the petition should be disposed of
expeditiously. In fact final order on the petition had already been passed as early as in
December 2004 itself. The present application was mentioned only on 30.5.2005. The
High Court remanded the matter to this Board to consider the interim relief sought for by
the petitioner. This interim relief, however, was not pressed during the hearing before
this Board. Even otherwise, the interim prayer, being to restrain the office bearers from

taking any decision till the AGM is held, is beyond the scope of the powers

of this Board under Section 167 as has been elaborately dealt

with in the order dated 8.11.2004.