1997CLC783 (PLP)

The Chairman can adjourn the meeting even without the consent of the meeting, in any of the following situations: (a) Where he is given express power to do so by the company's Articles. (b) Where there is persistent disorder and a short adjournment is necessary to let the disturbance subside and thus enable the business to be proceeded with. (c) Where the number of the persons present falls short of the quorum.

6. Salisbury Gold Mining Company Ltd. v. Hathorn and others (A.C.1897 page 268 held that: "The power vested in the Chairman is a power to adjourn or not adjourn at his option, subject to this‑‑that if he adjourns it must be with the consent of members present; if ,he does not adjourn, he may dispense with that consent.

7. Reports of Company Cases, Volume 42, 1972: (i) that it is settled law that when a meeting is called, no Chairman can arbitrarily adjourn it or disperse it at his own choice, without the consent of the members, unless the business for which it was convened has been concluded. The power of adjournment vests in the majority of those present at the meeting. If the Chairman should vacate the chair or adjourn the meeting regardless of the views of the majority those remaining, even if a minority, can appoint a Chairman and conduct the business left unfinished by the former Chairman.

8. Shafiq Ahmed v. Mirza Muhammad Anwar Beg (PLD 1968 Lahore 367), it has been held: In order to apply Order 11, Rule 2, it is not necessary that all the allegations made in the two plaints should be taken and that the bar would apply only when they are identical.

9. Sh. Maqbool Elahi and 2 others v. Khan Abdul Rahman Khan and 6 others (PLD 1958 (W.P) Lahore 721):

81. There is nothing in the Articles of Association of the company to indicate whether the Directors can, during their meeting, take up any matter which is not on the agenda. That the agenda for the meeting of 16th September consisted only of one item, namely to consider the requisition of certain shareholders for the convention of an extraordinary general meeting for examining the affairs of the company, is admitted. It was not a meeting for the filling up of the vacancies on the Board of Directors, and the two or three absent Directors had no notice of the agenda which was in the mind of the Chairman. Article 120 was relied upon as empowering the Directors to transact any business at a meeting, and it reads thus:‑‑ "Article 120.‑‑A meeting of the Directors for the time at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by or under the Article of the company for the time being vested in or exercisable by the Directors generally." Mr. Khalid M. Ishaq the learned counsel for the respondent has referred (1) Subject Index Companies Ordinance, 1984 compiled by M. Aslam under which applications filed under sections 5, 67, 83, 97, 140, 263, 264, 275, 282, 288, 290, 294, 309, 339, 380, 386, 392, 404, 434; 440, 441, 442, 450, 483, 503 are not maintainable. (2) Datta on the Company Law: Notice need not be in a particular form. It may not contain an agenda. In certain cases actual notice need not be issued if all the Directors attend the meeting without any objection. (3) A Ramaiya Guide td the CompAnies Act where it is mentioned; "The law does not require an agenda for the meetings of the Board. Abnash Kaur v. Lord Krishna Sugar Mills Ltd., (1974) 44 Com. Cases 390, 413 (Del.) The Board of Directors can transact business even without a formal agenda. ‑Sunil Dev v. Delhi and District Cricket Association, (1990) 2 Comp LJ 245, 254 (Del.). This is the universal practice in all advanced Western countries. The Model Business Corporation Act generally adopted by the Corporations in the United States of America provides: "Neither the business to be transacted‑at, nor the purpose of any regular or special meeting of the Board of Directors or any committee designated thereby need be specified in the notice or waiver of notice of such meeting unless required by the bye‑laws." (4) Jewan v. Hassan Muhammad, etc. (1989 CLC 2393). In this authority Lahore High Court held that: Plaintiff could challenge mutation in previous suits as it stood attested at time of filing of previous suits and as such by omitting to do so in previous suit, plaintiff could not sue in respect of mutation through subsequent suit in view of rule 2, 0.11. While hearing CMA 1703/94, the Court passed the following order: "So far CMA 1703/94 is concerned learned counsel for the parties state that this application be heard alongwith the main application. Order accordingly. On 8‑5‑1995, the Court passed the following order:‑‑ "Mr. Khalid Ishaq submits that the petition is not maintainable because there is no provision in the Companies Ordinance, 1984 permitting the filing of such a petition. He submits further that if the petitioner has any grievance he may, if he so chooses, file a suit but certainly cannot seek any relief by way of petition. Mr. Mansoorul Arfin requests that the hearing be adjourned to enable him to answer the objection. By consent adjourned to a date in office in the second week of May, 1995 to be fixed according to roster. " Subsequently connected suit bearing No.348/95 was filed in the Court on 15‑5‑1995 with the following prayer. (a) declaration that 22nd Annual General Body Meeting was rightly held on 1‑9‑1994 and election of tenant Directors including that of plaintiffs rightfully took place and the plaintiffs and the defendants 5 and 6 rightly elected as Directors of the defendant No. l in that meeting held on 1‑9‑1994 and are entitled to act as directors of the Defendant No. l and that the fixation of the alleged election and of holding alleged 22nd Annual General Body Meeting of the defendant No. l on 6‑11‑1994 was/is illegal, and of no effect and defendants 2 to 5 were and are not the rightfully elected Directors of the defendant No. l; (b) an order restraining the defendant No. l permanently from treating the defendants 2 to 4 and defendant No.5 as Directors of defendant No. 1 by virtue of illegal meeting and election of 6‑11‑1994; (c) cost of the suit; (d) grant such other relief or reliefs as this Honourable Court may deem fit and proper in the circumstances of the case. " In this background of the matter, I have considered the contentions of the learned counsel for the parties, the Managing Director appointed by the Government according to the Memorandum and Articles of Association referred hereinabove: If the Managing Director or either of the Ex officio Directors so desires, he may ask that a resolution passed by the Directors be suspended pending a reference to Government in the appropriate department. On such reference Government may decide that the resolution shall have no effect or shall have effect in a modified form. The Article 58 of the Memorandum and Articles of Association referred hereinabove also authorises Managing Director or any other Director nominated by the Provincial Government if so desires, he may ask that the execution of the resolution passed by the Directors be suspended pending reference to the Provincial Government in the appropriate department. On such reference, the Provincial Government may decide that the resolution shall have no effect or shall have effect in a modified form, and such decisions shall be binding on the company. The provisions of section 183 would be very advantageous for the decision of this petition which provides: S.

183. Certain provisions not to apply to directors representing special interests. ‑‑‑Nothing in section 178, section 180 or section 181. shall apply to‑‑ (a) Directors nominated by the Pakistan Industrial Credit and Investment Corporation Limited or by a Corporation or Company formed under any law in force and owned of controlled, whether directly or indirectly, by the Federal Government or a Provincial Government on the Board of Directors of a company in or to which the said Corporation or such Corporation or company has made investment or otherwise extended credit facilities; (b) Directors nominated by the Federal Government or a Provincial Government on the Board of Directors of the Company; or (c) directors nominated by foreign equity holders on the Board of the Pakistan Industrial Credit and Investment Corporation Limited, or of any other company set up under a regional cooperation arrangement approved by the Federal Government: Provided that, where a Director referred to in clauses (a), (b) or (c) is nominated, such number of the votes computed in the manner laid down in subsection (5) of section 178 as is equal to the minimum number of votes which would have been sufficient to elect such Director if he had offered himself for election shall stand excluded from the total number of votes otherwise available at an election of the Directors to the authority or person nominating him: Provided further that a Director nominated under this section shall hold office during the pleasure of the. Corporation, Company, Government of Authority which nominates him." The respondent was established vide Government Resolution No.24‑I, B/47‑1 dated 2nd June, 1947 set out below:‑‑ (i) Resolution. ‑‑‑With a view to bring about Industrial Development of Sindh, Government are pleased to direct that a company called "The Sindh Industrial Trading Eastes Company" should be formed to establish and manage trading estates at Karachi, Hyderabad and Sukkur, on the following lines:‑‑ (ii) The functions of this Company will be to acquire land for these trading estates, to lay out and develop such land by construction of roads and drainage and the provision of light and where either at the request of a particular trader or otherwise it appears to be advantageous to do so, to construct and rent premises to traders. The company will make such charges for water and electricity supplied and for the rent of land and premises as to enable it to pay its expenses and interest at a rate not higher than 4 per cent. on its capital outlay." The Article 8 of the Memorandum and Articles of Association provides as: Article

8. If upon the winding up or dissolution of the company there remains, after satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the Company, but shall be paid or transferred to the Provincial Government of Sindh or to its nominee to be applied in such manner as it may direct. The meeting scheduled to be held on 1st September, 1994 was adjourned by the competent authority by exercising powers vested in him under the Articles of Association. The proxies filed by the members of the Board of Directors produced by Rizwan Ahmed in his affidavit in rejoinder mentioned hereinabove clearly show that in view of those proxies and other compelling circumstances proposed meeting was rightly adjourned. With all humbleness and with due respect to the authors and the authorities referred by Mr. Mansoorul Arfin, learned counsel I am clear in my mind that the relevant portions of the books and the authorities are not relevant and helpful to the case of the petitioners. The word ask provided in the Memorandum and Articles of Association has been defined in the Oxford English Dictionary with the meaning as follows: To ask as by right, call for, demand, to ask a person for a thing, to make request, to need, require, demand, call for, to ask, to come, to invite. The literary meaning of the word ask is "as by right, call for, demand". The books and provisions of the Companies Ordinance referred hereinabove by Mr. Khalid M. Ishaq learned counsel are very much relevant and applicable to the case of the respondent. The meeting was adjourned by the Managing Director while exercising his powers, and subsequently petitioners attended the meeting on 30‑10‑1994 of Board of Directors and thereafter they even did not make any objection or protest. The total sum and substance of this discussion is that J. Misc. Application is not maintainable which must fait and the same is dismissed. While hearing CMA No.1703/94 on 3‑11‑1994 the Court passed the following order: "Mr. Mansoorul Arfin, Advocate for the petitioner. Mr. Jawed Siddiqui, Advocate for the Respondent. It is almost 1‑30 p.m. and no time is left to take up this matter which, it appears, will take quite some time. As such by consent it is adjourned to a date in office and till further orders of this Court neither the Directors who claim to have been elected in the alleged general body meeting held on 1‑9‑1994 nor the Director who may be elected in the alleged general body meeting to be held on 6‑11‑1994 will attend the meeting of the Board of Directors of the respondents." Prima facie as discussed hereinabove balance of convenience is not in favour of the petitioners, moreover they are not likely to suffer an irreparable loss or injury whatsoever but on the contrary the respondents are likely to suffer l irreparable loss if this ad‑interim order is allowed to continue. Consequently this ad interim restraining order is hereby re‑called. In consequences thereof CMA No.2757/95 pending for hearing in Suit No.348/95 between the same parties stands dismissed having become infructuous. A.A./A‑98/K Order accordingly.