Judgment:
C.M. Nayar, J.
(1) This petition is directed against the respondents to carry out the legal obligation as is cast upon them under Section 188 of the Companies Act, 1956 (hereinafter referred to as 'the Act') by circulating the four Resolutions and include them in the agenda for Annual General Meeting which is scheduled to be held on September 30, 1996, which were forwarded to respondent No.2 on August 12,1996. The said communication reads as under:
'TO The Company Secretary, Bharat Heavy Electricals Limited, Bhel House, Siri Fort, New Delhi-110049 Dear Sir, Sub : Submission of resolutions for the the ensuing annual general body meeting of share holders of the company Please find enclosed herewith, as Annexure I, four resolutions (along with required explanatory statements) which I intend to move on my own behalf and also on behalf of a number of other share holders of the company at the ensuing Annual General Body Meeting (AGM) of the company. Vide their letters dated 25.7.96, shareholders as per the enclosed list (authorisation letters are being submitted herewith in original giving names, folio numbers and signatures) have authorised me to represent them, move resolutions on their behalf and also do all other acts mentioned in their aforesaid letters. An affidavit in support of this is also being submitted herewith. thereforee, it is requested that the enclosed resolutions be included in the agenda of next Agm and the same should also be circulated along with the agenda. Necessary charges as per law/rules, if any, for the same shall be paid to the company through a bank draft after receiving communication in this respect from your end. Thanking you, Yours truly, sd/- (Naresh Kumar Jain)'
(2) The respondent company rejected the request of the petitioners vide communication dated September 2, 1996. The operative part reads as follows:
'WITH reference to your letter dated 12th August, 1996 submitting four resolutions for circulation in the ensuing Annual General Meeting of Bhel, I am directed to inform you that the requisition for the resolutions proposed by you is not covered by any provisions of the Companies Act; in particular it does not meet the requirements of Section 188 of the Companies Act. Moreover, the authorisation letters issued in your favor are not in accordance with law. Hence it has been decided not to circulate the resolutions proposed by you for the ensuing Annual General Meeting of the Company scheduled to be held on 30th September, 1996.'
(3) The petitioners felt aggrieved by this communication and accordingly have prayed that the same be quashed and respondent No.2 be directed to include the Resolutions in the Agenda of the Annual General Meeting of respondent No.2 which is scheduled to be held on September 30, 1996. It may be necessary to reproduce the provisions of Section 188 of the Act which makes the following reading:
'188.Circulation of members' resolutions (1) Subject to the provisions of this section, a company shall, on the requisition in writing of such number of members as is hereinafter specified and (unless the company otherwise resolves) at the expense of the requisitionists,- (a) give to members of the company entitled to receive notice of the next annual general meeting, notice of any resolution which may properly be moved and is intended to be moved at that meeting; (b) circulate to members entitled to 'have notice .of any general meeting sent to them, any statement of .not more than one thousand words with respect to the matter referred to in any proposed resolution, or any business to be dealt with at that meeting. (2) The number of members necessary for a requisition under sub-section (1) shall be - (a) such number of members as represent not less than one-twentieth of the total voting power of all the members having at the date of the requisition a right to vote on the resolution or business to which the requisition relates; or (b). not less than one hundred members having the right aforesaid and holding shares in the company on which there has been paid up an aggregate sum of not less than one lakh of rupees in all. (3) Notice of any such resolution shall be given, and any such statement shall be circulated, to members of the company entitled to have notice of the meeting sent to them, by serving a copy of the resolution or statement on each member in any manner permitted for service of notice of the meeting; and notice of any such resolution shall be given to any other member of the company by giving notice of the general effect of the resolution in any manner permitted for giving him notice of meetings of the company; Provided that the copy shall be served, or notice of the effect of the resolution shall be given, as the case may be, in the same manner and, so far as practicable, at the same time as notice of the meeting, and where it is not practicable for it to be served or given at that time, it shall be served or given as soon as. practicable thereafter. (4) A company shall not be bound under this section to give notice of any resolution or to circulate any statement unless- (a) a copy of the requisition signed by the requisitionists (or two or more copies which between them contain the signatures of all the requisitionists) is deposited at the registered office of the company- (i) in the 'case of a requisition requiring notice of a resolution, not less than six weeks before the meeting; (ii) in the case of any other requisition, not less than two weeks before the meeting; and (b) there is deposited or tendered with the requisition a sum reasonably sufficient to meet the company's expenses in giving effect thereto. Provided that if, after a copy of a requisition requiring notice of a resolution has been deposited at the registered office of the company, an annual general meeting is called for a date six weeks or less after the copy has been deposited, the copy, although' not deposited within the time required by this sub-section,shall be deemed to have been properly deposited for the purposes thereof. (5) The company shall also not be bound .under this section to circulate any statement if, on the application either of the company or of any other person who claims to be aggrieved, the Company Law Board is satisfied that the rights conferred by this section arc being abused to secure needless publicity for defamatory matter; and the Company Law Board may order the company's costs on the application under this section to be paid in whole or in part by the requisitionists, notwithstanding that they are not parties to the application. (6) A banking company shall not be bound to circulate any statement under this section, if, in the opinion of its Board of directors, the circulation will injure the interests of the company. (7) Notwithstanding anything in the company's articles, the business which may be dealt with at an annual general meeting shall include any resolution of which notice is given in accordance with this section and for the purpose of this sub-section, notice shall be deemed to have been so given, notwithstanding the accidental omission, in giving it, of one or more members. (8) If default is made in complying with. the provisions of this Section, every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees.'
(4) Respondent No.2 has filed its counter affidavit wherein the following pleas are taken:
'(A)the petition is mala fide and an abuse of process of law, as it is intended to achieve needless publicity of petitioners which is neither in accordance with law nor the petition is maintainable. (b) the Act is a Code in itself. If at all the petitioner has any genuine grievance he could avail of. remedy as admissible under the Companies Act or Civil law. The extra-ordinary writ jurisdiction is not open when an alternative statutory remedy is available under the Act. (c) petitioner No.1 has raised in previous Annual General Meeting such questions which have been thoroughly examined at an appropriate level of Executive Director (Vigilance) and Director (Personnel) of the respondent company and appropriate action has been taken. It is not open for this Court to entertain various disputed questions of fact in its writ jurisdiction. (d) the petitioner Naresh Kumar Jain has not come to Court with clean hands. It has been pointed out by M/s Karvy Consultants Ltd., Company's Shares Registrar and Transfer Agents that as many as 59 signatures on the authorisation letters suffer from some defects or the other as verified on comparison with the specimen signatures of the members in whose names authorisation is issued. The copy of the communication dated August 23, 1996 from the said company as well as list of 178 members who had issued the so-called authorisation letters in favor of Naresh Kumar Jain have since withdrawn on the ground that they were not apprised of the type of resolutions Shri Jain was proposing. The said members after having seen newspapers dated 8th and 9th September, 1996 realised the mistake of their blanket authorisation and, accordingly, withdrew it before filing of this petition. The original letters of such petitioners are enclosed with the reply affidavit. (e) The requisition for resolution dated August 12, 1996 was considered in the meeting of the Board of Directors of the Company held on August 26, 1996 when thorough examination was made. Copies of the minutes have also been filed with the reply affidavit. (f) the circulation of proposed defamatory resolutions is against the interest of the company which will be judice its fair image in national and international fields. The respondent company is a Government company in which the President of India holds 67.72% shares. The total number of share holders are 20,579 which include the President of India, Unit Trust of India, L.I.C., G.I.C. etc. as share holders. In order to encourage the workers participation the Government offered its 5% of the equity capital of the company to the employees of the company which was divested by the Government to willing employees at concessional rate of Rs.62.00 per share. The company made a profit before tax during the year 1995-96 amounting to Rs.582.33 crores. (g) the prayers as sought by the petitioners cannot be allowed as holding of Annual General Meeting of the Company is a statutory requirement and no meeting can be held without statutory notice which has since been issued on September 2, 1996 containing the agenda for the Annual General Meeting scheduled to be held on September 30, 1996. The requisition for Petitioners' Resolution is not covered by the provisions of Section 188(4) of the Act. The petitioners are seeking publicity through press media at the cost of the company etc.'
(5) I have heard learned counsel for the parties in detail. The petitioners have contended that they have moved the requisition in writing and members who are specified in Annexure A have given their express and written consent. This satisfies the requirement of the provisions of Section 188 of the Act. thereforee, respondent no.2 was duty bound to include the same in the agenda of the Annual General Meeting and circulated to members entitled to have notice of any such meeting. The ingredients as specified in sub- section (2) of Section 188 have duly been complied with as more than 100 members holding shares in the company have appended their signatures.
(6) In the present case, the petitioner Naresh Kumar Jain has filed his affidavit which reads as follows:
'I,Naresh .Kumar Jain s/o Shri Harbans Lal Jain aged about 45 years, R/o Q.No. 11, Type - 4, B - Sector, Piplani, Bhopal (MP) do hereby solemnly affirm and state on oath as under:- 1. That I am a share holder of Bharat Heavy Electricals Limited having its registered office at Bhel House, Siri Fort, New Delhi-110049. My share holding folio nos. are 125 and 12254. 2. That I have been authorised to represent and move resolutions and do all other acts as mentioned in their authorisation letters dated 25.7.96 by a number of share holders of Bharat Heavy Electricals Limited as per the enclosed list of share holders giving their names, folio nos. and signatures. DEPONENT'
Thereafter, he appended the list of members in the communication dated July 25, 1996 to the Company Secretary of respondent' No.2 stating that he has been authorised to act in the matter. The operative portion of this communication reads as follows:
'TO The Company Secretary, Bharat Heavy Electricals Limited, Bhel House, Siri Fort, New DELHI-110049. Dear Sir, We the following share holders of Bharat Heavy Electricals Limited, New Delhi hereby authorise Shri Naresh Kumar Jain S/o Shri Harbans Lal Jain R/o Q.No.11, Type-4, B-Sector, Piplani, Bhopal and a share holder of the company (Folio No. 125) to represent us or move resolutions at the ensuing Annual General Body Meeting (32nd AGM) of the company or any of its adjournments. For safeguarding and promoting the interests of minority share holders or the company, before or after the ensuing Agm, he is further authorised to represent us in respect of any matter or even give notices, file petitions, suits, cases, appeals etc. before the Registrar of Companies, Company Law Board or any Competent Civil Court, High Court or even the Supreme Court etc. He is also authorised to do any matter incidental or related to the above acts.'
(7) The perusal of the list as appended with the communication will indicate that at some places the folio number and signatures of some of the members have been left blank. Original letters of some of these members who have refused to be associated with the petitioner Naresh Kumar Jain have been filed by respondent No.2 to indicate that such members have in fact withdrawn their consent.
(8) The other admitted fact is that all the members have not appended their signatures neither in the communication dated 12th August, 1996 which Naresh Kumar Jain addressed to respondent no.2 for submission of resolutions for the Annual General Meeting of the share holders of the company nor have they appended their signatures to the resolutions. These two documents are only signed by petitioner No.l. The following ingredients for circulation of members' resolutions as incorporated in Section 188 maybe stated:
'(1)that the requisition Is given in writing duly signed by the following members: (a) members representing at least one-twentieth of the total voting power or; (b) at least one hundred members holding shares of the paid-up value of Rs. one lakh; (2) copy of the requisition signed by the requisitionists is deposited at the registered office of the company. (a) in case of a requisition requiring notice of a resolution at least six weeks before the meeting; (b) in any other case at least two weeks before the meeting; (3) expenses for circulation of the requisition of the company are tendered by the requisitionists; (4) the company shall not be bound to give notice of any resolution or to circulate any statement unless the requisitionists comply with the conditions as mentioned above; (5) the company shall also not be bound under this section to circulate any statement if, on the application either of the company or of any other person who claims to be aggrieved, the Company Law Board is satisfied that the rights conferred by this section are being abused to secure needless publicity for defamatory matter; and the Company Law Board may order the company's costs on an application under this section to be paid in whole or in part by the requisitionists, notwithstanding that they are not parties to the application.'
(9) The question now arises as to whether the petitioners have complied with the provisions of law as mentioned above. It is an admitted case that except petitioner No.l, none of the other petitioners have signed either the requisition letter dated 12th August, 1996 or have appended their signatures to the resolutions. The company is no doubt bound to give notice of any resolution or to circulate any statement provided there is full compliance of the provisions as contained in sub-section (4) of Section 188 of the Act. These are mandatory provisions and there is no escape from their application.
(10) The learned counsel for respondent No.2 has further argued that the provisions as contained in Sections 397, 398 and 399 are in pari materia to the provisions of Section 188 of the Act. thereforee, the consent in writing of all the in rembers will be necessary for grant of relief under the provisions of Section 188 of the Act. There cannot be a blanket consent like a certain member or members consenting to some other member filing a petition under Section 397 or Section 398 or under both. This settled position of law cannot be applied differently while construing similar provisions of Section 188. The proposition is upheld in the judgments as reported in M.C. Duraiswami v. Sakthi Sugars Ltd. (1980) 50 C C 154; Kilpest Private Ltd v. Shekhar Mehra (1987) 62 C C 717 and Onini India Limited and others v. Balbir Singh (1989) C C 903.
(11) The following paragraph from the judgment in .M.C. Duraiswami (supra) is of relevance:
'CONSEQUENTLY,the appellant in the present case was purporting to file the application on behalf of and for the benefit of all the 147 persons who figured in the annexure. From this it necessarily follows that the said 147 persons must know what exactly the appellant was doing and that he was acting for their benefit. They can know this only if they know what was the actual ground to be put forward for invoking the jurisdiction of the court under Section 397 or Section 398 or both and what was the relief proposed to be claimed in the petition. thereforee, the consent contemplated under Section 399(3) is an intelligent consent, in the sense, a consent given for the purpose of making a particular allegation in the petition and for the purpose of claiming a particular relief therein and, thereforee, a blanket consent as in the present case cannot be a consent as contemplated by Section 399(3). Thus, a combined reading of Section 399(1) and (3) will also reinforce the conclusions we have already reached.'
(12) Similar views were expressed in the other judgments and it will not be necessary to deal with these cases in detail.
(13) The present petition raises various questions of fact i.e. as to whether the petitioners have appended their signatures for giving consent to petitioner No.1 to pursue the matter and whether some of the members subsequently have withdrawn the consent as indicated in the letters filed as Annexures to the counter affidavit of respondent No.2. It is, however, not in dispute that they have not signed as requisitionists and have allegedly given the necessary power in favor of petitioner No.1 to represent them at the Annual General Meeting of the company. The expenses as envisaged have also not been deposited with the company. There does not seem to be compliance of statutory provisions as contained in sub-section (4) of Section 188 of the Act.
(14) The questions of fact as raised cannot be adjudicated in exercise of extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India. This will require appreciation of evidence and an appropriate alternative remedy can be the only answer. The writ petition is accordingly dismissed. There will be no order as to costs.