Sahaj Evillage Ltd and Anr Vs. Csc Egovernance Services India Ltd - Court Judgment

SooperKanoon Citationsooperkanoon.com/61602
CourtKolkata High Court
Decided OnJul-27-2015
JudgeSoumen Sen
AppellantSahaj Evillage Ltd and Anr
RespondentCsc Egovernance Services India Ltd
Excerpt:
order sheet ga no.2254 of 2015 with cs no.177 of 2015 in the high court at calcutta ordinary original civil jurisdiction original side sahaj e-village ltd & anr versus csc e-governance services india ltd before: the hon’ble justice soumen sen date : 27th july, 2015. appearance: mr.sudipta sarkar, sr.adv.mr.soumya majumdar, adv.ms.n.chatterjee, adv.ms.a.malhotra, adv.…for the petitioners mr.tanuj khurana, adv.mr.puspal chakraborty, adv.…for the respondent. the court : the plaintiff is engaged in the business of providing service in respect of national e-governance programme. for the purpose of implementation of the national e-governance plan, the department of electronics and information technology, ministry common of communication, service centers government scheme. the of said india formulated scheme provided the for setting up a special purpose vehicle (spv) for the purpose of channelling government support, national level content aggregation, monitoring of operations etc.beyond the period of existence of the national legal service respondent is a special purpose agency vehicle (nlsa).incorporated the for purpose of monitoring csc scheme on behalf of the government. the it is stated that the model that was adopted was in the nature of public private partnership and, therefore, the spv was to have equity partners who would invest in the spv such as department of electronics and information technology, ministry of communication, government of india, nlsa and strategic investors.the plaintiff investors.no.1 claims to be one of the strategic there appears to be some disputes with regard to the dilution of share-holding of the plaintiff no.1 in defendant which is a subject matter of a writ petition high court. pending before the delhi there are some existing orders in favour of the plaintiff no.1. this suit has been filed challenging a notice of removal of directors of the plaintiff no.2 from the board of directors of the defendant. the plaintiff alleged that the said removal is illegal inasmuch as it is in breach of share holders agreement. it is submitted that the plaintiff no.2 was nominated as a director of the plaintiff no.1 and the said plaintiff no.2 is sought to be removed from the board in contravention of the provisions of the articles of association as well as the companies act. mr.sudipta sarkar, learned senior counsel appearing on behalf of the plaintiffs submits that a perusal of the impugned resolution would show that the said director is sought to be removed in exercise of power under section 169 of the new company act which is corresponding to section 284 of the 1956 act. it is submitted that the articles provide the manner in which the director can be removed. the learned senior counsel refers to article 155 and section 284 of the old 1956 act and submits that the board was not authorised to remove the plaintiff no.2 other than the manner what was contemplated under the articles and section 284 of the companies act and since the impugned resolution is de hors the said provisions the said resolution is illegal and unenforceable. it is submitted that none of the circumstances which are contemplated in the articles of association including article 155 or section 284 of the 1956 act has arisen in the instant case and in view thereof, action of board of directors are expressly illegal and contrary to law. it is submitted that the ground for removal stated in the said impugned resolution is that the plaintiff no.2 utilised the inside knowledge of the defendant and using such information had filed a proceeding before the delhi high court which according to the board of directors defendant is in violation of the code of conduct. of the accordingly, a resolution was passed by the board to remove the representation of the plaintiff no.2 from the board of defendant. this cannot form a ground for removal inasmuch as the board has no authority to remove the direction on the aforesaid ground. the procedure for passing an ordinary resolution as contemplated under section 114 of the new act has not been followed. mr.tanuj khurana, learned counsel appearing on behalf of the defendant submits that this court lacks territorial jurisdiction in entertaining the suit. it is submitted that no part of cause of action has arisen within the jurisdiction of the court. it involves which is court. law. the control admittedly and management situated outside the of the defendant jurisdiction of this it is argued that this suit has been filed in abuse of it is argued that while the plaintiffs have taken a plea before the delhi high court that the defendant is a state within the meaning of article 12 of the constitution of india but in the instant case the suit has been filed without serving notice under section 80 referred of to in the code the of plaint civil for procedure. the purpose the of paragraphs invoking the jurisdiction of this court are mere service of notice which would not constitute cause of action. on merits, it is submitted that the plaintiff no.2 is not a nominee director of the plaintiff no.1 inasmuch as there is an amendment to the memorandum of articles which are not being produced before this court. counsel has referred to article 139 and the learned submits that he was appointed as an additional director. such additional director is to hold the office only until next following agm of the company. the plaintiffs are trying to represent that the plaintiff no.2 is a nominee director and not an additional director. the learned counsel has referred to minutes of the meeting to show that the plaintiff no.2 director. the is an additional learned counsel, director however, and not submitted a nominee that under section 169 of the companies act the board has the power to remove the director and at this stage no interference is called for since the process under section 169 has not yet been completed. the aggrieved party would have the right to give an answer to the resolution and it was only on consideration of the said representation that a final decision would be communicated. it is thus contended that the suit is premature. prima facie, it appears that the procedure under section 169 has not been followed. a director can be removed only by exercise of power under article 155 or section 284 of the old act. even it is assumed that the company would have the power to remove a director but the order of removal can only be given effect to provided the board has the power to pass such resolution and procedure under section 169 is followed and has attained finality. even assuming at this stage that a director may be removed by exercising the power under section 169 the act the fact remains that the said process is yet to directorship is a valuable right. be completed. a right to it is not in dispute that each of the strategic investors has a right to have a representative on the board. this is a valuable right which cannot be easily interfered with. consider the scrutiny. recognises, the very exercise of power by the director to said agenda subsection (1) acknowledges and of and pass any section confers a resolution 169 of the very valuable is under 2013 act right in favour of the director concerned, i.e.the right of being heard before a resolution is passed removing him from the office. the resolution does not say that any opportunity of hearing was given to the director before removal. there is thus a violation of the principles of natural justice and a statutory violation as well. under such circumstances, the plaintiff no.2 is allowed to function as a director of the defendant no.1 and would be allowed to represent in the board meetings subject to decision that may be taken following companies act. the procedure under however, any section decision taken 169 by the of the board in purported exercise of power under section 169 of the new act would not be given effect to without leave of this court. accordingly, there shall be an order restraining the defendant from giving any effect or further effect to resolution no.11 with regard to the removal of the plaintiff no.2 from the board of the defendant. although no application has been filed for revocation of leave under clause 12 of the letters patent but on the basis of the plaint i can say that a part of cause of action arises within jurisdiction of this court. miniscule it is a settled law that even a fact can constitute a cause of action and can give jurisdiction to a court. whether service of the notice would constitute a cause of action or not is a question of fact. said notice has civil and advers.consequence and if the affects a valuable right of a party, then the service of the notice at the place of business of the plaintiff can give jurisdiction to the court where the plaintiff carries on business. all prima facie views. however, these are it would be open for the defendant to take all the points in the affidavit to be filed in this proceeding. affidavit-in-opposition shall be filed within two weeks from date. affidavit-in-reply thereto, if any, shall be filed within two weeks thereafter. the matter shall appear under the heading ‘motion adjourned’ six weeks hence. (soumen sen, j.) b.pal
Judgment:

ORDER

SHEET GA No.2254 of 2015 With CS No.177 of 2015 IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction ORIGINAL SIDE SAHAJ E-VILLAGE LTD & ANR Versus CSC E-GOVERNANCE SERVICES INDIA LTD BEFORE: The Hon’ble JUSTICE SOUMEN SEN Date : 27th July, 2015.

Appearance: Mr.Sudipta Sarkar, Sr.Adv.Mr.Soumya Majumdar, Adv.Ms.N.Chatterjee, Adv.Ms.A.Malhotra, Adv.…for the petitioners Mr.Tanuj Khurana, Adv.Mr.Puspal Chakraborty, Adv.…for the respondent.

The Court : The plaintiff is engaged in the business of providing service in respect of National E-Governance Programme.

For the purpose of implementation of the National E-Governance Plan, the Department of Electronics and Information Technology, Ministry Common of Communication, Service Centers Government Scheme.

The of said India formulated scheme provided the for setting up a Special Purpose Vehicle (SPV) for the purpose of channelling government support, national level content aggregation, Monitoring of Operations etc.beyond the period of existence of the National Legal Service respondent is a special purpose Agency vehicle (NLSA).incorporated The for purpose of monitoring CSC Scheme on behalf of the Government.

the It is stated that the model that was adopted was in the nature of Public Private Partnership and, therefore, the SPV was to have equity partners who would invest in the SPV such as Department of Electronics and Information Technology, Ministry of Communication, Government of India, NLSA and strategic investORS.The plaintiff investORS.no.1 claims to be one of the strategic There appears to be some disputes with regard to the dilution of share-holding of the plaintiff no.1 in defendant which is a subject matter of a writ petition High Court.

pending before the Delhi There are some existing orders in favour of the plaintiff no.1.

This suit has been filed challenging a notice of removal of directors of the plaintiff no.2 from the Board of Directors of the defendant.

The plaintiff alleged that the said removal is illegal inasmuch as it is in breach of share holders agreement.

It is submitted that the plaintiff no.2 was nominated as a director of the plaintiff no.1 and the said plaintiff no.2 is sought to be removed from the Board in contravention of the provisions of the Articles of Association as well as the Companies Act.

Mr.Sudipta Sarkar, learned senior counsel appearing on behalf of the plaintiffs submits that a perusal of the impugned resolution would show that the said director is sought to be removed in exercise of power under Section 169 of the New Company Act which is corresponding to Section 284 of the 1956 Act.

It is submitted that the Articles provide the manner in which the director can be removed.

The learned senior counsel refers to Article 155 and Section 284 of the Old 1956 Act and submits that the board was not authorised to remove the plaintiff no.2 other than the manner what was contemplated under the Articles and Section 284 of the Companies Act and since the impugned resolution is de hors the said provisions the said resolution is illegal and unenforceable.

It is submitted that none of the circumstances which are contemplated in the Articles of Association including Article 155 or Section 284 of the 1956 Act has arisen in the instant case and in view thereof, action of Board of Directors are expressly illegal and contrary to law.

It is submitted that the ground for removal stated in the said impugned resolution is that the plaintiff no.2 utilised the inside knowledge of the defendant and using such information had filed a proceeding before the Delhi High Court which according to the Board of Directors defendant is in violation of the code of conduct.

of the Accordingly, a resolution was passed by the board to remove the representation of the plaintiff no.2 from the board of defendant.

This cannot form a ground for removal inasmuch as the Board has no authority to remove the direction on the aforesaid ground.

The procedure for passing an ordinary resolution as contemplated under Section 114 of the New Act has not been followed.

Mr.Tanuj Khurana, learned counsel appearing on behalf of the defendant submits that this Court lacks territorial jurisdiction in entertaining the suit.

It is submitted that no part of cause of action has arisen within the jurisdiction of the Court.

It involves which is Court.

law.

the control admittedly and management situated outside the of the defendant jurisdiction of this It is argued that this suit has been filed in abuse of It is argued that while the plaintiffs have taken a plea before the Delhi High Court that the defendant is a state within the meaning of Article 12 of the Constitution of India but in the instant case the suit has been filed without serving notice under Section 80 referred of to in the Code the of plaint Civil for Procedure.

the purpose The of paragraphs invoking the jurisdiction of this Court are mere service of notice which would not constitute cause of action.

On merits, it is submitted that the plaintiff no.2 is not a nominee director of the plaintiff no.1 inasmuch as there is an amendment to the Memorandum of Articles which are not being produced before this Court.

counsel has referred to Article 139 and The learned submits that he was appointed as an Additional Director.

Such Additional Director is to hold the office only until next following AGM of the Company.

The plaintiffs are trying to represent that the plaintiff no.2 is a nominee director and not an Additional Director.

The learned counsel has referred to minutes of the meeting to show that the plaintiff no.2 director.

The is an Additional learned counsel, Director however, and not submitted a nominee that under Section 169 of the Companies Act the board has the power to remove the Director and at this stage no interference is called for since the process under Section 169 has not yet been completed.

The aggrieved party would have the right to give an answer to the resolution and it was only on consideration of the said representation that a final decision would be communicated.

It is thus contended that the suit is premature.

Prima facie, it appears that the procedure under Section 169 has not been followed.

A director can be removed only by exercise of power under Article 155 or Section 284 of the Old Act.

Even it is assumed that the company would have the power to remove a director but the order of removal can only be given effect to provided the Board has the power to pass such resolution and procedure under Section 169 is followed and has attained finality.

Even assuming at this stage that a director may be removed by exercising the power under Section 169 the Act the fact remains that the said process is yet to directorship is a valuable right.

be completed.

A right to It is not in dispute that each of the strategic investors has a right to have a representative on the board.

This is a valuable right which cannot be easily interfered with.

consider the scrutiny.

recognises, The very exercise of power by the director to said agenda Subsection (1) acknowledges and of and pass any Section confers a resolution 169 of the very valuable is under 2013 Act right in favour of the director concerned, i.e.the right of being heard before a resolution is passed removing him from the office.

The resolution does not say that any opportunity of hearing was given to the director before removal.

There is thus a violation of the principles of natural justice and a statutory violation as well.

Under such circumstances, the plaintiff no.2 is allowed to function as a director of the defendant no.1 and would be allowed to represent in the board meetings subject to decision that may be taken following Companies Act.

the procedure under However, any Section decision taken 169 by the of the board in purported exercise of power under Section 169 of the New Act would not be given effect to without leave of this Court.

Accordingly, there shall be an order restraining the defendant from giving any effect or further effect to resolution no.11 with regard to the removal of the plaintiff no.2 from the board of the defendant.

Although no application has been filed for revocation of leave under Clause 12 of the Letters Patent but on the basis of the plaint I can say that a part of cause of action arises within jurisdiction of this Court.

miniscule It is a settled law that even a fact can constitute a cause of action and can give jurisdiction to a Court.

Whether service of the notice would constitute a cause of action or not is a question of fact.

said notice has civil and adveRs.consequence and If the affects a valuable right of a party, then the service of the notice at the place of business of the plaintiff can give jurisdiction to the Court where the plaintiff carries on business.

all prima facie views.

However, these are It would be open for the defendant to take all the points in the affidavit to be filed in this proceeding.

Affidavit-in-opposition shall be filed within two weeks from date.

Affidavit-in-reply thereto, if any, shall be filed within two weeks thereafter.

The matter shall appear under the heading ‘Motion Adjourned’ six weeks hence.

(SOUMEN SEN, J.) B.Pal