# R. RANGACHARI v. S. SUPPIAH & ORS

- **Citation:** [1976] 1 S.C.R. 798
- **Court:** Supreme Court of India
- **Decided:** 1975-09-15
- **Case number:** Civil Appeal No. 1136 of 1975
- **Bench:** A. Alagir!5Wam», P. K. Goswami, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/r-rangachari-v-s-suppiah-ors-6676
- **Pages:** 5

## Headnote

Indian Cdnipanies Act, 1956, s. 186-Scope of
A
B
Under s. 186(1)(a) of the Companies Act, if_ for any reawn it is impracti-
,,.
cable to call a meeting of the company, other than an annual general meeting,
or to hold, or conduct it in tho.. manner prescribed by the Act or the articles
of the company, the Court may order the meeting to be called held
and
conducted in such manner as the Court thinks fit; and s. 186(2) Provides that
such a meeting should be deemed: to be a meeting of the oompany duly ca1Ied,
C
held and conducted.
The Board of Directors of a company called au extraordinary general
meeting of the company for the purpose of considering
petitions
filed
by
shareholders regarding the managing
l1!rector~'-
Apprehending trouble in the
holding and conducting of the meeting two share·holders filed a petition in
the High Court under s. 186 of the Companies Act praying for the appoint·
t
ment of an advocate Commissioner as Chairman of the meeting, which was
D
called. The High Court, in Letters Patent appeal, granted the prayer.
In appeal to this Court it was contended, inter alia, that the power under s.
186 of the Act could not be exercised until it was found that it was impracti·
cable to call the meeting and to hold and conduct it in the manner prescribed
by the Act or articles of association, and that the High Court had not jurisdic ....
tion merely to appoint a Chairman of the meeting already called.
Allowing the appeal to this Court,
HELD : Under s. 186 the Court may order a meeting of the Company to
be called, held and conducted, in s.uch manne_r, as the
Court thinks
fit
in any dne or 1nore of the contingencies, namely, if for any reason -it is impracti:-.
cable (i) to call a meeting of' the company other than an annual general meet·
ing; (ii) to hold tbe meeting in the manner prescribed by the Act or the Articles
of Association; and (iii) to conduct the meeting of the company in the same
manner.
The use of the wocd 'or' in the first part of sub-s. (I) (a), may,
therefore, be disjunctive or conjunetive as interpreted above but the use of
the word and between the words •held and conducted' in the same clause shows
that the order under cl. (a) has got to be made for all the three purposes of
calling, holding and conducting and not merely for holding or conducting !l'1e
meeting.
Therefore, the Court has no power to make any order regarding
the holding and conducting of any meeting which/ bas already been called, without ordering a nieeting of the company to be call~ in place of the meeting
already called. The language of s.ub.s. (2) also fortifies the above interpretation.
Since there was no prayer for an order of calling a meeting the application
to the Court under s. 186 was not maintainable.
[802A-D]
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C!vrL APPELLATE JURISDICTION : Civil Appeal No. 1136 of 1975.
Appeal by Special Leave from the Judgment and Order dated the
11th day of March, 1975 of the Madras High Court in C.S.A. No. 64
H
of 1974.
S. v. Gupte, Mrs. S. Bhandare for the appeUant.
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R. RANGACl{ARI r. s. SUPPJAH (Untwalia, !.)
799
S. Govinda Swaminathan, T. Raghavan, R. Chandrasekhar and
.'(. Jayaram for respondent Nos. 1 to 2.
M. C. Bhandare, A. T. M. Sampath and M. M. L. Srivasiara for
respondent No. 3.

## Text

798
R. RANGACHARI
v.
S. SUPPIAH & ORS.
September 15, 1975
[A. ALAGIR!5WAM», P. K. GOSWAMI AND N. L. UNTWALIA, JJ.]
Indian Cdnipanies Act, 1956, s. 186-Scope of
A
B
Under s. 186(1)(a) of the Companies Act, if_ for any reawn it is impracti-
,,.
cable to call a meeting of the company, other than an annual general meeting,
or to hold, or conduct it in tho.. manner prescribed by the Act or the articles
of the company, the Court may order the meeting to be called held
and
conducted in such manner as the Court thinks fit; and s. 186(2) Provides that
such a meeting should be deemed: to be a meeting of the oompany duly ca1Ied,
C
held and conducted.
The Board of Directors of a company called au extraordinary general
meeting of the company for the purpose of considering
petitions
filed
by
shareholders regarding the managing
l1!rector~'-
Apprehending trouble in the
holding and conducting of the meeting two share·holders filed a petition in
the High Court under s. 186 of the Companies Act praying for the appoint·
t
ment of an advocate Commissioner as Chairman of the meeting, which was
D
called. The High Court, in Letters Patent appeal, granted the prayer.
In appeal to this Court it was contended, inter alia, that the power under s.
186 of the Act could not be exercised until it was found that it was impracti·
cable to call the meeting and to hold and conduct it in the manner prescribed
by the Act or articles of association, and that the High Court had not jurisdic ....
tion merely to appoint a Chairman of the meeting already called.
Allowing the appeal to this Court,
HELD : Under s. 186 the Court may order a meeting of the Company to
be called, held and conducted, in s.uch manne_r, as the
Court thinks
fit
in any dne or 1nore of the contingencies, namely, if for any reason -it is impracti:-.
cable (i) to call a meeting of' the company other than an annual general meet·
ing; (ii) to hold tbe meeting in the manner prescribed by the Act or the Articles
of Association; and (iii) to conduct the meeting of the company in the same
manner.
The use of the wocd 'or' in the first part of sub-s. (I) (a), may,
therefore, be disjunctive or conjunetive as interpreted above but the use of
the word and between the words •held and conducted' in the same clause shows
that the order under cl. (a) has got to be made for all the three purposes of
calling, holding and conducting and not merely for holding or conducting !l'1e
meeting.
Therefore, the Court has no power to make any order regarding
the holding and conducting of any meeting which/ bas already been called, without ordering a nieeting of the company to be call~ in place of the meeting
already called. The language of s.ub.s. (2) also fortifies the above interpretation.
Since there was no prayer for an order of calling a meeting the application
to the Court under s. 186 was not maintainable.
[802A-D]
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F
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C!vrL APPELLATE JURISDICTION : Civil Appeal No. 1136 of 1975.
Appeal by Special Leave from the Judgment and Order dated the
11th day of March, 1975 of the Madras High Court in C.S.A. No. 64
H
of 1974.
S. v. Gupte, Mrs. S. Bhandare for the appeUant.
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R. RANGACl{ARI r. s. SUPPJAH (Untwalia, !.)
799
S. Govinda Swaminathan, T. Raghavan, R. Chandrasekhar and
.'(. Jayaram for respondent Nos. 1 to 2.
M. C. Bhandare, A. T. M. Sampath and M. M. L. Srivasiara for
respondent No. 3.
The Judgment of the Court was delivered by
UNTWALIA, J.
The question which falls for our determinatlon in
this appeal by special leave is as to what is the meaning and scope of
s .. 186 of the Companies Act, 1956 hereinafter called the Act. For the
determination of the said question it will suffice to ,;tatc only a few
facts from the judgments of the Madras High Court.
There were two
. Managing Directors of Century Flour Mills Lrd.-respondent no. 3.
Their names are S/Shri P. Govindaswamy and S. P. Sithambaram.
Both of them had been duly appointed as such in the year 1972. They
subsequently fell out.
In August, 197 4 certain shareho~ders of the
compan;y including respondents 1 and 2 lodged a requisition under
section 169 of the Act for the calling of an extraordinany general meet-
/ing of the company for removal of Govindaswamy. Certain other shareholders lodged a similar requisition for remov~I of $ilhambaram from
the post of Managing Director. Both the requisitions were considered
by the Board of Directors in their meeting held on 19-8-1974. As per
the requisitions, they called an extraordinary general meeting of the
company to be held on 14-9-1974. The meeting was directed to be
held at the residence of one of the shareholders of the company instead
of its registered office. The shareholders were divided into two factions belonging to the two groups of the Managing Directors. Apprehending very many difficnlties and troubles ip the holding and the conduct of the meeting on 14-9-1974, respondents 1 and 2 filed an application under section 186 of the Act, Company Petition No. 85/1974,
in the Madras High Court. They prayed to the ·Court to appoint an
Advocate-Commissioner as Chairman of the meeting to be held
on
14·9-1974 so that the proceedings may be conducted
in a regular
manner. The only respondent impleaded in the said petition was the
company which filed a counter-affidavit to resist the prayer of respon- ·
dents 1 and 2.
A learned single Judge of the High Court took the
view that power under section 186 of the Act could be exercised even
where a meeting had already been called, but it was impracticable to
ho!d or conduct the meeting. In other words, the learned Judga was
of the opinion that the Court even without ordering a· meeting of the
company to be called could apooint a person to be the Chairman or
the meeting.
But on appreciation .of the facts of the case in the light
of certain decisions of the High Courts, he came to the conclusion that
it was not impracticable to hold or conduct the meeting and hence dismissed the application filed by respondents 1 and 2.
0. S. Appeal No. 64/1974 was filed in the High Court under clause
15 of the Letters Patent.against the order dated 11-9-1974 of the learned single Judge.
By an order made on September 12, 1974 a Bench
of the High Court stayed the convening of the meeting called to be
held on 14-9-1974. It appears that in spite of the service of the order
3-L127SCI/75
800
SUPREME COURT REPORTS
[1976] 1 s.c.R.
dated 12-9-1974 on September 13, the meeting was held on 14-9·1974.
CMP No. 10935/1974 was taken ouf in the form of a Judges' summons
under Rule 9 of the Company Code Rule, 1959 to declare the meeting
held on 14-9-1974 as void and the resolutions passed therein as illegal
and inoperative.
The said appeal and the CMP alongwith other
CMPs which are not necessary to be referred to in this judgment were
heard by a Bench of the IDgh Court presi~ over by the learned Chief
Justice.
The Bench allowed CMP 10935/1974, put back the parties
in the same position as they stood immediately prior to the service of
the order dated 12-9-1974 and declared that the meeting held on Sep·
tember 14, 1974 and the resolutions passed thereunder would have no
e!Iect whatsoever.
By a separate judgment, Appeal No. 64/1974 was
also allowed by the Division Bench.
It agreed with the single Judge
as regards the meanin!J and scope o( section 186 of the Act but differed
from him on the merits of the case.
They appointed an Advocate of
the Court as the Advocate-Chairman to hold and conduct the meeting
and directed that the meeting would take place at the premises of the
registered office of the Company.
,
The sole appellant in this appeal is a shareholder of the company.
Feeling aggrieved by the orders of the Division Bench of the High
Court in CMP No. 10935/74 and in OS Appeal No. 64/1974 he filed
special leave applications in this Court seeking leave to file appeals in
both the matters.
By order dated 29-8-1975 a Bench of this Court
dismissed as withdrawn SLP No. 1156/1975 arising from the judgment
and order dated 11-3-1975 of the High Court in CMP No. 10935/
1974.
Special leave was granted from the judgment and order dated
17·3-1975 of the High Court passed in OS Appeal No. 64/1974.
Mi. S. V. Gupte, learned counsel for the appellant urged the following three points in support of the appeal:
( 1) That power under section 186 of the Act could not be
exercised until it was found that it was impracticable
to call a meeting of the Company other than an annual
general meeting and to hold and conduct the meeting
in the manner prescribed by the Act or the Articles
of the company.
The Court had no jurisdiction mere-
(2)
. ly to· appoint a Chairman of. the meeting without an·
order for the calling of the meeting.
That the High Court was wrong in holding that it was
impracticable to hold or conduct the meeting of the
company which had already been called.
(3) That during the pendency of the appeal in the High
Court, Company Law Amendment Act of 1974 came
into force on 1-2-1975. The oowers and jurisdiction
of court under section 186 stood transferred to Company Law Board by the said amendment. The court,
therefore, had no power to make an order under section 186 on 17-3-1975.
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R. RANGACH;ARI v. s. SUPP!AH (Untwalia, J,)
801
Since in our opinion the first point urged on behalf of the appellant
is well founded and has to be accepted as correct, neither of the other
two p@ints need any determination or answer and we express no opinion
in respect of them.
·
Section 186 of the Act as it stood at the relevant time reads as
follows:
"Power of Court to order meeting to be called.-( 1) If
for any reason it is impracticable to call a meeting of a company, other than an annual general meeting in any manner
in which meetings of the companlY may be called, or to hold
or conduct the meeting of the company in the manner prescribed by this Act or the articles, the Court may, either of
its own motion or on the application of any director of the
company, or of any member of the company who would be
entitled to vote at the meeting,-
( a) order a meeting of the company to be called, held
and conducted in such manner as the Court ·thinks fit;
and
(b) give such ancillary or .consequential directions as the
Court thinks expedient, including directions modifying or supplementing in relation to the calling, holding and conducting of the meeting the operation of
the provisions of this Act and of the company's articles.
Explanation-The directions
that may be given under
this sub-section. may include a direction that one member of
the company present in person or by proxy shall be d_eemed
to constitute a meeting.
(2) Alli)' 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 corresponds with slight variation to section 79(3) of the Companies
Act, 1913 and section 135 of the English Companies Act, 1948. The
plain meaning of section 186 is that the court may order a meeting of
the company to be called, held and conducted in such manner as the
court thinks fit in any or more of the following contingencies.
(i) If for any reason it is impracticable to call a meeting
of the company other than an annual general meeting.
(ii) If for any reason it is impracticable to hold the meeting of the company in the manner prescribed by the
Act or the Articles.
(iii) If for any reason it is impracticable to conduct the
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1beeting of the company in the same manner:
On the occurring of any or more of the said contingencies the court
has to order the calling of a meeting of the company and its holding
802
SUPREME COURT REPORTS
[1976] 1 s.c.1'..
and conducting in such manner as the court thinks fit.
The use of the
word 'and' between the words 'held' and 'conduct' in clause (a)
of
sub-section ( 1) clearly shows that the court has no power to make any
order regarding the holding and conducting of any meeting which has
already been called without ordering a meeting of the company to be
called in place of the meeting already called. If an order under clause
(a) has been made such ancillary or consequential directions as the
court thinks expedient could be given under clause (b), including a
direction within the meaning of the explanation appended thereto. The
language of sub-section (2) further fortifies the above interpretation
of sub-section ( 1) and makes any meeting called, held and conducted
in accordance with an order under sub-section ( 1) to. be a meeting of
the company duly called, held and conducted.
The use of the word
·or' in the first part of sub-section ( 1) may be disjunctive or conjuctive in the manner we have interpreted above.
But undoubted'v
the order under clause (a) has got to be for all the three purposes and
not merely for holding or conducting of the meeting.
In Company Petition No. 85/ 1974 no prayer was made to
the
Court for an order for the calling of a meeting of the Company nor
has an.y such order been made by the High Court in appeal.
In our
opinion, therefore, the application
as presented in the Court under
section 186 of the Act was not maintainable.
No prayer was ever
made to the Court for an order that a meeting of the company be
called.
A fresh application, it goes without saying, if necessary, can
be made under section 186 of the Act. But then it will have to be
made to the authority mentioned in the amended section.
For the reasons stated above, we allow this appeal, set aside the
judgment and order of the High Court passed in OS Appeal No.
64/1974 and dismiss Company Petition No. 85/1974 as being not
maintainable. We shall direct the · parties to bear their
own
costs
throughout.
P.B.R.
Appeal allowed.
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