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Gulshan Prakash v. State of Haryana (2010) 1 SCC477

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Gulshan Prakash v. State of Haryana (2010) 1 SCC 477||Case Summary  Introduction  In this appeal, the Court has interpreted Article 15(4) of the Fundamental Right. It has been added by the 1st Amendment Act, of 1951. Facts The State of Haryana instructed Maharshi Dayanand University (MDU), Rohtak to conduct entrance examination for MD/MS/PG courses for the Session 2008-2009. The appellant made a representation to the Health Secretary for providing reservation for SC and ST in the Post Graduate courses, Since there was no response from the Health Secretary the Appellant filed a petition in the High Court.  The High Court dismissed the petition of the appellant therefore the appellant approached the Supreme Court by Special Leave Petition under Article 136. Appellant Contentions  MDU, Rohtak has provided 20% reservation for the graduate level courses or undergraduate courses therefore the said University should also provide reservation in for the PG courses.  The Government o
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Royal British Bank v. Turquand (1843-60)

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 Royal British Bank v. Turquand (1843-60) 

Introduction 

The doctrine of Indoor Management also known as "Turquand rule"  originated from the case  "Royal British Bank V Turquand, 1843-60. In this case we will see how an innocent bank has been saved by the judges by following Doctrine of Indoor management. 


Facts 

The Company named  "Cameron’s Coalbrook Steam, Coal, and Swansea"  London Railway Company, had borrowed money from "Royal British Bank"  by issuing a bond which had signed by two directors under the seal of the company.The  bank after reading memorandum of association and article of association  presumed that required resolution had been passed by the company and therefore gave amount. 

Later on, when the company wound up process started, the bank asked for their payment which has been denied by official liquidator of the company on the ground that provisions mentioned in article of association had not followed by the company therefore bank appealed in the court. 

Defendant Contention 

  • As per Article of association, to issue a bond it was necessary to pass a resolution which was not passed by the company, therefore it is not a valid bond. 
Plaintiff /Bank Contention 
  • Company has to repay  amount as after reading the article of association we  presumed that the resolution has been passed in a General meeting. 
Issue 
  1. Whether the Bank will be entitle to get its payment as defendant borrowed money without passing resolution which is not permissible as per article of association ? 
Ratio Decidendi 
  • The deed of settlement limits the power of borrowing on bond by providing a compulsory step of passing a resolution in its general meeting.
  • The plaintiff were bound to know the statute and the content of the article of association or deed of settlement.
  • The plaintiff after reading the AoA was satisfied to presume that the company is  authorised to raise certain sum and there is no statutory restriction to it as to the mode of executing the power.
  • As per "JERVIS CJ"
    •  the parties dealing with the company are bound to read the statute and the deed of settlement but they are not bound to do more than it.
  • As per 'Doctrine of Indoor Management'
      •  the outsider can also presume that the company must have followed the proceedings which are required to be followed by the company as per article  of association.
Judgment 

  • The parties here, after reading the deed of settlement found that there is not a prohibition from borrowing, but a permission to do on certain condition. 
  • Therefore appeal allowed by the Court and bank will get payment as bank knew about the deed of settlement and presumed that required internal proceedings have been fulfilled. 



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Ashbury Railway Carriage and Iron Co. Ltd. v. Riche (1875)

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Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate, AIR 1958 SC 353

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