Must Read

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

By
Image
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
Post a Comment

Cotman v. Brougham [1918-19]

By

 Cotman v. Brougham Case Summary 

Introduction

A very interesting case in the Court in which, a company in its object clause of MoA mentioned various acts in respect of making itself capable to involve in almost any kind of businesses. Though after registration of MoA incorporation certificate is to be issued by the registrar which becomes a conclusive evidence. But what if the MoA not complying the Act registered by the registrar, and incorporation certificate issued by the registrar. In this case the Court had been dealt with all these issues.  


Facts

The Essequibo Rubber and Tobacco Estates Ltd. (E. company) registered under Companies (Consolidation) Act, 1908. The E. company underwrote and took up shares in another company the business of which was not connected or mentioned in its objects. When the other company went on to liquidation, the E. company which was also on liquidation, was placed in list B of contributors in respect of 14000 pounds due upon those shares. To remove its name from the list of contributors, the E. company made an application on the ground that the whole transaction was ultra vires. 

MoA of the E. company mentioned a variety of objects in cl.(3) such as;-

  1. to develop property abroad
  2. promotion of other companies and dealing in their shares, etc
It also concluded that “the objects set forth in any sub-clause of this clause shall not, except when the context expressly so requires, be in any wise limited or restricted by reference to or inference from the terms of any other sub-clause, or by the name of the company. None of such sub-clauses or the object therein specified or the powers thereby conferred shall be deemed subsidiary or auxiliary merely to the objects mentioned in the first sub-clause of this clause, but the company shall have full power to exercise all or any of the powers conferred by any part of this clause in any part of the world, and notwithstanding that the business, undertaking, property, or acts proposed to be transacted, acquired, dealt with, or performed do not fall within the objects of sub-cl. 1.”

Issues

  1. Whether the transaction was ultra vires or not? 

Case History and Decisions-

  1. Application to Neville J. by the E. company got refused. 
  2. E. company appeal to the Court of Appeal also dismissed.
  3. The company appealed before this Court.

Ratio Decidendi of this Court-

  1. Clause 3,8 and 12 of the MoA are wide enough to cover the transaction made by the company.
  2. The Act put a great responsibility on registrar in registering an MoA and giving incorporation certificate to the company. The registrar can refuse registration if he finds that the Act have not been complied with. 
  3. S.17 of Company (consolidation) Act, 1908 makes the certificate of incorporation as conclusive evidence.
  4. The narrower the objects expressed in MoA, less is the subscriber's risk.
  5. A MoA not specifying or disclosing the real object or objects with the intent to include every conceivable form of activity is of worst kind and non-compliant to the Act.
  6. The Act provides a model forms of MoA in Schedule 3 that should be used in all matters to which those forms refer.
  7. When a substratum of the company is gone, a winding up order may be issued under S. 129(vi)
  8. The winding up of a company by the reason of failure of substratum is a question of equity between a company and its shareholders. Whereas whether a transaction is ultra vires or not is a question of law between company and third party.
  9. There should be a main purpose in a MoA which  mention a variety of acts.

Decision

  1. Agreed with both the lower Courts and held that the transaction was intra vires.
  2. Dismissed the appeal with costs.


Comments

Post a Comment

Popular Post

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

By
Image
Ashbury railway carriage v riche|| Case Summary  Introduction   This case is related to the " Doctrine of Ultra Vires". In this case, the directors of the appellant company made an agreement with the plaintiff which was beyond the objectives, as mentioned in its MoA, of the appellant Company. Since the agreement was beyond its objectives, the appellant company repudiated the agreement later. Therefore the suit was brought by the plaintiff to recover the damages. Facts   The directors of the appellant company (Ashbury Railway Carriage) had contracted to obtain a concession from Gillon and Poeters Baerston, who obtained this right from the Belgian Government, to make a railway.  For this purpose, the directors of the appellant company again entered into a contract with Riche, a contractor, the purpose of which was to establish a société anonyme,  and as the plaintiff went on with the work, the appellant company had to pay into the hands of société anonyme,  Earlier the sharehol
Read more

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

By
Image
Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate, AIR 1958 SC 353 Case Summary Introduction The case of Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate involved a dispute between the management of the Dimakuchi Tea Estate and its workers. This case has discussed and cleared the meaning of the expression "any person" used in S.2(K) of the Industrial Dispute Act, 1947. The Supreme Court ruled in favour of a limited interpretation of the term "any person" thereby excluding the present appellant from the ambit of the Industrial Disputes Act of 1947. This decision denied the jurisdiction of the Industrial Tribunal to adjudicate the dispute and extended the benefits and protections of the Act to the employers. Facts of the Case The dispute was raised over the termination of the service of Dr K.P. Banerjee, who was appointed as an Assistant Medical Officer in the Respondent's estate (Dimakuchi Tea Estate), on the grounds of being incompetent. Although th
Read more