CA No. 159/2011 & CP No. 317 (186)/KB/2011. Case: Pradip Kumar Ghatak and Another Vs Asansol Club Ltd. and Another. Company Law Board

Case NumberCA No. 159/2011 & CP No. 317 (186)/KB/2011
JudgesB.S. V Prakash Kumar, Member (Judicial)
IssueCompany Law
Citation2012 (106) CLA 245, 2012 (113) SCL 247 (CLB)
Judgement DateJuly 29, 2011
CourtCompany Law Board


B.S. V Prakash Kumar, Member (Judicial), (Kolkata Bench)

1. The petitioners moved this petition against the respondents under section 186 of the Companies Act, 1956 read with 44 of Company Law Board Regulations, 1991, seeking reliefs as follows:

(a) To declare the proposed meeting, to change the articles of association, dated 23rd April, 2011 as void and ultra virus.

(b) To direct the Board of the club to formulate the proper procedures and guidelines for changing the articles of association and to approve the same in the general meeting.

(c) To formulate a procedure, in consonance of natural justice, for safeguarding the interest of the existing members.

(d) To define the power of Board in the manner of altering the articles of association.

(e) A direction to the Board to clarify, item-wise the purpose for change of articles of association and the same is to be put to vote separately with a proper explanatory statement.

(f) Awarding costs and other reliefs.

The submissions, heard in this case.

2. For the sake of brevity, the Companies Act, 1956 is hereby referred as "the Act" and the respondent-company is referred as "the Club".

Brief facts of the case

3. This club, i.e., 1st respondent, is a limited company by guarantee having its registered office at Court More, Asansol, in the State of West Bengal, consisting of 500 members with voting powers and 100 associates without voting power.

The petitioners, two in number, submitted that they are entitled to vote in the general meeting called for the purpose of changing articles of association. Here, the Club is constituted to carry on the activities of entertainment, recreation and other charitable activities. This is managed by the Board of directors. The liabilities of the members are limited by guarantee.

Second respondent is the honorary secretary circulated the resolution of the Board of directors proposing to hold an extraordinary general meeting ('EGM') on 23rd April, 2011 for adoption of a resolution passed in the executive committee meeting held on 17th March, 2011 to change the articles of association - (1) for increasing the number of members from 500 to 700; (2) to authorise the executive committee to admit new members; (3) to convert associate members as members of the Club; (4) to provide opportunity for all the members to take part in the management of the Club by imposing restriction on period of holding the post of president, vice president, honorary secretary and honorary treasurer; (5) to authorise the executive committee to constitute election committee for conducting fair...

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