1. Smt. Kaushalaya Atmaram Manghiramalani (the applicant) has moved an application under section 186 of the Companies Act, 1956 (‘the Act’) for an order for calling an extraordinary general meeting of the shareholders, for appointing the interim Board of Directors authorising them to register the transfer/transmission of shares of Hotel Hiramani P. Ltd. (the respondent company) by the applicant in such a matter as this Board thinks fit.
2. Dr. S.D. Israni, the Company Secretary in whole time practice, appearing on behalf of the applicant reiterated the submissions made in the application of the applicant stating that the abovenamed applicant is the legal heir and widow of Late Shri Atmaram J. Manghiramalani, the promoter of the respondent company. The said respondent company, was promoted by Late Shri Atmaram J. Manghiramalani along with his first wife Late Smt. Ishwaribai. Since the said two promoters were the subscribers to the memorandum and articles of association of the company and, hence, they were the first directors of the company. He further
submitted that Smt. Ishwaribai, first wife of Shri Atmaram Maghiramalani, one of the directors and a shareholder of the company, died on 30-1-1988. Later on Shri Atmaram Manghirarnalani remarried in 1990 with Smt. Kaushalaya, the applicant herein. The said Mr. Atmaram Manghiramalani, director and shareholder of the company also died on 17-9-1997. After the demise of both the promoters as well as shareholders of the respondent company, the respondent company is without any director and it is not in a position to transact its normal business which can be transacted only by a constituted Board of Directors, it has not been possible for the respondent company to effect the transmission of 2,000 equity shares held by the Late Shri Atmaram J. Manghiramalani, as also 3,000 equity shares bequeathed from his first wife namely Late Smt. lashwaribai in the name of Smt. Kaushalaya, the widow and the only surviving legal heir of Late Shri Atmaram J. Manghiramalani. In support of his submissions the Authorised Representative also cited the case of Kapurthala Flour Oil & General Mills Co. (P.) Ltd  8 CLA 11 (CLB) wherein it was held that there is need for electing a Board of Directors by the general body of shareholders. Hence, this present application from the applicant.
3. The perusal of the application specially para 12 reveals that one Mr. Arvind F. Manghiramalani, the nephew of Late Shri Atmaram J. Manghirarnalani, the promoter of the respondent company initiated testamentary proceedings in respect of the property of the said deceased at the Bombay High Court. On a query on the above issue, it has been explained by the authorised representative of the applicant that an appeal was preferred by the applicant in the abovementioncd case and the High Court allowed the same in favour of his client, viz., applicant. Dr. S.D. Israni invited my attention specially to para 9 of the said order of the High Court which inter alia slates that the deceased left behind various shares, securities etc. On the facts and circumstances of the case, no ground is made out to restrain the widow from disposing of the said shares and securities. Dr. Israni further submitted that against the order of the High Court, the nephew of the deceased above referred went to the Supreme Court. The Supreme Court also refused to interfere with the order of the High Court and broadly upheld the order of the High Court.
4. I have carefully considered the material on record, submissions made by the authorised representative of the applicant and also the report submitted by the Registrar of Companies, Mumbai vide his letter dated 2-8-2000 and note that in the absence of the first two promoters/directors of the company, the company does not have any valid constituted Board of Directors and it is in default in complying with the mandatory provisions of section 166 of the Act in holding the general meeting of the shareholders and also the applicant is the legal heir of the deceased director of the company as upheld by the High Court. I have also noted from the report of the Registrar of Companies, Mumbai that the company had filed its last annual return made upto 30-4-1987 only and thereafter neither any balance sheet nor any annual return had been filed by the company. This indicates that the company has come to a stand still position consequent to note having a constituted Board of Directors. It is,
therefore, necessary to put the company on the rails so that it can function properly in accordance with Law. In the facts and circumstances of the case, it would be just and proper to hold the extraordinary general meeting of the company to transact the normal business of the company. It is also desirable to appoint an independent Chairman who will consider and decide the eligibility of the persons as members/proxies to attend and vote at the meeting.
5. In view of above, I hereby pass the following order :
1. Dr. S.D. Israni, Company Secretary in Whole Time Practice is hereby appointed as Chairman for holding the extraordinary general meeting of the company, who has agreed to act as such, in accordance with law after serving notices to all the existing members of the company.
2. The said extraordinary general meeting shall be called for a time during business hours on a day that is not a public holiday and held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.
3. The said meeting shall be deemed to be the extraordinary general meeting of the company for the purpose of conducting usual business within the meaning of section 173(1)(a) of the Act.
4. The notices convening the said extraordinary general meeting shall be published in the local newspaper in English as well as regional language.
5. The Chairman shall decide the eligibility of persons to attend and vote at the time of meeting as members/proxies and his decision shall be final.
6. The Chairman shall record the minutes within two weeks after the conclusion of the meeting.
7. The quorum for the meeting shall be as per the articles of association of the company but if such a quorum is not present, even a single member present in person or by proxy shall be deemed to be the quorum for constituting the meeting.
8. All parties will extend full assistance and cooperation to the Chairman in holding and conducting the meetings.
9. The fee for the Chairman for conducting the extraordinary general meeting has been fixed at Rs. 7,500 which shall be paid by the applicant. The travelling expenses of the Chairman shall also be paid by the applicant.
6. This order will not prevent the Registrar of Companies, Mumbai from taking any action as may be deemed fit and proper, in accordance with law against the company, its directors/officers in default committed by them for non-compliance of the statutory provisions of the Act.