Case BriefsHigh Courts

Kerala High Court: A Division Bench comprising of V. Chitambaresh and R. Narayana Pisharadi, JJ. allowed a writ appeal challenging imposition of exemplary costs for the sole reason that the bank was not represented by its Secretary.

The appellant herein had filed a writ petition under Kerala Co-operative Societies Act, 1969 challenging the Electoral Officer’s refusal to accept list of members eligible to vote. Since the bank’s Secretary had some physical disability, the President of appellant bank was authorised to file the petition. When it was pointed out that there was no written resolution of the Managing Committee in this regard, the President sought permission to withdraw the petition to enable a properly framed writ petition to be filed by the Secretary representing the bank. However, the learned Single Judge declined the same and dismissed the petition imposing cost of Rs 25,000. Aggrieved thereby, the present writ appeal was filed.

The Court opined that while a co-operative bank or a society must normally be represented by its Secretary as stated in its bye-laws, the President who is duly elected by the members of the Managing Committee of bank stands on a better pedestal than any other member even without a resolution. He can maintain a writ petition in his personal capacity as he is the head of ‘committee’ under Section 2(e) of the Act. Further, absence of resolution empowering the President is a curable defect.

Reliance was also placed on the judgment in Ashok Kumar Mittal v. Ram Kumar Gupta, (2009) 2 SCC 656 where it was held that costs should not be imposed to create a corpus for the State Legal Services Authority. 

In view of the above, the impugned order was set aside.[Thelliyoor Service Co-Operative Bank Ltd. v. State Co-Operative Election Commission, 2018 SCC OnLine Ker 7418, decided on 20-12-2018]

Case BriefsForeign Courts

Constitutional Court of South Africa: A Single Judge Bench comprising of Mogoeng, CJ. Dlodlo, Goliath, Petse, AJ, Froneman, Jafta, Khampepe, Madlanga, and Theron, JJ., unanimously granted the applicants rescission in terms of the Uniform Rules of Court and granted leave to intervene to applicants in the trial.

This application was filed for leave to appeal against an order of Supreme Court Appeal where a refusal of rescission and dismissal of an application for leave to intervene by the High Court of South Africa was upheld. The issue before the Court was whether rescission and leave to intervene should have been granted.

Facts of the case are that a group of individuals acquired a company to use the same as a vehicle for commercial opportunities for the benefit of black people. Applicants were shareholders of this company. The company was converted into a public company in order to open up the shareholding to more than 50 persons. It was renamed NC Housing Services and Development Co. Ltd. Due to failure to file annual company returns ROC removed the name of the company from companies register. Later company wanted to sell its major asset for which they applied for re-registration and were subsequently re-registered. A dispute arose between the applicants and the second and third respondents, regarding the proportion of shares owned by the various shareholders.

The respondent filed an application in High Court against the company where the matter was referred to Trial. High Court held that the shareholders could not have been a party in trial as they could not have personally fought the case as they were representative directors. Supreme Court of Appeal held that although the applicants had been participating in the proceedings both as directors and as shareholders, the resolution passed by them barred them from participating in the litigation due to their failure to have set aside the above resolution.

Therefore, this Constitutional Court held that when an individual shareholder is presented as “shareholder” in court proceedings, he becomes party in the litigation in his personal capacity. Orders of the Supreme Court of Appeal and High Court of South Africa were set aside. Court granted rescission in terms of the Uniform Rules of Court and leave to appeal to intervene in the trial. [Morudi v. NC Housing Services and Development Co. Ltd. , (2018) ZACC 32, dated 25-09-2018]