Tuesday, June 09, 2009

Contract Act_Practical Problems_95

A, the owner of a hotel, contracts with B, to give him accommodation therein for the sale of his hosiery products and to furnish the accommodation with necessary furniture. A refuses to perform the contract. Can specific performance order be issued by court in this circumstances ?

Companies Act_Practical Problems_85

The Articles of Association of a company provide that the meeting of the Board of
Directors of the company will be held on the last Friday of every month. The Secretary of the company as a result does not serve the notice to the individual directors of the company. Consequently, a meeting of the Board of Directors was held on 20th February, 2008. The meeting was attended by all the directors with the exception of two directors out of a total of 10 directors and certain resolution were passed. The two absentee directors object to the meeting and the proceedings of the meeting for want of notice. Referring to the provisions of the Companies Act, 1956, decide:
(i) Whether the objection raised by the two absentee directors is valid?
(ii) Would your answer be the same in case the Secretary of the company, instead of sending notice on a usual format to the individual directors, sent a copy of the
Articles of Association to each one of the directors?

Section 286 of the Companies Act, 1956 does not specify any form of notice or period of notice. Usually, a week’s notice is considered sufficient. However, if the Articles provide that Board Meetings will be held on fixed days of every month or where the directors are duly informed that in future all meetings of the Board will be held on a fixed day of every month, it will be sufficient compliance with the statute [A. Chettiar Firm v. Kaleshwar Mills]. But, even where meetings are held on a fixed day of every month, a notice is usually sent to the directors as a reminder.