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Goodenough Ltd. (Goodenough), a public Ltd.

Company, listed on various stock exchanges


since 1997 having more than 250000 public shareholders, is registered under the Laws of the
Public of Islandia.
At the Annual General Meeting, held on 25 th March 2013, Mr. James Mc Linden was appointed
as the Whole Time Director (WTD) of the Goodenough for a period of 5 years w.e.f. 12 th
February 2013 by an ordinary resolution passed by the shareholders of god enough i.e. The
appointment was validly made following all the requisites of the Company Act 1956.
On 1st April 2013, Company Act was amended and the Company Act 2013 was brought into
force. Many provisions were modified and introduced including Sec 196. This section inter alia
provided that:
196[] (3) No company shall appoint or continue the employment of any person as
Managing Director, Whole time Director, or Manager who- is below the age of 21 years or has
attained the age of 70 years:
Provided that the appointment of such a person who has attained the age of 70 years may be
made by passing a special resolution in which case the explanatory statement annexed to the
notice for such motion shall indicate the justification for appointing such a person;
Is an undischarged insolvent or at any time been adjudged as an insolvent;
Has at any time suspended payment to his creditors or makes, or has at any time made, a
composition with them; or
Has at any time been convicted by the court of an sentence for a period of more than 6 months
On 15th April 2013, Mr. McLinden, the WTD of the Goodenough attained the age of 70 years.
Near around 3 years later, i.e. on 12th may 2016 Mr. Christopher Ryland (a share holder of
Goodenough filed a suit before the High Court of the State of Winchester challenging the
Continuation of Mr. McLinden as the WTD u/s 196 (3) (a)of the 2013 Act on account of his
attainment of 70 years of age. By the suit, Mr. Ryland sought a declaration that the continuation
of Mr. McLinden, was illegal and void ab initio from 15 th April 2013 along with this notice of

motion was filed seeking urgent interim relief restraining Mr. McLinden from functioning or
continuing to exercise powers as WTD, pending disposal of the suit.
Mr. McLinden on 19th May 2016 filed a detailed reply denying the effect of section 196(3) (a) on
his tenure of 5 years, which was validly made as per the provisions of 1956 Act. Along with this,
Mr. McLinden raised a preliminary issue u/s 9A of the CPC challenging maintainability of the
suit and further contended that this issue ought to be decided first.
On 13th June 2016, a learned Single Judge of the High Court of Essos Concluded that the issue of
Limitation need not be decided as a preliminary issue and proceeded to decide the notice of
motion and thus issued an interim injunction restraining Mr. McLinden from Continuing as the
WTD of the Goodenough pending disposal of the Suit.
Being aggrieved by the order of the learned Single Judge, Mr. McLinden challenged the said
judgment in an appeal before the Division Bench of the HC of Winchester. By an order dated 28th
July 2016, the Honble DB upheld the order of the Single Judge and dismissed the appeal.
Again, Mr. McLinden, challenged the orders of the HC of Winchester before the Honble SC of
Islandia by way of Special Leave Petition and in the petition for special leave to appeal, MR.
McLinden raised a preliminary issue relating to Limitation in accordance with section 9A CPC.
On the merits of the matter, Mr. McLinden contended that sec 196(3) (a) of the Company Act
2013 can not act retrospectively on an appointment made validly according to the 1956 Act and
further contended that it will not act as an immediate disqualification on the appointment and
continuation of the WTD. It was also argued that a purposive interpretation of Section 196 (3)
would show that the word continue in the said section would apply only in context of clause
(b), (c) and (d) of the aforesaid section and not on clause (a) of section 196.