MEETINGS

Question 1

Meaning of MEETING

Answer 1

A meeting may be generally defined as a gathering or assembly, getting together of a number of persons for transacting any lawful business, for entertainment or the like. There must be at least two persons to constitute a meeting. However, in certain exceptional cases, even one person may constitute a valid meeting.

Question 2

Kinds of meetings

Answer 2

1. Shareholders’ meetings :
   (a) Statutory meeting,
   (b) Annual general meeting (AGM),
   (c) Extraordinary general meeting (EGM), and
   (d) Class meetings.
2. Board meetings;
3. Meetings of the Committees of the Board;
4. Meetings of Debenture-holders;
5. Meetings of Creditors :
   (a) for purposes other than winding-up, and
   (b) for winding-up;
6. Meetings of contributories in winding-up.

Question 3

The proper authorities to call the meetings are :

Answer 3

(a) Board of Directors - The Articles of Association of a company normally empower the Board of directors to convene general meetings. However, Board of directors have this power at common law even if it is not expressly conferred on them. Notice of a meeting given by the Secretary without the sanction of the Board of directors is invalid.
(b) Shareholders - The members of a company have, in certain circumstances, the right to insist on the calling of an extraordinary meeting [For details, please see discussion under Para 17.3]
(c) Tribunal [Sections 97 and 98] - If for any reason there occurs a default in holding an AGM, then the Tribunal may, on a petition of any member, direct the calling of AGM (Section 97). In case of an extraordinary general meeting (EGM), Tribunal has been conferred with the similar powers. However, an EGM may be called or directed to be called not only on a petition of any member but also on a petition of any director or even suo motu. But, power to call an EGM can be exercised only where it has become impracticable to call, hold or conduct such meeting [Section 98].

Question 4

The following general rules should be observed while issuing notices of meetings

Answer 4

(a) The notice may take any reasonable form which sufficiently conveys to the person, entitled to receive it, information enabling the person to attend the meeting and to take part in its deliberations.
(b) The notice must specify the date, time and place of the meeting.
(c) The notice must state the nature of the business to be transacted, that is, a complete agenda of the meeting should be forwarded with or as part of the notice.
(d) The notice must be served in the manner prescribed in the Articles read with the Companies Act.

Question 5

Gap between two AGMs (Section 96)

Answer 5

Section 96 contains the following provisions in this regard:
(i) First AGM - The first Annual General Meeting of a company shall be held within nine months from the date of the closing of its financial year. No extension of time can be allowed for holding the first AGM.
(ii) Subsequent AGMs
(a) There must be one meeting held in each year, i.e., calendar year. Where
the first AGM of a company has been held within nine months from the date of the closing of its financial year then it need not hold another AGM
in the year of its incorporation.
The meeting adjourned to next calendar year does not become meeting of that year [Sree Meenakshi Mills Co. Ltd. v. Assistant Registrar of Joint Stock Companies [1938] 8 Comp. Cas. 175 (Mad.).]
The gap between two AGMs must not be more than fifteen months.
Meeting must be held not later than six months from the close of the financial year.

Question 6

Can a general meeting properly convened be cancelled or its holding
deferred?

Answer 6

The Act is silent on these issues. However, the Secretarial Standard SS-2 issued by the ICSI contains a view on these. SS-2 states that a Meeting convened upon due Notice shall not be postponed or cancelled. However, if, for reasons beyond the control of the Board, a Meeting cannot be held on the date originally fixed, the Board may reconvene the Meeting, to transact the same business as specified in the original Notice, after giving not less than three days intimation to the Members. The intimation shall be either sent individually in the manner stated in this Standard or published in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and in an English newspaper in English language, both having a wide circulation in that district. A listed company should also inform SEBI about the deferment and the fresh date.

Question 7

First Meeting

Answer 7

According to section 173(1), every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation.

Question 8

Subsequent Meetings

Answer 8

As per section 173(1) read along with SS-1* provides that every company must hold a minimum number of four meetings of its Board of Directors every year and the gap between two Board meetings must not be more than one hundred and twenty days.
A One Person Company, small company and dormant company shall be deemed to have complied with the provisions of this section if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days. Also the requirement as to quorum, as set out in section 174, shall not apply to One Person Company in which there is only one director on its Board of Directors [Section 173(5)].

Question 9

Can participation of a director in a Meeting telephonically or Meeting through teleconferencing be considered as participation of a director through Electronic mode or Meetings through Electronic mode?

Answer 9

ICSI, in this regard, has clarified that “Video conferencing or other audio- visual” means audio-visual electronic facility employed which enables all the persons participating in a meeting to communicate concurrently with each other without an intermediary and to participate effectively in the meeting. Thus, participation of a director in a meeting telephonically or Meetings through telecon- ferencing cannot be considered as participation of a director through Electronic mode or Meeting through Electronic mode.

Question 10

Notice of Board Meeting [Section 173]

Answer 10

A meeting of the Board shall be called by giving not less than seven days’ notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means.
SS – 1, in this regard, provides that the notice in writing of every Meeting shall be given to every Director by hand or by speed post or by registered post or by courier or by facsimile (fax) or by e-mail or by any other electronic means [Section 173(3)].
The Notice shall be sent to the postal address or e-mail address, registered by the Director with the company or in the absence of such details or any change thereto, any of such addresses appearing in the Director Identification Number (DIN) registration of the Director.

A meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting.

If independent director was not present and he disapproves or abstains from ratifying the Minutes, the decision of the Board fails. The company cannot, therefore, implement such decision taken at the Board meeting until it is ratified by at least one independent director.
Penalty: Every officer of the company whose duty is to give notice under this section and who fails to do so shall be liable to a penalty of twenty-five thousand rupees [Sub-section (4)].

Question 11

Quorum

Answer 11

According to section 174(1), the quorum for a meeting of the Board of directors shall be 1/3rd of its total strength (any fraction contained in that 1/3rd to be rounded off to one) or two directors, whichever is higher*. “Total strength” shall not include directors whose places are vacant - Explanation (ii). Again, interested director(s) shall not be counted for the purposes of quorum. “Interested director” means a director within the meaning of sub-section (2) of section 1846.

Question 12

Interested directors

Answer 12

If, at any time, the number of interested directors exceed or is equal to 2/3rd of the total strength, the remaining directors, that is to say, the number of directors who are not interested, present at the meeting, being not less than two, shall be the quorum of such meeting [Section 174(3)].
For determination of quorum, recourse shall be had to the total strength of the Board rather than the full proposed strength as per the Articles. Thus, where the company had total strength of 6 directors though there was a provision for appointment of 15 directors and articles provided that 1/3rd of total number of directors shall form quorum, presence of 2 directors constituted a valid quorum - Pradip Kumar Banerjee v. Union of India [2001] 32 SCL 84 (Cal.).

For this purpose, a Director shall be treated as interested in a contract or arrange- ment entered into or proposed to be entered into by the company:
(a) with the Director himself or his relative; or
(b) with any body corporate, if such Director, along with other Directors holds more than two per cent of the paid-up share capital of that body corporate, or he is a promoter, or manager or chief executive officer of that body corporate; or
(c) with a firm or other entity, if such Director or his relative is a partner, owner or Member, as the case may be, of that firm or other entity

Question 13

Adjournment of the meeting – where quorum is present

Answer 13

If a meeting of the Board could not be held for want of quorum, then, unless the articles otherwise provide, the meeting shall automatically stand adjourned till the same day in the next week, at the same time and place, or if that day is a national holiday, till the next succeeding day which is not a national holiday, at the same time and place [Section 174(4)].
The provision of section 174 shall not be deemed to have been contravened merely by reason of the fact that a meeting of the Board which had been called in compliance with the terms of that section could not be held for want of a quorum.

Question 14

Minutes of the Board meeting

Answer 14

Section 118 contains provisions with respect to minutes of every meeting of Board
of Directors or of every committee of the Board. In this regard, it provides as follows:
(1) Every company shall cause minutes of the proceedings of every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in such manner as may be prescribed.
(2) SS-1 requires that minutes of the Board meeting shall be kept at the Registered office of the company or at such place as may be approved by the Board. The minutes shall be kept within thirty days of the conclusion of every such meeting.
(3) The minutes shall be kept in books kept for that purpose with their pages consecutively numbered.
(4) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.
(5) All appointments made at any of the meetings aforesaid shall be included in the minutes of the meeting.
(6) The minutes shall also contain—
(a) the names of the directors present at the meeting; and
(b) in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting from, or not concurring with the resolution.
(7) There shall not be included in the minutes, any matter which, in the opinion of the Chairman of the meeting,—
(a) is or could reasonably be regarded as defamatory of any person; or
(b) is irrelevant or immaterial to the proceedings; or
(c) is detrimental to the interests of the company.
(8) The Chairman shall exercise absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the grounds specified in (7) above.
(9) The minutes kept in accordance with the provisions of this section shall be evidence of the proceedings recorded therein.
(10) Where the minutes have been kept, as above then, until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly taken place, and in particular, all appointments of directors, key managerial personnel, etc. shall be deemed to be valid.
(11) Every company shall observe secretarial standards with respect to Board meetings specified by the Institute of Company Secretaries of India and approved as such by the Central Government.
(12) If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty- five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.
(13) If a person is found guilty of tampering with the minutes of the proceedings of meeting, he shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

Question 15

Contents of Minutes

Answer 15

A. General Contents

1. Minutes shall state, at the beginning the serial number and type of the Meeting, name of the company, day, date, venue and time of commencement and conclusion of the Meeting.
   In case a Meeting is adjourned, the Minutes shall be entered in respect of the original Meeting as well as the adjourned Meeting. In respect of a Meeting convened but adjourned for want of quorum, a statement to that effect shall be recorded by the Chairman or any Director present at the Meeting in the Minutes.
2. Minutes shall record the names of the Directors present physically or through Electronic Mode, the Company Secretary who is in attendance at the Meeting and Invitees, if any, including Invitees for specific items.
   The names of the Directors shall be listed in alphabetical order or in any other logical manner, but in either case starting with the name of the person in the Chair.
   The capacity in which an Invitee attends the Meeting and where applicable, the name of the entity such Invitee represents and the relation, if any, of that entity to the company shall also be recorded.
3. Minutes shall contain a record of all appointments made at the Meeting.

Question 16

Specific Contents

Answer 16

(a) Record of election, if any, of the Chairman of the Meeting.
(b) Record of presence of Quorum.
(c) The names of Directors who sought and were granted leave of absence.
(d) The mode of attendance of every Director whether physically or through Electronic Mode.
(e) In case of a Director participating through Electronic Mode, his particulars, the location from where and the Agenda items in which he participated.
(f) The name of Company Secretary who is in attendance and Invitees, if any, for specific items and mode of their attendance if through Electronic Mode.
(g) Noting of the Minutes of the preceding Meeting.
(h) Noting the Minutes of the Meetings of the Committees.
(i) The text of the Resolution(s) passed by circulation since the last Meeting, including dissent or abstention, if any.
(j) The fact that an Interested Director was not present during the discussion and did not vote.
(k) The views of the Directors particularly the Independent Director, if specifi- cally insisted upon by such Directors, provided these, in the opinion of the Chairman, are not defamatory of any person, not irrelevant or immaterial to the proceedings or not detrimental to the interests of the company.
(l) If any Director has participated only for a part of the Meeting, the Agenda items in which he did not participate.
(m) The fact of the dissent and the name of the Director who dissented from the Resolution or abstained from voting thereon.
(n) Ratification by Independent Director or majority of Directors, as the case may be, in case of Meetings held at a shorter Notice and the transacting of any item other than those included in the Agenda.
(o) The time of commencement and conclusion of the Meeting.

Apart from the Resolution or the decision, Minutes shall mention the brief background of all proposals and summarise the deliberations thereof. In case of major decisions, the rationale thereof shall also be mentioned.

Question 17

Recording of Minutes

Answer 17

Minutes shall contain a fair and correct summary of the proceedings of the Meeting.
The Company Secretary shall record the proceedings of the Meetings. Where there is no Company Secretary, any other person duly authorised by the Board or by the Chairman in this behalf shall record the proceedings.
The Chairman shall ensure that the proceedings of the Meeting are correctly
recorded.
The Chairman has absolute discretion to exclude from the Minutes, matters which in his opinion are or could reasonably be regarded as defamatory of any person, irrelevant or immaterial to the proceedings or which are detrimental to the interests of the company.
Minutes shall be written in clear, concise and plain language.
Minutes shall be written in third person and past tense. Resolutions shall however be written in present tense.
Minutes need not be an exact transcript of the proceedings at the Meeting.
In case any Director requires his views or opinion on a particular item to be recorded verbatim in the Minutes, the decision of the Chairman whether or not to do so shall be final.
Any document, report or notes placed before the Board and referred to in the Minutes shall be identified by initialling of such document, report or notes by the Company Secretary or the Chairman.
Wherever any approval of the Board is taken on the basis of certain papers laid before the Board, proper identification shall be made by initialling of such papers by the Company Secretary or the Chairman and a reference thereto shall be made in the Minutes.
Where any earlier Resolution(s) or decision is superseded or modified, Minutes shall contain a reference to such earlier Resolution(s) or decision.
Minutes of the preceding Meeting shall be noted at a Meeting of the Board held immediately following the date of entry of such Minutes in the Minutes Book.
Minutes of the Meetings of any Committee shall be noted at a Meeting of the Board held immediately following the date of entry of such Minutes in the Minutes Book.

Question 18

Finalisation of Minutes

Answer 18

Within fifteen days from the date of the conclusion of the Meeting of the Board or the Committee, the draft Minutes thereof shall be circulated by hand or by speed post or by registered post or by courier or by e-mail or by any other recognised electronic means to all the members of the Board or the Committee for their comments.
Where a Director specifies a particular means of delivery of draft Minutes, these shall be sent to him by such means.
If the draft Minutes are sent by speed post or by registered post or by courier, an additional two days may be added for delivery of the draft Minutes.
Proof of sending draft Minutes and its delivery shall be maintained by the company.

If any Director communicates his comments after the expiry of the said period of seven days, the Chairman shall have the discretion to consider such comments.
In the event a Director does not comment on the draft Minutes, the draft Minutes shall be deemed to have been approved by such Director.
A Director, who ceases to be a Director after a Meeting of the Board is entitled to receive the draft Minutes of that particular Meeting and to offer comments thereon, irrespective of whether he attended such Meeting or not.

Question 19

Business to be transacted [Section 102]

Answer 19

Ordinary business which relates to the following matters:
(i) the consideration of financial statements and the reports of the Board of
Directors and auditors;
(ii) the declaration of any dividend;
(iii) the appointment of directors in place of those retiring;
(iv) the appointment of, and the fixing of the remuneration of, the auditors

Question 20

Special business

Answer 20

Any other business scheduled to be transacted at the meeting will be deemed to be special business.
Where any items of business to be transacted at the meeting are deemed to be special as aforesaid, there shall be annexed to the notice calling such meeting, namely:—
the nature of concern or interest, financial or otherwise, if any, of—
(i) every director and the manager, if any;
(ii) every other key managerial personnel; and
(iii) relatives of the persons mentioned in (i) and (ii) above.
The statement should also contain any other information and facts that may enable members to understand the meaning, scope and implications of the items of business and to take decision thereon.
Where any item of special business to be transacted at a meeting of the company relates to or affects any other company, the extent of shareholding interest in that other company of every promoter, director, manager, if any, and of every other key managerial personnel of the first mentioned company shall, if the extent of such shareholding is not less than two per cent of the paid-up share capital of that company, also be set out in the statement.

Question 21

DEFAULT IN HOLDING AGM( Tribunal to call or direct the calling of AGM)

Answer 21

Section 97 of the Companies Act, 2013 provides that if any default is made in holding the annual general meeting of a company under section 96, the Tribunal may, notwithstanding anything contained in this Act or the articles of the company, on the application of any member of the company, call, or direct the calling of, an annual general meeting of the company and give such ancillary or consequential directions as the Tribunal thinks expedient.

Directions given by the Tribunal may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

A general meeting held in pursuance of sub-section (1) shall, subject to any directions of the Tribunal, be deemed to be an annual general meeting of the company under this Act.

Question 22

Penalty:

Answer 22

If any default is made in holding a meeting of the company in accordance with section 96 or section 97 or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with a fine which may extend to one lakh rupees and in the case of continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues (Section 99).

Question 23

Extraordinary General Meeting (EGM)

Answer 23

An EGM is convened for transacting some special or urgent business that may arise in between two AGMs; for instance, change in the objects or shift of registered office or alteration of capital or removal of a director(s)/auditor(s).
Business to be transacted - All business transacted at such meetings is called special business. Therefore, every item on the agenda must be accompanied by a ‘State- ment’ in terms of section 102 (Discussed under AGM above).

Question 24

Who may call - An EGM

Answer 24

(i) By the Board of Directors of its own accord;
(ii) By the Directors on requisition;
(iii) By the requisitionists themselves;
(iv) By the Tribunal.

(i) By the Directors - The Board of directors may call a general meeting of the members at any time by giving not less than 21 days’ clear notice (Section 101). A shorter notice may, however, be held valid if consent is accorded thereto by members of the company holding 95 per cent or more of the voting rights.
An extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India.
(ii) By the Directors on requisition [Section 100] - The Board of directors must convene a general meeting upon request or requisition if the following conditions are satisfied:

Question 25

By the Directors on requisition [Section 100] -

Answer 25

1. (a) In the case of a company having a share capital, the requisitionists constitute such number of members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting;

(b) in the case of a company not having a share capital, such number of members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote.

2. The requisition must state the objects of the meeting, i.e., it must set out the matters for the consideration of which the meeting is to be called.
   However, the requisitionists are under no obligation to attach the explanatory statement to the requisition. It is for the Board of directors, on receipt of the requisition, to include in the notice convening the meeting the necessary explana- tory statement - Supreme Court in Life Insurance Corpn. of India v. Escorts Ltd. AIR 1986 SC 1370.
   There is no obligation to disclose reasons for removing a person from Directorship of a company prior to EGM where such proposal is to be considered; no injunction to hold such EGM, can be granted by Court - Jai Kumar Arya v. Chhaya Devi [2017] 87 taxmann.com 69 (Delhi)
3. Requisition must have been deposited at the registered office of the company .
4. Requisition must be signed by the requisitionists .
   In case all the aforesaid conditions are satisfied, i.e., a valid requisition has been received, the Board of directors must within 21 days of the receipt of the requisition proceed to call the meeting on a day not later than 45 days of the receipt of the valid requisition .

Question 26

NOTICE

Answer 26

The company must give clear twenty-one days’ notice* to (i) every member of the company; (ii) the legal representative of a deceased member; (iii) the assignee of an insolvent member; (iv) the auditor(s) of the company; (v) every director of the company.
Any accidental omission to give notice to, or the non-receipt of such notice by, any member or other person who is entitled to such notice for any meeting shall not invalidate the proceedings of the meeting.
Notice may be given either in writing or through electronic mode in such manner as may be prescribed3

Question 27

MEANING OF CLEAR DAYS

Answer 27

‘Clear days’ means the days must be calculated excluding the day on which the notice is served and the day on which the meeting is to be held. In case of delivery by post, such service shall be deemed to have been effected at the expiration of forty eight hours after the letter containing the same is posted - Rule 35 of the Companies (incorporation) Rules, 2014. The effect of this provision is that if notice of a general meeting is sent by post, it must be posted at such time as to give 21 clear days’ notice as required by section 101, plus 48 hours in addition. Each of the twenty-one days must be a full calendar day, so that notice can be said to be not less than 21 days’ notice - Bharat Kumar Dilwali vs. Bharat Carbon Ribbon Mfg. Co. Ltd. [1973]. Therefore, notice of a general meeting must be sent at least 25 days before the date of the meeting (where the service of notice is by post). If, for instance, a general meeting is to be held at 3 p.m. on 6th April, service of the notice of the meeting will be deemed to have been duly effected if it had been dispatched by post at any time before 3 p.m. on 13th March. This will satisfy the requirement of 21 clear (full) days’ notice plus 48 hours for transmission by post.
The presumption of deemed delivery cannot be raised when at the time of posting, the post office was, within the knowledge of the company, on strike - Bredman vs. Trinity Estate Plc [1989].
Section 101 does not state at which post office or box the letter has to be posted. Presumably, it has to be posted at or near the place of the registered office of the company. The provisions in the section will not be satisfied if the posting is made deliberately at any far-off place, with

Question 28

SECTION 98

Answer 28

. If for any reason it is impracticable to call a meeting of the company, other than an annual general meeting, the Tribunal may direct the calling of the meeting :
(a) on its own motion, or
(b) on an application of any director, or
(c) on an application of any member entitled to vote at that meeting.
For invoking section 98, applicant should be either a director or member of company entitled to vote at meeting and, secondly, it should be ‘impracticable’ to call an EGM of the company. Unless these two conditions are satisfied, no applica- tion will lie under section 98 - United Shippers Ltd. vs. Aluminium Industries Ltd. [2007] 73 SCL 70.
For the aforesaid meeting, the Tribunal may give directions in respect of the place, date and the manner in which the meeting be held and conducted. It may also give such ancillary or consequential directions as it thinks expedient, including a direction that one member present in person or by proxy shall be deemed to constitute a meeting.
Impracticability of convening meeting by requisitionists under section 100 is a condition precedent to invoke section 98. Thus, where the directors failed or refused to call and hold an EGM against a valid requisition, the requisitionists could themselves call and hold the meeting. Instead of exercising their right under section 100 (4), as aforesaid, they cannot rush to CLB (now Tribunal) to secure an order for calling and holding EGM [B. Mohandas vs. A.K.M.N. Cylinders (P.) Ltd. [1998] 93 Comp. Cas. 532]
The expression ‘impracticable’ as used under section 98 should be interpreted in a reasonable manner and from the common sense point of view, e.g., where there was only one surviving member. In Indian Spinning Mills Ltd. vs. His Excellency, the King of Nepal AIR 1953 Cal. 355, a person was appointed as a director of the company but he did not hold the qualification shares. Some directors transferred their shares to him. A group of shareholders alleged that this was invalid. Held, it was impracticable to hold a meeting in these circumstances.

Question 29

Participation of directors through video conferencing or other audio-visual means [Section 173(2)]

Answer 29

The participation of directors in a meeting of the Board may be either in person or through video conferencing or other audio-visual means, as may be prescribed, which are capable of recording and recognising the participation of the directors and of recording and storing the proceedings of such meetings along with date and time.
The Central Government may, by notification, specify such matters which shall not be dealt with in a meeting through video conferencing or other audio-visual means.
However, where there is a quorum in a meeting through the physical presence of directors, any other director may participate through video conferencing or other audio-visual means in such meeting on any matter so specified by the Central Government.
SS- 1, in this regard, provides that Directors participating through Electronic Mode in a Meeting shall be counted for the purpose of Quorum unless they are to be excluded for any items of business under the provisions of the Act or any other law.
Any Director participating through Electronic Mode in respect of restricted items with the express permission of the Chairman shall, however, neither be entitled to vote nor be counted for the purpose of Quorum in respect of such restricted items.

Question 30

Passing of Resolutions by Circulation [Section 175]

Answer 30

At times it may not be possible to organise and hold a Board’s/Committee of the Board’s meeting or an urgent decision may be required or to save on the expenses in holding a Board’s/Committee’s meeting, a resolution(s) may be got passed by circulating the same among the directors/members of the Committee. A resolution passed by circulation to be valid must satisfy the provisions of section 175. Section 175, in this regard, provides as follows :
No resolution shall be deemed to have been duly passed by the Board or by a committee thereof by circulation, unless:
(i) The resolution has been circulated in draft, together with the necessary papers, if any, to all the directors, or members of the committee, as the case may be, at their addresses registered with the company in India by hand delivery or by post or by courier, or through such electronic means as may be prescribed; and
(ii) has been approved by a majority of the directors or members, who are entitled to vote on the resolution.
However, where not less than one-third of the total number of directors of the company for the time being require that any resolution under circulation must be decided at a meeting, the chairperson shall put the resolution to be decided at a meeting of the Board [Sub-section (1)].

Question 31

Passing of resolutions by postal ballot

Answer 31

[Section 110 read along with Rule 22 of the Companies (Management and Administration) Rules, 2014 as amended by Amendment Rules, 2016]
Section 110 allows casting of votes by a member through postal ballot in certain cases and subject to certain conditions. Voting by postal ballot means voting by post or through any electronic mode [Section 2(65)]. The provisions of Section 110 with respect to voting by postal ballot are as follows:
Notwithstanding anything contained in this Act, a company—
(a) shall, in respect of such items of business as the Central Government may, by notification, declare to be transacted only by means of postal ballot; and
(b) may, in respect of any item of business (other than ordinary business and any business in respect of which directors or auditors have a right to be heard at any meeting) transact by means of postal ballot, in such manner as may be prescribed, instead of transacting such business at a general meeting.

Question 32

Procedure to be followed

Answer 32

Where a company decides to pass any resolution by resorting to postal ballot, it shall follow the following procedure:
(1) It shall send a notice to all the shareholders, along with a draft resolution explaining the reasons therefor, and requesting them to send their assent or dissent in writing on a postal ballot (postal ballot means voting by post or through electronic means) within a period of thirty days from the date of dispatch of the notice.
(2) The notice shall be sent either (a) by Registered Post or speed post, or (b) through electronic means like registered ‘e-mail id’, or (c) through courier service for facilitating the communication of the assent or dissent of the shareholder to the resolution within the said period of thirty days.
(3) An advertisement containing the prescribed information shall be published in a leading English newspaper of the district and having wide circulation and in one principal vernacular newspaper circulating in the district and having wide circulation about having dispatched the ballot papers.
(4) The notice of the postal ballot shall also be placed on the website of the company forthwith after the notice is sent to the members and such notice shall remain on such website till the last date for receipt of the postal ballots from the members.
(5) The Board of directors shall appoint one scrutinizer, who is not in employ- ment of the company and who, in the opinion of the Board can conduct the postal ballot voting process in a fair and transparent manner.
(6) The scrutinizer shall submit his report as soon as possible after the last date of receipt of postal ballots but not later than seven days thereof.

Question 33

List of items that must be transacted through postal ballot

Answer 33

The following items of business shall be transacted only by means of voting through a postal ballot-
(a) alteration of the objects clause of the memorandum and in the case of the company in existence immediately before the commencement of the Act, alteration of the main objects of the memorandum;
(b) alteration of articles of association in relation to insertion or removal of provisions which, under sub-section (68) of section 2, are required to be included in the articles of a company in order to constitute it a private company;
(c) change in place of registered office outside the local limits of any city, town or village as specified in sub-section (5) of section 12;
(d) change in objects for which a company has raised money from public through prospectus and still has any unutilized amount out of the money so raised under sub-section (8) of section 13;
(e) issue of shares with differential rights as to voting or dividend or otherwise under sub-clause (ii) of clause (a) of section 43;
(f) variation in the rights attached to a class of shares or debentures or other securities as specified under section 48;
(g) buy-back of shares by a company under sub-section (1) of section 68;
(h) election of a director under section 151 of the Act;
(i) sale of the whole or substantially the whole of an undertaking of a company as specified under sub-clause (a) of sub-section (1) of section 180;
(j) giving loans or extending guarantee or providing security in excess of the limit specified under sub-section (3) of section 186:

Question 34

Circulation of members resolutions [Section 111]

Answer 34

Circulation of members resolutions [Section 111]
When some members of a company want (i) to propose a resolution at the company’s next annual general meeting; or (ii) desire to circulate to members any statement with respect to the matter referred to in any proposed resolution or any business to be dealt with at any general meeting, the Act allows them to use the administrative machinery of the company for the purpose.

If the requisite number of members make a requisition as aforesaid, the company
shall be bound to :
(i) give a notice of the resolution intended to be moved at the next AGM;
(ii) circulate the statement among the members entitled to notice of any general meeting.
However, before the obligation of the company, in respect of the above may arise, the following conditions shall have to be satisfied:
(1) The requisition must have been signed by such number of members, as required in section 100 (See under discussion on EGM)
(2) The requisition must have been deposited at the registered office of the company :
(a) at least six weeks before the meeting in case of a requisition requiring notice of a resolution. Where an annual general meeting is called on a date within six weeks after the copy has been deposited, it shall be deemed to have been deposited in time; and
(b) at least two weeks before the meeting in case of any other requisition.
(3) The requisitionists must have deposited with the company a sum reasonably
sufficient to meet the expenses of the requisition.

Question 35

Ordinary resolution [Section 114(1)]

Answer 35

When a motion is passed by simple majority of the members voting at a general meeting, it is said to have been passed by an ordinary resolution. In other words, votes cast in favour of the resolution (including the casting vote, if any, of the chairman) are more than the votes cast against the resolution, if any.
All matters which are not required by the Companies Act or the company’s articles to be done by a special resolution can be done by means of an ordinary resolution. Some of the cases in which only ordinary resolution is required are : alteration of authorised capital, declaration of dividend, appointment of auditors and fixation of their remuneration, election of directors.

Question 36

Special resolution

Answer 36

According to section 114(2), a resolution is a special resolution when—
(a) the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members;
(b) the notice required under the Companies Act (i.e., at least 21 clear days’ notice) has been duly given of the general meeting;
(c) the votes cast in favour of the resolution (whether by show of hands or on poll), by members present in person or by proxy are not less than 3 times the number of votes, if any, cast against the resolution. Abstentions, if any, are not to be taken into account.
In construing whether a resolution is passed by three-fourths majority present and voting, what is to be taken into consideration in calculating majority is not number of persons present and voting, but number of valid votes polled in such meeting which includes only votes which are indicative of mind of voters for or against resolution - Kirloskar Electric Co. Ltd., In re [2003] 43 SCL 186 (Kar.).
Voting for or against motion subject to conditions stipulated in vote is no voting in the eyes of law - Kirloskar Electric Co. Ltd., In re [2003] 43 SCL 186 (Kar.).
Some of the matters for which special resolution is required to be passed are :
(1) to alter objects clause of memorandum;
(2) to change the registered office of the company from one State to another;
(3) to reduce share capital of the company; and
(4) to alter Articles of Association.

Question 37

Resolutions requiring special notice

Answer 37

Section 115 deals with resolutions requiring special notice. Where, by any provision contained in this Act or in the articles of a company, special notice is required of any resolution, notice of the intention to move such resolution shall be given to the company by such number of members holding not less than one per cent of total voting power or holding shares on which such aggregate sum not less than five lakh rupees, as may be prescribed, has been paid-up. The company, in turn, shall give its
members notice of the resolution in such manner as may be prescribed.
Rule 23 of the Companies (Management and Administration) Rules, 201411, in this regard, provide as follows:
(i) The notice shall be sent by members to the company not earlier than three months but at least fourteen days before the date of the meeting at which the resolution is to be moved, exclusive of the day on which the notice is given and the day of the meeting.
(ii) The company shall immediately after receipt of the notice, give its members notice of the resolution at least seven days before the meeting, exclusive of the day of dispatch of notice and day of the meeting, in the same manner as it gives notice of any general meetings.
(iii) Where it is not practicable to give the notice in the same manner as it gives notice of any general meetings, the notice shall be published in English language in English newspaper and in vernacular language in a vernacular newspaper, both having wide circulation in the State where the registered office of the Company is situated and such notice shall also be posted on the website, if any, of the Company.
(iv) The notice shall be published at least seven days before the meeting, exclusive of the day of publication of the notice and day of the meeting.
Special notice is required to move, besides the resolution mentioned in the Articles, the following resolutions:
(1) a resolution appointing an auditor other than the retiring one [Section 140];
(2) a resolution purporting to remove a director before the expiry of his period of office [Section 169]; and
(3) a resolution to appoint another director in place of the removed director [Section 169].

Question 38

Proxy (Section 105)*

Answer 38

Meaning - A proxy is a person, being a representative of a shareholder at a meeting of the company who may be described as his agent to carry out which the shareholder has himself decided upon - Lord Hansworth in Cousins v. International Brick Co. Ltd. [1931].
Appointment of a Proxy - Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person as a proxy to attend and vote at the meeting on his behalf.
Notice of the meeting to mention right of a member to appoint proxy [Section 105(2)]:
In every notice calling a meeting of a company which has a share capital or the articles of which permit voting by proxy, there must appear with reasonable prominence :
(i) that a member entitled to attend and vote is entitled to appoint a proxy or proxies; and
(ii) that a proxy need not be a member.
However, as per Rule 19 of the Companies (Management and Administration) Rules, 2014 a member of a company registered under section 8 (i.e. association not for profit) shall not be entitled to appoint any other person as his proxy unless such other person is also a member of such company.
If default is made in complying with section 105(2) as regards any meeting, every officer of the company who is in default shall be liable to a penalty of five thousand rupees [sub-section (3)].
The appointment of a proxy must be made by a written instrument signed by the appointer or his duly authorised attorney in writing. If the appointer is a body corporate, then it must be under its seal or be signed by an officer or an attorney duly authorised by it. [Section 105(6)].
According to the proviso to sub-section (1) of section 105, unless articles otherwise provide a member of a company having no share capital cannot appoint a proxy.
Again, the Central Government may prescribe a class or classes of companies whose members shall not be entitled to appoint another person as a proxy.

Question 39

Meeting to be properly convened

Answer 39

This means that :
(i) the meeting must have been convened by the proper authority. The proper authority to convene the meeting is the Board of directors, shareholders or Tribunal; and
(ii) proper and adequate notice must have been given to all those entitled to attend.

Question 40

SS-2, in this regard, contains the following provisions:

Answer 40

1. Notice shall be sent by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means.
2. In case the Notice and accompanying documents are given by e-mail, these shall be sent at the Members’ e-mail addresses, registered with the company or provided by the depository, in the manner prescribed under the Act.
   In case of the Directors, Auditors, Secretarial Auditors and others, if any, the Notice and accompanying documents shall be sent at the e-mail addresses provided by them to the company, if being sent by electronic means.
3. Notice shall be sent to Members by registered post or speed post or courier or e-mail and not by ordinary post in the following cases:
   (a) if the company provides the facility of e-voting;
   (b) if the item of business is being transacted through postal ballot;
4. If a Member requests for delivery of Notice through a particular mode, other than one of those listed above, he shall pay such fees as may be determined by the company in its Annual General Meeting and the Notice shall be sent to him in such mode.
5. In case Meeting is called by the requisitionists themselves where the Board had not proceeded to call the Meeting, the Notice shall be sent to Members by registered post or speed post or email.
6. In case of companies having a website, the Notice shall be hosted on the website also.

Question 41

Publication of a notice in a newspaper - whether obligatory?

Answer 41

It is not obligatory to advertise notice in the newspapers. However, as a matter of abundant precaution, the company may advertise in the newspapers to avoid objection from such of the shareholders as reside outside India and who acciden- tally may not receive the notices served through post. Publication of a notice in newspaper is not a substitute for the requirement of section 20(2) in respect of sending a notice to every member.

Question 42

The notice must contain the following particulars :

Answer 42

1. Place, day and time of holding a general meeting— Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be 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 situate* [Section 96(2)].
   However, annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance5.
   Further, the Central Government may exempt any class of companies from the provisions of this sub-section subject to such conditions as it may impose.
   A meeting, other than the AGM, does not appear to be subject to the aforesaid provision.
   However, a Meeting called by the requisitionists shall be 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.
   SS-2 further requires the Notice to contain complete particulars of the venue of the Meeting including route map and prominent land mark for easy location. In case of companies having a website, the route map shall be hosted along with the Notice on the website.
2. Agenda - The notice should contain a statement of the business to be transacted at the meeting (called agenda). If special business is to be transacted, an explanatory statement** shall be annexed to the notice calling such meeting, namely:—
   The nature of concern or interest, financial or otherwise, if any, of—
   (i) every director and the manager, if any;
   (ii) every other key managerial personnel; and
   (iii) relatives of the persons mentioned in (i) and (ii) above.
   The statement should also contain any other information and facts that may enable members to understand the meaning, scope and implications of the items of business and to take decision thereon.
   Where any item of special business to be transacted at a meeting of the company relates to or affects any other company, the extent of shareholding interest in that other company of every promoter, director, manager, if any, and of every other key managerial personnel of the first mentioned company shall, if the extent of such shareholding is not less than two per cent of the paid-up share capital of that company, also be set out in the statement.
   SS- 2 provides that no items of business other than those specified in the Notice and those specifically permitted under the Act shall be taken up at the Meeting.
   A Resolution shall be valid only if it is passed in respect of an item of business contained in the Notice convening the Meeting or it is specifically permitted under the Act.
   Items specifically permitted under the Act which may be taken up for consideration at the Meeting are:
   (a) Proposed Resolutions, the notice of which has been given by Members;
   (b) Resolutions requiring special notice, if received with the intention to move;
   (c) Candidature for Directorship, if any such notice has been received.
   Where special notice is required of any Resolution and notice of the intention to move such Resolution is received by the company from the prescribed number of Members, such item of business shall be placed for consideration at the Meeting after giving Notice of the Resolution to Members in the manner prescribed under the Act.
   Any amendment to the Notice, including the addition of any item of business, can be made provided the Notice of amendment is given to all persons entitled to receive the Notice of the Meeting at least twenty-one clear days before the Meeting.
3. Documents to accompany Notice
   SS-2 requires that the Notice of the meeting shall be accompanied, by an attendance slip and a Proxy form with clear instructions for filling, stamping, signing and/or depositing the Proxy form.
4. Right of a member to appoint proxy - The notice should also state that a member is entitled to appoint a proxy who need not be a member [Section 105(2)].
   Query: Can a member who has already cast his vote through remote e-voting appoint a proxy?
   Ans: The Clarification issued by ICSI vide Press Release dated 21.7.2015 (updated as on 26.8.2015), is as follows:
   “Yes, a member who has already cast his vote through remote e-voting can appoint a
   proxy to attend the Meeting instead of himself, but he cannot cast his vote”.
   Documents accompanying the notice - The following documents should be annexed to the notice of the meeting :
   (i) For AGM - audited financial statement of accounts, directors’ and auditors’ reports, proxy form, etc.; and
   (ii) For EGM - explanatory statement, proxy form, etc.
   Where any item of business refers to any document, which is to be considered at the meeting, the time and place where such document can be inspected shall be specified in the Explanatory statement [Section 101(3)].
   Postponement or Cancellation of the Meeting
   SS- 2 clarifies that a Meeting convened upon due Notice shall not be postponed or cancelled.
   If, for reasons beyond the control of the Board, a Meeting cannot be held on the date originally fixed, the Board may reconvene the Meeting, to transact the same business as specified in the original Notice, after giving not less than three days intimation to the Members. The intimation shall be either sent individually in the prescribed manner or published in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and in an English newspaper in English language, both having a wide circulation in that district.

Question 43

Voting rights of equity shareholders

Answer 43

• Every holder of equity shares carrying voting rights shall have a right to vote on every resolution placed before the company [Section 47(1)*].
  Right of an equity shareholder to vote cannot be prohibited on the ground that he has not held his shares for any specified period before the meeting or on any other ground (Section 106) - Ananthalakshmi v. H.I. & F. Trust (1951). The provision in the Articles of a company that only those shareholders would be entitled to vote whose names have been there on the Register for two months before the date of the meeting was held to be in contravention of the Act.
  The only grounds on which the right of an equity shareholder to vote may be excluded are: (i) non-payment of calls by a member; (ii) non-payment of other sums due against a member; (iii) where the company has exercised the right of lien on his shares [Section 106]**.

Question 44

Voting rights of preference shareholders [Section 47(2)*]

Answer 44

Preference share- holders have a right to vote only on resolutions placed before the company:
(i) which directly affect the rights attached to his preference shares;
(ii) any resolution for the winding up of the company;
(iii) any resolution for the repayment or reduction of its equity or preference share capital; and
(iv) where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.
Voting rights of a preference shareholder shall, on a poll, shall be in proportion to his share in the paid-up preference share capital of the company.

Question 45

Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended by the Companies (Management & Administration) Rules, 2015 and 2016 in this regard, provides as follows :

Answer 45

1. Companies having its equity shares listed on a recognised stock exchange or a company having not less than one thousand members, shall provide to its members facility to exercise their right to vote on resolutions proposed to be considered at general meetings by electronic means.
   However, a Nidhi company and an institutional investor is not required to provide the facility to vote by electronic means.
2. The aforesaid rule shall, however, be not applicable to: (i) small and medium enterprises, namely, companies whose post issue face value capital is up to Rs. 25 crores and whose shares are listed on SME Exchange. (ii) Companies listed on the Institutional Trading Platform

Question 46

Day, hour and place of AGM*

Answer 46

Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be 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 situate [Section 96(2)].
However, annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance1
Further, the Central Government may exempt any class of companies from the provisions of this sub-section subject to such conditions as it may impose.

Question 47

REPORT ON ANNUAL GENERAL MEETING (SECTION 121)

Answer 47

(1) Every listed public company shall prepare in the prescribed manner a report on each annual general meeting including the confirmation to the effect that the meeting was convened, held and conducted as per the provisions of this Act and the rules made thereunder.
(2) The company shall file with the Registrar a copy of the report referred to in sub-section (1) within thirty days of the conclusion of the annual general meeting with such fees as may be prescribed, or with such additional fees as
may be prescribed.
(3) If the company fails to file the report under sub-section (2) before the expiry of the period specified therein, such company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees and every officer of the company who is in default shall be liable to a penalty which shall not be less than twenty-five thousand rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of one lakh rupees [Sub- section (3) inserted by Companies (Amendment) Act, 2019]

Question 48

Class meetings

Answer 48

Section 48 provides that where the share capital of a company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the issued shares of that class—
(a) if provision with respect to such variation is contained in the memorandum or articles of the company; or
(b) in the absence of any such provision in the memorandum or articles, if such variation is not prohibited by the terms of issue of the shares of that class.
In case variation by one class of shareholders affects the rights of any other class of shareholders, the consent of three-fourths of such other class of shareholders shall also be obtained.
Though the section as worded applies only to cases where the share capital of a company is divided into different classes of shares, there is nothing in it to prohibit the application of the principle to cases also of variation of rights where the share capital originally consisted of one class of shares and the company wanted to vary the rights and wanted to follow the procedure laid down in the section.
It may be noted that the variation referred to is variation to the prejudice of any class of shareholders, and not any variation adding to or enhancing rights of any class. It is only where a variation involves the curtailment of the rights of any class or classes of shareholders, the consent or sanction of such class or classes will be necessary.

Question 49

Effect of shorter notice

Answer 49

Any resolution passed at such meeting shall not be effective unless consent is given in writing or by electronic mode—
(i) in the case of an annual general meeting, by not less than ninety-five per cent of the members entitled to vote thereat; and (ii) in the case of any other general meeting, by members of the company—
(a) holding, if the company has a share capital, majority in number of members entitled to vote and who represent not less than ninety-five per cent of such part of the paid-up share capital of the company as gives a right to vote at the meeting; or
(b) having, if the company has no share capital, not less than ninety-five per cent of the total voting power exercisable at that meeting:
But, where any member of a company is entitled to vote only on some resolution or resolutions to be moved at a meeting and not on the others, those members shall be taken into account for the purposes of this sub-section in respect of the former resolution or resolutions and not in respect of the latter.
A person who is present and who votes at the meeting, will not be entitled to challenge the resolution on the ground of an invalidity in the notice - In re, British Sugar Refining Co. [1857] 3 K & J 408.

Question 50

Role and Powers of chairman

Answer 50

(a) To maintain order and decorum - The chairman has the power to maintain order and decorum at a meeting, i.e., to prevent the use of improper language and disorderly behaviour of members. If his directions are not obeyed, he may adjourn the meeting or have the offending member(s) expelled.
(b) To give ruling on points of order - Sometimes members raise points of order, i.e., questions relating to rules and regulations governing the meeting. The chairman has the power to give a ruling on the interpretation of the rules and his ruling will be binding on all members.
(c) To decide priority of speakers - When more than one member express their desire to speak on the motion, the chairman has the power to decide the priority in which the members will be allowed to speak.
(d) To maintain relevancy and order in debate - The Chairman has the power to stop discussion on a motion when it has continued for a sufficiently long time and discussion seems to be endless or when the discussion becomes irrele- vant, that is, when it is not within the scope of the meeting or the motion under discussion.
(e) To exercise a casting vote - Ordinarily, a chairman has only a deliberative vote, i.e., the right to cast a vote as a member. But if the rules expressly allow, the chairman can cast a second vote, known as casting vote, to break a tie, i.e., equality of affirmative and negative votes. The Articles of a company usually confer this right on the chairman of a company meeting.

Question 51

Duties of chairman

Answer 51

(a) To see that the meeting is properly convened and duly constituted.
(b) To see that the proceedings of the meeting are conducted according to rules and the business is discussed in the order set out in the agenda.
(c) The chairman must see that no discussion is allowed unless there is a specific motion before the meeting, properly moved and seconded and that the motion is within the scope of the meeting.
(d) To maintain order and decorum in the meeting.
(e) To see that all members get equal opportunity to express their views. If
necessary, he should fix time limit for speakers.
(f) He should see that the sense of the meeting is properly ascertained on each and every motion. He should put all motions and amendments to vote in the manner provided in the rules, supervise the counting of votes to ensure correct assessment of the opinion and declare the result of voting.
(g) If poll is demanded, to see that the poll is taken according to the provisions of the Act.
(h) To exercise his casting vote bona fide in the interest of the company.
(i) To exercise judicially his power of adjournment.

Question 52

Revocation of proxy

Answer 52

The death of a shareholder who has appointed a proxy, in the absence of provision in the articles, revokes the authority of the proxy, but articles usually provide that a proxy shall be valid notwithstanding the previous death or insanity of, or revocation by, the person giving it, unless the company has received notice of such death, insanity or revocation, as the case may be. Such a provision is obviously necessary in order to ensure that resolutions apparently validly passed at an apparently valid meeting were indeed validly passed - Palmer’s Company Law, 24th Edition, Para 56-13.

Question 53

Meeting beyond Statutory Time

Answer 53

In Hungerford Investment Trust Ltd. v. Turner Morrison & Co. Ltd. ILR [1972] Cal., the Court held that a meeting held beyond the time cannot be said to be void or illegal. If the Central Government (now Tribunal) does not extend the date of holding the AGM under section 97, the directors shall be subjected to increasing penalty but the meeting shall be a valid meeting. Otherwise, the position in law would become impossible.
The Calcutta High Court in Ruby General Hospital Ltd. v. Sajal Dutta [2012] 112 SCL 620 has held that Court has the power to condone delay in holding AGM on a date beyond statutory limit of section 166 (now section 96) as non-adherence to that is not that fatal that Court would not be able to condone.
The Kerala High Court in case of T.V. Mathew v. Nadukkara Agro Processing Co. Ltd. [2002] 36 SCL 664, has held that failure to convene annual general body meeting is a continuing default for which consequences are provided and in such circum- stances what is required to be done is to direct company to convene AGM at earliest.
Voting Rights in respect of meeting held after the prescribed time limit. Voting rights of members shall be determined as at the date of the meeting and not as they would have been if the meeting had been held within the prescribed time - Musselwhite v. Musselwhite & Sons Ltd. [1962] 1 ALL ER 201.