Page 195 - DCOM106_COMPANY_LAW

Company Law

Notes were submitted and ending with a day which must not precede the day of the meeting by
more than 6 months; or 6 months and the extension granted by the Registrar, i.e., a
maximum period of 9 months.
7. The company must give twenty-one days notice to all the members of the company and
the auditor. A shorter notice may be held valid if consent is accorded to, by all the members
entitled to vote at the meeting (s.171). Such a consent may be given before the meeting is
held or after the resolutions are passed. A copy of Directors’ report on the company’s
position for the year together with copy of the audited accounts and auditors’ report must
accompany the notice. Also a proxy form must be attached with the notice, on which it
shall be specifically mentioned that a member entitled to vote is entitled to appoint proxy,
and such proxy need not be a member of the company.

The notice must specify the place and the day and hour of the meeting and shall contain a
statement of the business to be transacted thereat [s.172(1)].
If the time of holding the meeting and other essential particulars required by the section
are not specified in the notice, the meeting will be invalid and all resolutions passed
thereat will be of no effect.

The notice must be given to every member, legal representative of a deceased member or
assignee of an insolvent member and to auditor or auditors [s.172(2)].
8. If default is made in holding the meeting, the Central Government may, on the application
of any member of the company, call or direct the calling of the meeting. If the company
fails to hold the meeting either originally or when directed to do so by the Central
Government, then the company and every officer of the company who is in default shall
be punishable with fine up to 50,000; and in the case of a continuing default, with a
further fine of 2500 per day during the continuance of default (s.168).

12.2.1 Certain Typical Issues in Respect of AGM

1. Whether AGM can be called on a Public Holiday: Section 166(2), inter alia, provided that,
every AGM shall be called on a day that is not a public holiday. The Department of
Company Affairs has opined that, it is a mandatory provision.
However, Bank holidays (for purposes of closing) though declared as public holidays
under the Negotiable Instruments Act, 1881 shall not be treated as public holidays for the
aforesaid purpose. Thus, 31st March and 30th Sept. shall not be considered as public holidays.
In the following cases, however, AGM may be held on a public holiday: (i) Section 2(38)
provides that, if any day is declared by the Central Government to be a public holiday
after the issue of the notice convening such a meeting, it shall not be deemed to be a public
holiday in relation to the meeting. (ii) Where a public company or its subsidiary has by its
Articles fixed the time of its AGM and the day turns out to be a public holiday [Proviso (a)
to s.166(2)]. (iii) Where a public company or its subsidiary has, by a resolution passed in
one AGM fixed the time for its subsequent AGM and the day turns out to be a public
holiday [Proviso (a) to s.166(2)]. (iv) A private company which is not a subsidiary of a
public company may also [like a public company or its subsidiary under (ii) and (iii)
above] by a resolution agreed to all the members thereof fix the time as well as the place
of its AGM and the same shall be valid if the day happens to be a public holiday [Proviso
(b) to s.166(2)]. (v) A company to whom a license is granted under s. 25 is exempted from
the provisions of s.166(2). (vi) Where the AGM is adjourned because of lack of quorum, it
is to be held on the same day in the next week at the same time and place (s.174). In case the
day comes to be accidentally a public holiday, it shall not amount to contravention of
s.166(2).

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