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Unit 12: Company Meetings and Proceedings

If the board of directors does not/fails to call the meeting as aforesaid (i.e., at least 21 days notice Notes
fixing the date of the meeting within 45 days of the deposit of a valid requisition), the meeting
may be called by the requisitionists themselves: (a) In case of a company having share capital, by
one or more requisitionists as represent: (i) a majority in value of the paid-up share capital held
by all the requisitionists; or (ii) at least 1/10th of the paid-up share capital carrying voting rights
in respect of that matter, whichever is less; or (b) in case of a company not having a share capital,
by one or more requisitionists who represent at least 1/10th of the total voting power of the
company in regard to the matter of the requisition.
Where the Articles, in accordance with the provisions of s.180, provide that members who have
not paid calls on their shares would not be entitled to vote, then they cannot requisition a
meeting, nor vote at it and if they do so, the proceedings would be invalid.

The requisitioned meeting must be held within 3 months of the date of the deposit of the
requisition. Further, where two or more persons hold any shares or interest in a company
jointly, a requisition, or a notice calling a meeting, signed by one or only some of them shall, for
the purposes of this section, have the same force and effect as if it had been signed by all of them.
Any reasonable expenses incurred by the requisitionists, as aforesaid, shall be repaid to them by
the company and the same shall be recouped from directors at fault.
A meeting by the requisitionists must be held in the same manner as nearly as possible, in which
the meetings are to be called by the board of directors. However, where the registered office is
not made available to them for holding the meeting, they may hold the meeting elsewhere
[R. Chettair vs. M. Chettair (1951) 21 Comp. Cas. 93].

Powers of the Company Law Board (s.186).

If for any reason it is impracticable to call a meeting of the company, other than an AGM, the
Company Law Board may direct the calling of the meeting: (a) on its own motion; (b) on an
application of any director; (c) on an application of any member entitled to vote at that meeting.
For the aforesaid meeting, the Company Law Board 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 proxy shall be deemed to constitute a meeting.

Example: Superclean Industries Pvt. Ltd. is a company in which there are three
shareholders and all of them are directors of the company. Mr. Superman holds 60 percent of the
paid up share capital while the balance 40 percent of shares is held equally by the remaining two
directors. Because of some rift among them, the two directors holding 40 percent share capital
have aligned and started preventing the holding of any meetings of the company. The articles of
the company provide for a minimum of two directors/members as quorum for board meetings
as well as general meetings.
Mr. Superman is a majority shareholder, but he is helpless, as no meeting can be held because of
no quorum. He would apply to CLB under s. 186 for convening of the general meeting. The CLB,
if satisfied, will order a meeting to be held with the presence of one member as sufficient
quorum. Mr. Superman, being the majority shareholder is entitled to exercise his statutory right
to participate in the decision-making process, which cannot be frustrated by the quorum
requirement. [Opera Photography Ltd. Re, 1989 B CLC 763 CLD]

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