C.A.No.108/CLB/MB/2013 in CP NO.3l (MUM)/2013
Decided on:11th December, 2013
Companies Act, 1956 – Section 169 – holding of Extra-Ordinary General Meeting (EOGM) -Company failing to hold EOGM inspite of directions – whether CLB can order the holding of the EOGM – Held, Yes.
Brief Facts:
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This is the second round of litigation before the CLB. In the first round, Mumbai branch of the CLB rejected the Petitioner’s application for holding EOGM of the company and instead it directed the company to hold the EOGM.
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The Petitioners appealed to the High Court which held that they can move to the CLB if the directions to hold the meeting were not followed by the company.
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The Respondent Company on receipt of a requisition under Section 169(1) did not hold an EOGM within the period contemplated under sub-clause (vi) of Section 169 of the Companies Act, 1956 and even despite the direction contained in the above mentioned orders.
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Therefore, the Petitioner moved to the CLB again. The contention of the respondent was that in the absence of a specific prayer to call, convene and hold an EOGM, CLB cannot order for holding of such a meeting.
Decision: Application allowed.
Reason:
After considering the facts and circumstances and the rival submissions and the widest amplitude of powers of the Company Law Board to grant relief under Section 186,402 and 403 of the Companies Act, 1956 and placing reliance on Sanjay Gambhir & Ors v.D.D. industries Ltd & Ors 199 (2013) DLT144, in view of the impasse created by the Company and the facts and circumstances under which the EOGM of the Company has not yet been called, held and conducted to consider the said resolution mentioned in the requisition by the Petitioners under Section 169(1) it is necessary that the powers under Section 186(1) read with Section 402 and 403 of the Companies Act 1956 are exercised.
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Therefore, Respondent No. 1 Company was directed to call, convene and hold EOGM on 11th January 2014 at 10.30 AM at the Conference Hall of any five star hotel in Mumbai after sending advance written notice of this order and of such venue to all shareholders of the company including the Petitioners within a week from the date of this order.
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The said EOGM shall be held under the supervision of an Observer appointed by this Board.