-n4

Fundamentals ofc`ompany law 305

H¥gettingtogetherof`twoormore
__ JP , - , +, L|_ ____. `r. . '' \, \,I IJ|\JJ I
FT-fu a lawful purpose where e~veryone's object will be same. _ __ _ -', -, +J
mi I- _ JEL _,
in,as fu as the compa-ny matter is concerned, a
meeting
-_ sigiiities
---- `-.``,`)
oT foming together of at least a quoriim of member(s)
\ _ _ --`--'```,`,`\u'
decision on any concerned business transaction. Dent;i`r
I--_-_-_---__ - ___ I, r
a company meeting is a meeting which is held
by the
___---`,I +\1-
directors,i creditors or by any other parties whose
r ___ _._`,
- ,' |t\+J-
ars involved wiith the company. arid which is held I.or a
purpose i,e, bus.iness transaction.

tion of a meeting by one member:

From the above mentioned definition it is clear to us that to
_ _ _-_-_`-. L`, L4LJ I.J|(.|L LIJ

gri-tune a valid meeting there should be at least tw:o members. brit

n rmain exceptional situations one member can constitute a
I- The situations are:
(i) In case of 91.a§~ST_..TP££tjapj±_.edy._9.n.e~.^mfmharfun
-__ _- _-=T=_.-_ ------
- ____-__`_-_+-. __--.` ._`,-_ __ ` -~'--'t±J'-rferwi===

constitute a meeting es he holds,all the shares of that

-* ~- ~r <ra~ pr_¥ -qaL--~L=±±=

particular class;
(ii)
#¥i¥E;¥6_::-:a:rsaonnyorrie,Syoi:-t:-:-,]fiii.f,i:e-c;umrpm.I::e:h;.:
cJinmitteemeetingthesaidonen]quber_isLgr]9noh;
?rfeh=t-cgiv i

•WHt€iE lhie court cal ls an_arm.uLaLgejLe_rallpe4iLELg

tjii)
-I...I__ __ _1. ,\ ,...
¥nderatg2`±_§ I and directs that one members shall
----..,-.. `m__~ uqu= :.i, ==L:
be sufficie-rifi6
j±i±±±!|C|e_ni±9_£gELS£!±!±±gapj±]±a!j{j~trng€€ ting t h e in____' a~
__ _ _1:__ I _a-
can be constituted
.Ti-u=Jj;+ `__ __ _ . . \a ,--, I .ufd_ky.9_nememJ2££9try.:

of a valid meetin
For the company purpose to constitute a valid
_ __ _'
meeting some
'```''`-".-\,|I"€j LJ\/LIIl
ities are required td b-e followed. Our companies Act.199+
I A , A ,-

_ _-_ _--'''r`-I"-J / 1,1. I ,7`1

__ I,,+,
Hlrife different provisions regarding constitution of` a valid
•Eife Basi.c?lly. sections 8i to 89 and schedule-I of our Act
mFidEs provlsions for holding ot` general meeting of a company.
Th--r"' ^^.. ,`l__ _I ,
L-------.. "--Lul`5 \71 Cl luIJIL/(Ill.Y.
The-penycanalsoadopt.so?neotherrulestoconductthegenc.ral
|raEling Ofofthe
thecomDanv
company b\;
b}; Its
its artif`lpc
artii`Ies hilt
but thac`£] ,„.L`. ._ ..,. + __ , I
these-i.-I;rc"s';n'l:;tsn't[]'t`]b"t-; {
_ _ _ ---, \, ,

to tlle pro.vi``ions ot` the Act. However. a piivatc

_ __ ''_ '`'., ,+ rJ||YCJLl
is free_ to
i_ _ ,
make its ovvn rules by its articles for the conduct
meetings.
 •,0

310 Company Meeting

Presence of quorum is another imp'ortant condition for

#Jj`aii"do,:er..:
a -va-lid meeting. Quorum simply means the minimum number of
members required to hold a meeting.

q- Orum fior general meeting: Ordinaril

However if the a les otherwise
Pr,Vate £9quardrfees£_J±~Fasp±drel9fmerbe_ri_a
999~S_PO"tex~9rfe_e_dsj¥!vyQ
ffia-m6€r-s and if such number exceeds six, three members, and
the articles fix the

shall be uorum.
Ep±±bLjfmfgp±pgp±[jj{gj±£p±E£±±£±sg±a[±±±P ha-aa.i-a-.i-o.o.-+

[S. 85 (2) (b)I

ulation 52 of sch-I that no business shall

resentatthetinewhen±be_m±nfe±±±gJ2rgLCLg?_d± to transact business.

L¥i#cfa:
quorum.
two members in case of

of meeting of directors, the

Company
-i-i .-.--. £rf-. =J.-,-.-. a-`-- -a_ _

HiquEmEFEELfiEEEHEiEEfiREiH_EEEEE 6f`ifielfisifi`e=Fapefffi€idifi6Uiifilafi;
by the directors, and unless ¥6faft¥eFiviigff-tifenri-ri+bet
of directors exceeds !hr_efOt.b~e_qug_r#qu_q{shal ri;eliife-angso=~~~_+_&~~
hej;._ --,- {_ --`,.` ._.*,~_`+.``.. ~, `,,.1,, _,-` ` €`-.`-,zit€spe~`-.c._`,._
+Z=:.vi-*S, , `,.-a

Rules regarding qtiorum: There are some rules. as provided b.v

law, regarding quorum which are:

(i) P+oxy not to be cotinted: Meniblers who hape Mingivqp

fulfill a quorum. -The pesence of a pray is.ngLenE dr_de
purposeofaquorumeventhouchtheymigivvctcinsornecars43J.

(ii) Joint holding: Since for joint holding there is one vcte432 so.
jointholdersofsharesaretreatedasonemember`forthepurposeofa
quorum. .

(iii).-Representative as member: :A cbmpany+ which is a idem-ber of

another compapy may authorise any of its officials or any other
person to act as 'its rebreschtative. In such a case,-the duly appointed

4:`° Henderson's Case, [|894] 21 R. 674, Per Lord President Robertson.

431 Beg-89, sch-I.
432 A.M. Harris Ltd, Petitioners,1956 S.C`. 207.
 Fundamentals of company law 311
~

TCFTEsut]lliwiE is considered as a member and shall be counted for the

puplu€ Ofquonlm. [S. 86] \

g±g±rm. to be effective: The quorum must be effective quorum.,

ife±±±beife mc]nbers must be fit to take part in the business to be
|`R . ,ue

at the meetin84-33

de member not to constitute a meeting: Since the word

=q.acting" means coming together of more than one person. one
fflqum. can't constitrfe a meetin8434, even where he attends in more
dl-lt one Capacity or holds proxies for other persons435.

-.ows.. There are some exceptions to the above rule. and und.er
lhesle exceptions one person can constitute a quorum:
(a) Where one person holds all the shares ofa class;
(b) Wherc` a committee is constituted.with one member;
(c) Wh„ the meeting is called by the order of the court in
exceptional circumstances.

{vi} Absence of quorum: If within half an hour from the time fixed
ron holding a meeting of the company. a quorum is not present, it
shall stand dissolved or stand adjourned to the same day in the next
week` at the same time and place. [R-53. sch-[]

#Fd"g:'nmodL";..n:I:dmp:::;::¥[ymoere::ns¥a::,I;datatnhdee:`:eect:;nvge.o:ge:fap]fi`
ot` all the persons. He presides over the meeting. He may be an
author;`sed person. as per articles. or,. may be nominated by the
members present at the meeting.

rtypointment of the chairman: Under section 85, unless the articles

other-wise provide, the members present at the meeting may elec.t
any member as, a chairman.

" Rcerfe2. sch-I.

" Sh;rp-vs-Dawl`s. I 1876] 2 Q.B.D. 26 (C.A).
`=5 James Prain & Soils Ltd. Petitioners, I 947 S.(`. 325.
314 Company Meeting

cl.ear to us that the meeting of a company is a must. So, it bears grcal

importance.

H ,it, Elassif]cation of company meeting.

For the purpose of performing the functions, a company is
required to arrange different kinds of meetings. Generally, the
meetings of a company are classified as follows;

I. Meetings of the shareholders:

(i) statutory ineeti ngs`;
(ii) annual general meetings;
(iii) extra-ordinary meetings; and
(iv) classmeetings. .

2. Meetings of directors:
(i) meetings of the board of directors; and
(ii) meetings of committees of directors.

3. Special meetings:

(;), ::::i-:g:g:::#:uiin:`j:,dis,-i---- ` -
(iii) meetings of creditors and coritributories on the
windi`ng up of the company.

§tatutorv mtiting.
i.
[S. 83]
Stat-utory ineeting is the first meeting of the share holders pf
a public coripany. Every public company is required to arrange a
statutory meetin.g within six months from the date of its
i ncorporati on. t-
are to -hold statutory meeting: limited b

six #`#a:-:
xpc6irrfua6fia-arts-`bir5Tin
not less than one month and not more
~6fwhc-hihieaae`aami5;fi~j|s-afiiitl-edri-o
_ _ J_ -, -¥E=:=`

a general me:.tl_ng¥.;8frie-in-be`i-sgr*6f-ii=`
.;..-A-,-

=i#:e#
c"o~inb-;hj.viffi~6drh|;~E=6wi-~a; statutory meeting"`'. This is held onl,v
__------,-;I_---.--~--

life time of the company.

43`J sec. 83 ( 1 ).
 Fundamentals of company law 315

" are lot to hold a statutory meeting: Though a public limited

Eiiiiiiil-fy is required to hold statut.ory meeting but a private limited
Giiiiii-~ty is exempted to hold such a meeting44°. Besides, an
-company and a public guarantee company having no share
dy] are not to hold a statutory meeting.

ube il case of private company deemed to be a public company:

Th£ lou law exempted a private company to hold a statutory meeting. but
rfu a private company is deemed to be a public company within
¥ ri months of the date*of its incorporation, it is required to arrange a
ELfrory meeting. However. if it is deemed to be a public company
aficr six month then it is not required to do so.
REac..edy?aTy
~ordle A`noticeatofleast
the meeting
before 21is days
required to date
of the send of
to the
every member
meeting. A

&~rifrolyieportpreparedundersection83(3)isalsorequiredtosend
fitri8 With the notice. -try~
ffi the notice, the meeting which is going to be held shall be named
as `statutory meeting'. ]n the case of .q¢whz"-ts-/reds/a"', it was
aelreld that if the notice convening this meeting ddes hot name it as the
rmitory meeting, the notice shall be an impToper riotic:.
i

Chject of the meeting: PLa|Hraidescribes the object of holding the

statutory meeting as. "The object of the statutory meeting is to put
the shaiehofders of the company, at as early a date+a~s possible, in
possession of all the important facts relating to the new company442."
So, the object of the statutory meeting is to discuss the program and
prospects of the company with the shareholders.

tutory report:i To make¥the meetin-g effective and to acquaint the

S#ihoo]fd.e5ire:itohrst¥iapffi;fgt°#o#edc-sQ#inItetahs:

€:#E:£::#:£:::;:;;w::E!:E=#:#:£::::::O::;:;;i:gis:grFid,

cosec.83(12). -
WI [ig|2] I ch. 700.
44= Palmer.s Company Law. London, Stevens and Sons L,td, 1959 (20th Ed)
PP. 455-56.
 316 Company Meeting

#::::Jar:Spo°rtfsshtaa,iucto°n?a]nr:£:¥o:,]oAwC,Cn°grdp*£jct:,a:rse:C.83(2lthe •31

:}!RE¥ffingfs±e:l±_i|:=ha !9±h±,..±±£irea9Srdife.±esne£LQ£=;;.,.aJl~§h__ap

#dife
±lzffi:ia?ago _Xbr- =~~_ ~r= *al -m}<±-r>> ¥T -_dng*;

allotted;
'~Affitract of recei
ts and
the date of the

;'!_¥=
Ee.V£ELiaLys.Qf It¥9¢ 1§P.9.rf nt++ I a+` `.`+ir±±_-_-- .T+==-=±i_T-_ __ . _ --

in illRIrmmL

d) Names. addresses andL9C±£±±Pafifn£*~gflbe.directors,manager

and secretary and the changes, that`- have ceri ---- r.-,* ------- = _ _-I+T= _ _ I--_ +i

P~-_ *pp= iiBr- fi ¥# ` -£ --.- t.--==

cTffia-diTui aLntrdt_he~reaso_nstherefore;
- _ i- _-

g) _The details of arrears,

---- _ I _
if any,
---------
due from directors, the
_ _-_ ---- _ _-_ _

83_ (3)] .. -EL-.-i . +'`== --+ctr-.-r--rv-~ -.-,-.. r -,--,- grctrxpqystr-,m*a¢a=Eae&S-`1-~t=<_es,,_ --_ _ -I _ _- -

I,

Proceedings at the meeting: The proceedingstat the meq*i]!!|E±!FT

be regulated by the provisions of the be regulated by the Huriir
of the act sub-sections (7), (8) and (9) of see-83,..prvide the
proceeding of the statutory meeting which are: `

Preparation
-Pirectois andprepare
shall production
a` list of !ist~of the
showing members:
names, The Board.of
addresses. and

ocqupations of the members of the company and shall -produce it at

the comme-ncement of the statut'ory meeting. The list shall remain
open and 3SScessible to any member of the company. [secL83 (7)]

Discussion on agenda: The members of the company present at the

meeting may discuss any matter relating to the formation of the
coiiipany or arising out of` the statutory report but no resolution may
be passed of wliich notice.has not been served. TS. 83 (8)I
 FundamentalsofCompany`1aw
317

E±iiiiiit of meeting: The meeting may adjourn form time to

iferd . eduition may be passed at any such adjourned meeting
imH hi brm
¥--==L-k__ served
___--_I
rs orm served_on H ra
the matter duly. The adjourned meeting,
tlhe same powers as an original meeting. [S. 83 (9)]

of default: If default is made~in£Qm_p_lei.pg_¥it±±bexp

discussed eJLeHrfu±ir.ecto££±9±+±..e_r=4f±£iI.~P£+he_
-` -ac- `~,i .... L..Se*.-*x. ±+<® ..., I (v`se-A ±r*__ ,i-,±-II T`~=:llF'';>:X*.

who is in default, ShallbepunisharbTe~witiiiiifiE`iviirfeidi

_11 L _ .1 I,

i~3t© i-3rfu~ _i.._fiffl`_a.i.asefa ..-. _ca3grxpqf-jhlE6zs.+ce-T- ~-~ L

ousand
section `24 I . a--com
I.u.n_di¥P_bjfleiguE
be wou
is made jphailJingJkeafp£_Qryrepott_~.eriiFiFT2EL=h=
. ' `_*_ :._--_i
11-.1 L'__ J . , -

==#ani8jt'a¥#i#r:g:#.i;ng:ef:ie:faTda#:8titnhg?t:jbned|Pe¥dTP
_--------.\.*-+--,----r--.------.---_-+.
^ `` -,

*+

fling js one ot` t,]e most jmpor]tant _ __.--` -...., I,\,I ,tJIIL
-ngs =___ _Jr lt_
of the , 1 . ,
shareholders. Every company is reqiiired to call it
m= a year. The provisions of section 81 along wiith some other
smons are applicable to annual general meeting which are
diHxissed here.

.rf£ of annual general meeting: The main object of this meeting

rs to make
Ll,A the s.hareholders
+1~--I--.__L_I I aware-of the
-. J _ __ _ ---- + '''`'`,."'e
progress and development
of the company made during the year. Besidi`s. showing the profits
nd loses of the company, in the immediali` past year. to the
shareholders is another important object of the mi.i`ting.

aingthemeeting:Theruleot`company],awisthatacompahyis
I:-dJ +._ ,A_11 _ __ i 1 .
I , __ _ ..--. I-I,`,".rwIIJ-IJ
required to call a geheral meeting every year in addition to any other
nmetings which is specified as annual general meeting. [Sec. 81 (I )I
The first annual oenprj]l
meral mflat:n,,
meeting+tt..f`+ must L^be L_u
held ___." .
viit`hin . .\,J
eighteen
a-=#` --,- i}~:-`-.i^ ---------- ~~`tr --u< _+. -
LE
_=(±lsrs( oa=r-I:=: ==Sa! te of it-Siife'6r-po`ra±igrQ_n± =~aj|di=¥:iri=C.±r a?`Pfra±
- ` -trfty~*-fa#_r±==i-_-r Q=._I.¥.~u±
=€Ti:>=-: +.-i,`--: _ _I „

ing=ia¥ja§#±¥eulji:_`,jlj_i`±#%±eti+:~:i:p£±t|::~:yeca9rap#f:s¥i:Scopr%tp::t¥;rinrfgdi#
_ :---;53=-++=`
-===:iii==-.---r-
REa#uife:i
ever.v subseq uent
[Sec. 81 ( I ) (PFovis6)I
S'_ep~Sr+al Ipeetjng. lone general_
ye.a.rT..
rt]_Get_ing ~must be
w------_cJ-_--J=-'==:I:;+I
Tkggrp_eLW_e_€q_rty9_n_9~..?n_n±al 8e.Pffal
_n_I-,-iT+--i_i+I_ __+I-.-.-.
_ : .-.-i=±|¥~-±'_.~t'L.¥J
, . !E~.f!`EL[±d|±J£.fEffa±
iEEirn~£ltt-han6thLgLn,±s|_I.e± hb.9 ejgivapsed more tlian fifteen months.
tas4Alee6Se~^.U.a.a-`+I -\r\~~ 3rf ~~ ~ i -~1 -b ~r-rtF+i*qu S¥ __
 318 Company Meeting

T±_~eatife+I_n_p_apj£±Ag!heo¥i+g!§±jaELp!p_¥jsjqu~.vyhich_permits.

eL¥eifetrfuib#cai::-j~tasrg#;3r.j#
Lh_e.aeier2aJELrfuoldrisJirstgivarmdr§m=e_ralm±e.,ting._at_3nyJ?.!€.rJim±

¥:r6S#6%tacotm¥%_rig;yfaiH
At least one meeting in each calendar year: A company shall in
each year hold an annual general meeting and in addition to it, it is
free for the company to arrange more meetings. In free Mee#¢AsW
Mills Co, Lttl-vs-Asstt Registrar Of joint stock companies445 ` one
general meeting of a company was called in December,1934 but it
was adjourned to March,1935 and the held. In February,1936 the
subsequent meeting of the company was held. As a result. the
company was prosecuted for not holding the gerrera Tneetings
annually, though the company contended that it held meeting every
year.

Contention of the prosecution: The prosecution contended that.

• the meeting was called in 1934 but adjourned to 1935 and
held in that year;
• subsequent meeting was held in 1936. Since the meeting of
1935 was of actual .meeting of ]934 and there was
subsequent meeting in 1936, so there was no annual meeting
in 1935.

ffc/#.. The court convicted the company and observed that `tthere
should be one meeting per year and as many meetings as there are
years."
ln Re Brahmanberiii Loan Co. Lt{rb, the secretary o{ the company
was arrested in a criminal case and some important books and papers
were in his preserv,ation. Since, he was not released when it was the
time for holding meeting and the books and papers were not
exhibited` the company did not hol-d t`he general meeting that year.

" T.V. Mathew-vs-Nadukara Agro Processing Co. I.td. [2002] 108 Coinp.
Gas.13b Her.
J`'4 Gbson-\,'s-Barton, [~1875| L.R. I 0 Q-B. `iJ`J.
JJ-< A/R I I t}38 I Mad 640.

AJ`R 1`)34 (`al. 624.

 [`undamentals of c`ompany law
3-19
`.rf

Butthecourtrefusedthecontentionol`Lliccompaiiytfornon-holding
the meeting and f`ound it liable.

!PfrFce of annual general meeting: The annual general

rfrfgg:a::=g;::=g;==;n::;,:i;:r:;anycse:i::'breo'g±g#;gggj;g=
"`Owl#ways:
it is the annual general meeting where. the share
Iiolders
EENiENiEEErdEiiEEfflEriEHEE[mmRIEmEITmHillmqum.mEHREH
givrgiv ill this
±£ae±±reHren± and re-election of the

~(iti,--.
;nh¥:ffi#n4tg7,at::
rf#REEL%C#:#.ghiErfud=:i+::i:s
£|H|9flfi of the Company is also shown %iifiT;
meeti.ng;
many other important affairs of the company are
performed` in the annhal general meeting.
`\t`
\,'
As many important businesses are transacted^tre annual general
meeting so, ±±jifg=Lp_ulsory for all the companies to hold annual
are not ready`'° or the
company is not carrying on
of the
`dr-`th-ecourt450 like, the government

Extension of time by the Registrar: If the company fails to hold an

annual general meeting within the prescribed time, the Registrar may
extend up.to ninety days within which the annual general meeting
other than the l`Irst annual general meeting should be held. [S. 81 ( 1 )
(`Secoiid Proviso)]

i-Shaw & Sons-vs-Shaw, I-1935| 2 KB. I 13.

~` Re EI Sombrero.I.td. I 1958L3 A.E.R. I. `'
~' \Iadan Gopal De.v-vs-State ot` West Bengal. [ 1968] 2 Comp. Cas. I+.J.
tt
=__
in-' Re Hiiidiistaii {`oi.p. In.`iirance Societ}' Ltd. ILR I 1961 I Cal. 443.
aLffidr>j#fjatf#+u€#gr'-uLae±*};#F#!!`iae¥Sf¥££®
C-
320 Company Meeting

But the time for holding the annual general. meeting is never
extended45[.
\

Time and place of meeting: It is the general rule that the meeting
should be held at any convenient place and ori the business hour. So,
an annual general meeting should be held at the registered office of
the company on the business hour452. But if it convenient for the
shareholders or on any other reasonable ground, a meeting may be
held out side the registered office but within the area where the
registered office is a situated. In such a case notice is required to be
Sent to the shareholders and inembers453.

IVofi.cc.. For calling an annual general meeting a fourteen days notice

in writing is required to be sent to the members. However, the
meeting may be called with a shorter notice if the shareholders and
the members entitled to vote give consent to this effect. [S. 85]

Consequences of non-holding an annual general meeting: If a

meeting is not held in accordance with the procedure mentioned
earlier, the following consequences are found.

HblriTngofAGMbythecourt'sorder:Ifacompanyfailstocallan
a+::ntuhae]:;:I::aa]t;::e:infn;C:°er#e8rt:fstehce.#:;ecna:]h:rc:rrectma±€

C-alling of -a general in-eeting of the company and give such armtryife=fu

or consequential direction as the court thinks fit. [S. 81 (2)]

i.F Ity for default: If default is made__ ip hfapJ_~ding+? _TPse_ting 9f_tr±

company in accordanFfiitff=§€hciioii .BErorf!j=;ifi`Qo=EpiriHfrmjELif
::+!5F_hls~in.ads`±]}§i8..I..t2j.tt`o`-[inid-inH
meetingby__cgHtt:,S,=Qfdg.r}*Jke.£urlpan_y ande¥e_ry±Of
who is in default. ih:g]JJ±gp±±!±jsbab!g+a±ithLfig=e__i£1adeEch
may extend i-aka and i n fg_§§___Q£_£g=n±#±ifegdefaiih
tL3`_

¥o¥Eg#=v::]€T:±j_F:=e:;¥m:[atj+f%¥Q;E]_i:atlg2t=r.fiftyrfu
_. ___ i +_Tfty~try ur+ _ _,rij. * _ flgr .,-.. er.~~~~m+

J5' Dalmia Cement (Bharat) Ltd-vs-Reg. of Joint Stock Companies` A/R

1954 Mad 276`.
453 Dindar Rai D. Desai-vs-R.P. Bhasin. [ 1986] 60 Comp. Cas 14 bel.
J53 Sikkim Bank Ltdrvs--R.S. Chowdhury. (2000) I 02 Comp. Ca+s 187 cat.