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TMI Blog2018 (3) TMI 868X X X X Extracts X X X X X X X X Extracts X X X X ..... r referred to as 'NCLT') in T.A. No. 02/2016 (CA No. 134/2016) in T.P. No. 06/397/398/GB/2016 (C.P. No. 287/2012). 2. It is stated that Respondent No. 1 moved application before the NCLT seeking facility of attending the Board meetings through video-conferencing. The petition was earlier filed under Sections 397 & 398 read with Section 402 of the Companies Act, 1956 ('Old Act' in brief). Respondent No. 1 claimed right to participate in the Board meetings through video-conferencing relying on Section 173(2) of the Companies Act, 2013 ('New Act' in brief). The matter had earlier come-up before the Company Law Board ('CLB') and being aggrieved by certain observations, the same was carried to the High Court of Guwahati. The Hon'ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther than the concerned Director is attending or having access to the proceedings of the meeting through video-conferencing mode or other audio-visual means. It is stated that when a Director resorts to availing facility of video conferencing, it would not be possible for the Chairperson to ensure that the Director is alone when participating from wherever the video call is made as the Chairperson would have no means to know as to who else is sitting in the room or place concerned. 5. We have gone through the judgement of the NCLT. We have perused provisions of Section 173 of the Act as well as the Rules referred. Going through the judgement of the NCLT, we find that these provisions have been introduced under the Act of 2013 and following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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: Provided that 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." 7. The above provision is admittedly a new provision in this Act and it is stated that earlier there was no such facility provided in the Act. 8. The above proviso has laid down that the Central Government may provide by notification which matters 'shall' not be dealt with in a meeting through video-conferencing or other audio-visual means. The Central Government has with reference to powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pation through video-conferencing or other audio-visual means. This word "may" does not give option to the company to deny this right given to the Directors for participation through video-conferencing or other audio-visual means, if they so desire. In this regard, provisions of Rule 3 are material. The relevant portions of this Rule for deciding the present controversy may be reproduced as under : "Rule 3. Meetings of Board through video conferencing or other audio visual means.- A company shall comply with the following procedure, for convening and conducting the Board meetings through video conferencing or other audio visual means. (1) Every company shall make necessary arrangements to avoid failure of video or audio visual connecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to them to participate through video conferencing mode or other audio video means, and shall provide all the necessary information to enable the Directors to participate through video conferencing mode or other audio visual means. (c) A Director intending to participate through video conferencing or audio visual means shall communicate his intention to the Chairperson or the Company Secretary of the company. (d) If the Director intends to participate through video conferencing or other audio visual means, he shall give prior intimation to that effect sufficiently in advance so that company is able to make suitable arrangements in this behalf. (e) The Director, who desire, to participate may intimate his intention of participation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attending and this would not be possible for Chairperson to ensure in video-conferencing. We do not find force in the submission as Rules, read as a whole are a complete scheme. Sub-Clause (4)(d) of Rule 3 puts responsibility on the Director participating also. The Chairperson will ensure compliance of sub-Clause (e) or Clause (2) and the Director will need to satisfy the Chairperson that Sub-Clause (d) of Clause 4 is being complied. 13. We find that the provision of Section 173(2) of the New Act read with these Rules as a progressive step. We have got so many matters coming up where there are grievances regarding non-participation, wrong recordings etc. In our view, Section 173(2) gives right to a Director to participate in the meting thr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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