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TMI Blog2018 (10) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... the manner in which Respondents held Annual General Meeting dated 26.09.2017 of the Company Respondent No.1. 2. With the Appeal, copy of Company Petition is filed at Annexure - A4. We refer in brief to the contents of the Company Petition to see what is the case of the Appellant, in short. 2.1 The Company Petition mentions that Respondent No.1 is a public limited company. Reference is made to the objects of the Respondent No.1 Company and its share capital. Respondent Nos.2 to 5 are stated to be the Directors of Respondent No.1 Company (hereafter referred to as 'Company'). The Appellant claims that he is holding 105 equity shares of the Company in dematerialized account. It is stated that the 44th Annual General Meeting of the shareholders was called to be held on 26th September, 2017. A Notice of the AGM had been issued with Agenda along with proposed resolutions. In para - V of the Company Petition, the Appellant set out the Agenda items, drawing them from copy of the Notice which had been sent. 2.2 The Appellant claimed that he is of advanced age and residing at Kolkata and he proposed to participate in the AGM through his representative. In furtherance of the same, the proxy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was heard at preliminary stage itself by the learned NCLT. NCLT referred to the pleadings and prayers made in the Petition and also the arguments. The NCLT with reference to Section 96 of the new Act which relates to requirement of each year holding of Annual General Meeting, observed:- "13. The only requirement of Section 96 of the Act is holding of AGM of the company each year, which has been complied with. The manner in which the meeting has been conducted cannot be raised as a question before the Tribunal. It is simply alleged in the petition that the petitioner was present through his representative and certain other shareholders present also raised objection, but the name of any such person, has not been mentioned. The petitioner has not disclosed the name of his representative present in meeting nor any affidavit of the said representative to support this allegation. The petitioner has also stated that shareholders were threatened by the management at the time of voting, but it is not the case of the petitioner that any complaint with the concerned police station was lodged to support this assertion." 4.1 NCLT then reproduced Section 97 of the new Act which relates to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not present. 6. Although the Respondents were not even issued Notice in the NCLT, we had issued Notice of the Appeal and counsel for both sides have been heard. The Respondents have only made written submission in defence in the Appeal. In the Impugned Order, NCLT had as one of the observations mentioned that the Appellant had not even appended with the Report, copy of the Form No. MGT - 15 as per Rules. As this was a document, which the Respondents were supposed to submit to ROC, in the Appeal we had asked the counsel for Respondents and the Respondents have put on record copy of MGT - 15 with Diary No.6055. One of the other observations of NCLT was that the Appellant did not show as to what is the role of Respondents 2 to 4, in the petition. The Company Petition did state that Respondents 2 to 4 were Directors of Respondent No.1. However, this factual error of NCLT is not very material. 7. Coming to the arguments, the counsel for the Appellant submits that every Company, other than one person Company is liable to hold, each year a general meeting as provided in Section 96. It is argued that if there is any default made in holding the AGM under Section 96, the Tribunal can dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annual general meeting of the company. Provided that in the case of revival and rehabilitation of sick industrial companies under Chapter VIA, the provisions of this section shall have effect as of for the words "Central Government", the word "Tribunal" had been substituted. 7.2 Counsel for the Appellant referring to Sub-Section (1) of Section 97 is submitting that the placing of the word "any" in the opening portion of sub-section makes it clear that any default regarding holding of AGM would include not merely the time of holding but also manner of holding the AGM. Referring to the difference in languages of the new and old provisions, it has been argued that as Section 97 now makes it possible for any member to move NCLT and the Appellant had the right to move NCLT regarding the manner in which the meeting had been held. The submission is that there was an obligation to hold the AGM under Section 96 in accordance with the provisions of the Acts and Rules. If the mandatory compliances of the procedure are not followed, the entire object of holding AGM would be rendered nugatory, it is stated. The shareholders can exercise control over the affairs of Company only through General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement and Administration) Rules, 2014 which requires the Company to report particular details as mentioned in the Rule, with reference to the meeting and there is prescribed form MGT - 15 to be submitted as per Sub-Rule (2). The counsel submitted that the Company complied with Section 121 and gave particulars in the prescribed format and did not make any default in the form. It is stated that, even if it was to be said that there was any default, Rule 30 provides for penalty and it cannot be claimed that the meeting itself was not held or that holding the meeting would get vitiated. Counsel for Respondents submitted that Section 96 makes it obligatory on the Company to hold each year Annual General Meeting as provided in the Section and if there is default in holding the meeting, Section 99 prescribed punishment of which the Company would be liable. Referring to Section 97, it has been argued that the slight change in the opening wordings of new Section 97 viz-a-viz old Section 167 has not changed in fact and effect the meaning of the Section. It still relates to the requirement to conduct AGM each year. The argument is that the default relates to failure in holding the meeting in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd. A copy of the report filed after the meeting with Bombay Stock Exchange is already available on record. The follow up action required to be taken by the Company submitting form MGT - 15 is also available. Considering these documents on record when the petition is perused, it must be said that no material to make out a case is there to spell out cause of action and no prima facie case is made out for the various allegations. The Petitioner himself was not witness to the happenings in the meeting and no Affidavits or any other proof is filed of his alleged authorized representative or proxy, or anybody else. When no supportive material is available to make out cause of action or prima facie case, it is not necessary to go into roving inquiry into the manner in which the AGM was conducted. As such the arguments raised by the Appellant on the legal question relating to interpretation of Section 97 needs no discussion in the present case, as Appellant failed to cross the first hurdle itself to make out case invoking jurisdiction. Although the Appellant failed to make out a cause of action or prima facie case, the NCLT still considered his grievances and found it fit to dismiss the P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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