TMI Blog2019 (12) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... the EGM passes a resolution, the final MOA and AOA would become available to the Club and the Club would then have to submit the same for approval to the Ministry of Corporate Affairs, under Section 8(4) the Companies Act, 2013 - The Explanatory Statement is clear that once the Resolution is passed by the EGM, the same shall be submitted for approval. If the MCA directs any modification or other change in the MOA and AOA, the Resolution shall stand modified accordingly. Thus, it is only after the amended MOA and AOA is approved by the MCA that the amended MOA and AOA would come into effect. The Club is quite clear in its stand that it first places the MOA and AOA before the EGM, after which, it would be seeking approval of the Central Government. Once the EGM s approval is received and approval is sought from the Central Government. The Government is to look into the entire issue, including the issue of membership etc. - Application disposed off. - W.P.(C) 8037/2019 & CM APPLs. 33296/2019, 42706/2019 - - - Dated:- 19-12-2019 - PRATHIBA M. SINGH J. Petitioner Through: Mr. Sanyam Khetarpal, Mr. Nitesh Goyal and Mr. Jahanvi Sharma, Advocates. (M:9873674225) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no approval has been sought, the placing of the amended AOA and MOA before the EGM is itself contrary to the scheme of Sec. 8. When the writ petition was listed before this Court on 26th July, 2019, after hearing the Petitioner, an interim order was passed directing that the proposed EGM shall remain stayed. The operative portion of the said order reads as under: Till further order, EGM dated 04.08.2019 proposed to be conducted by respondent No.5 and the process of electronic voting to be commenced on 30.07.2019 on the agenda of 04.08.2019 shall remain stayed. 5. The Club has, thereafter, entered appearance and filed CM APPL. 42706/2019, seeking vacation of the said ex parte ad interim order. The stand of the Club is that the Petitioner has no right to maintain the present writ petition. It is submitted that the explanatory memorandum, which was attached to the proposed AOA and MOA, clearly stipulates that after the EGM considers the amendments to the MOA and AOA, approval shall be sought from the Central Government, which the Club intends to follow to the tee. It is submitted that the Petitioner has misled the Court on Section 8, the argument of the Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no requirement to file a counter-affidavit. 10. Having heard the ld. counsel for the parties, the first and foremost contention that needs to be considered is whether the EGM ought to be permitted to be held. The holding of a EGM is inherent for the functioning of any company including the Respondent Club. All decisions regarding the manner in which the Club is to be run first vests with the members and then the governing bodies. The Court s intervention ought to be minimal. Unless there is complete perversity or fraud or illegality in the functioning, there ought to be no interference. Moreover, the entertaining of a petition at the instance of a person who is not a member is a serious issue of maintainability that will have to be determined by the Court. 11. The issue has been raised as to whether prior approval by the Government is required for placing the amended MOA and AOA before the EGM. Section 8(4) reads as under: 8. Formation of companies with charitable objects, etc.-(1) Where it is proved to the satisfaction of the Central Government that a person or an association of persons proposed to be registered under this Act as a limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorporated in the MOA. The Board of Directors a.k.a General Committee (GC) endeavours to update the MOA so that members and the management are aware of the applicable law and do not miss complying with the letter of law. The General Committee in its meeting held on Thursday, 27th June 2019 has approved the said proposal, subject to approval of the Members and Registrar of Companies (ROC)/ Central Government. In terms of the provisions of Section 13 of the Companies Act, 2013, the Company is required to obtain approval of the members by way of a Special Resolution and pursuant to provisions of Section 8 of the Companies Act, 2013, a Company registered under this Section shall obtain approval of the Central Government(Power delegated to ROC), for alteration of the Memorandum of Association. Accordingly, the resolution is being proposed as a Special Resolution. Kindly note that the Club, being a Section 8 Company, any modification/ alteration in the Memorandum of Association of the Club requires prior approval of the Registrar of Companies. Hence, an application would be filed with Registrar of Companies and in case of any dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the agenda items mentioned in the booklet that has been placed before the Court including the proposed MOA and AOA. b) The EGM shall consider the amended MOA and AOA and pass a resolution in respect of the same. c) The Club shall then upload the approved MOA and AOA on the MCA website, which shall process the same in accordance with law. Only upon approval being received from the MCA, the amended MOA and AOA would take effect. 16. The applications are disposed of in the above terms. W.P.(C) 8037/2019 17. Once the processing of the new MOA and AOA takes place, the Government shall file a counter-affidavit. In any event, insofar as the show-cause notice and the replies thereto are concerned, the Government shall place its stand on record, in order for this Court to consider the same. 18. Mr. Liberhan, ld. Counsel, submits that if the Petitioner wants to seek a refund of the money which he has deposited, the same would be refunded immediately upon a request being made by the Petitioner. The question of refund is not being asked in this Petition, by the Petitioner. It is for the Petitioner to respond to this submission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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