ANNUAL GENERAL MEETING – HOW TO CALL
Annual General Meeting
Section 96 of the Companies Act, 2013 provides that every company other than a One Person Company shall hold a general meeting every year as its annual general meeting. This meeting is in addition to any other meetings conducted by the Company. More than fifteen months shall not lapse between the date of one annual general meeting of a company and that of the next.
The first annual general meeting shall be held within a period of nine months from the date of closing of the first financial year of the company. If the company holds its first annual general meeting as aforesaid, it is not necessary for the company to hold any annual general meeting in the year of its incorporation.
In any other case the annual general meeting shall be held within a period of six months from the date of closing of the financial year. For example the financial year 2016 – 17 ended by 31st March, 2017. The company is to convene annual general meeting by 30th September, 2017 which is six months from the close of the financial year 2016 – 17.
If the annual general meeting could not be conducted by 30th September, the Registrar may, for any special reason, extend the time within which any annual general meeting, other than the first general meeting, shall be held by a period not exceeding three months.
Every annual general meeting shall be called during business hours, between 9 a.m., and 6.00 p.m., on any day that is not a National Holiday. and must be held at the registered office of the company or at some other place within the city, town or village in which the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate.
National Holiday means and includes a day declared as National Holiday by the Central Government.
Power of Tribunal to call for annual general meeting
Any Member of the company may approach the prescribed authority, which may then direct the calling of the Annual General meeting of the company.if Board of Directors of the company fails to convene its AGM in any year.
Section 97(1) provides that if any default is made in holding the annual general meeting of a company under section 96, the Tribunal may, notwithstanding anything contained in this Act or the Articles of the Company, on the application of any member of the company call, or direct the calling of, an annual general meeting of the company and give such ancillary or consequential directions as the Tribunal thinks expedient.
Section 97(2) provides that a general meeting held in pursuance of the order of the Tribunal shall be deemed to be an annual general meeting of the company under this Act.
Rule 74 of National Company Law Tribunal Rules, 2016 provides that an application under section 97 for calling or obtaining a director to call the annual general meeting of the company shall be made by any member of the company in NCLT – 1. The following documents are to be filed along with the application-
Affidavit verifying the petition;
Bank draft evidencing payment of application fee;
Any other relevant document.
The fee payable is ₹ 1,000/-
The Tribunal, after considering the petition, if it founds that if it is a fit case to exercise the powers conferred under section 97 of the Companies Act, 2013, may direct to conduct the annual general meeting of the company.
In ‘Shri Pawan Kumar Gupta V. M/s Savitri Textiles (India) Private Limited’ – 2017 (8) TMI 133 – NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD the issue to be decide is to hold the annual general meeting under the provisions of section 96 of the Companies Act. The respondent company was incorporated on 22.01.2011 having its registered office at Surat, Gujarat. The petitioner was holding 20,000 shares of the respondent No. 1 company and also one of the directors of the said company. Because of the dispute among the directors, the audit as well as the annual general meeting could not be conducted during the period 2015. The last annual general meeting was held on 30.09.2014. The respondent company should have held its annual general meeting on or before 30.09.2015. Till date of filing the petition the respondent company has not held the annual general meeting for the year 2015 although fifteen months have elapsed on 30.12.2015 computed from the date of the last annual general meeting held on 30.09.2014.
The Tribunal analyzed the disputes prevailed in the respondent company. There were two directors of the company namely Shri Pawan Kumar Gupta and Shri Chandrasekhar Gupta since the date of incorporation of the company. A company petition was filed by Shri Chandrasekhar Gupta before the Company Law Board which was dismissed on 11.12.2015. Against this order appeal was filed by Shri Chandrasekhar Gupta, Director and brother of the petitioner. Shri Shyamsundar Gupta, father of Shri Pawan Kumar Gupta and Shri Naman Gupta, son of Shri Pawan Kumar Gupta were appointed as additional directors of the respondent company on 24.11.2015. The order dated 07.01.2016 of the High Court of Gujarat that the dispute is essentially between two brothers representing the respective shares, Hence, considering the facts and circumstances of the case, it would be just and proper if the matter is placed before the mediation centre where the attempt should be made to resolve the dispute amicably for all time to come. The petitioner and his brother met under the auspices of mediation centre for settlement of their dispute and Shri Chandrasekhar Gupta agreed to withdraw the appeal. However the appeal is pending before the High Court. Because of the dispute about the audit of accounts etc., raised by then Director Shri Chandrasekhar Gupta and pending company petition and subsequent appeal the Annual general meeting for 2015 could not be convened and held as per time limits.
Because of hurdles by the erstwhile Director Shri Chandrasekhar Gupta, audit could not be conducted and annual general meeting during 2015 could not be held. Shri Chandrasekhar Gupta has since resigned from directorship of respondent company on 28.06.2016 in terms of settlement entered between the applicant and the said Shri Chandrasekhar Gupta.
The petitioner being aggrieved has no other option but to make this application to the Tribunal for interference under section 167 of the Companies Act, 1956.
The Tribunal on due consideration of totality of the facts and circumstances of the case, in the light of the provisions of the Companies Act, 2013 as also the submissions made by the representative, considered that this is a fit case to exercise the powers conferred under section 97 of the Companies Act, 2013. The Tribunal directed that the annual general meeting should now be held within 30 days on receipt of the order of the Tribunal as prescribed under the statute. A compliance report thereafter should also be submitted to the concerned Registrar of Companies. It is paramount as well as the intention of the Companies Act to protect the functioning as well as the interest of the company. Therefore, it is always desirable to convene and call all the meetings as prescribed under the Act so that the company should not infringe the provisions of the Act or to be treated in default. Holding of annual general meeting is a statutory obligation.