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What can be done when a company doesn’t hold an AGM under section 96?
Every company other than a One Person Company shall in each year hold in addition to any other meetings, a general meeting as its annual general meeting within a period of six months, from the date of closing of the financial year.
Every annual general meeting shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either 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 is situated.
What if, the company neglects these rules by not hold the AGM and just file the forms like AOC-4, MGT-7 or ADT-1 just like that keeping some date on or before 30th September as AGM.
Many of us might have come across such things, but as a shareholder, how to face such violations of law?
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Section 97 of the Companies Act, 2013
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Power of Tribunal to Call Annual General Meeting
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97. (1) 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:
Provided that such directions may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.
(2) A general meeting held in pursuance of sub-section (1) shall, subject to any directions of the Tribunal, be deemed to be an annual general meeting of the company under this Act.
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Who can file this application?
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A member.
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Who is a Member?
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"member", in relation to a company, means—
(i) the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members;
(ii) every other person who agrees in writing to become a member of the company and whose name is entered in the register of members of the company;
(iii) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository;
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What is a financial year?
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"financial year", in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up:
Provided that where a company or body corporate, which is a holding company or a subsidiary or associate company of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Central Government may, on an application made by that company or body corporate in such form and manner as may be prescribed, allow any period as its financial year, whether or not that period is a year:
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Who should the application be filed to?
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NCLT
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What is the due date of AGM?
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In case of the first annual general meeting, it shall be held within a period of nine months from the date of closing of the first financial year of the company and in any other case, within a period of six months, from the date of closing of the financial year.
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Is there any recent judgment or case law under this section?
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In the matter of Poonam Agarwal vs Navin Cold Storage Private Limited, the Honorable Tribunal passed order to the company to convene and hold a meeting of its members within 45 days of issue of this order.
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How should the application be filed?
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(1) An application under section 97 for calling or obtaining a direction to call the annual general meeting of the company shall be made by any member of the company in Form No. NCLT. 1 and shall be accompanied by the documents specified in ANNEXURE B.
(2) A copy of the application shall be served on the Registrar of Companies on or before the date of hearing.
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FORM NCLT 1 (attached as annexure)
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ANNEXURE B :
1. Affidavit verifying the petition.
2. Bank draft evidencing payment of application fee.
3. Any other relevant document.
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What is punishment for Non- Compliance of these Sections?
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If any default is made in holding a meeting of the company in accordance with section 96 or section 97 or section 98 or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to one lakh rupees and in the case of a continuing default, with a further fine which may extend to five thousand rupees for every day during which such default continues.
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ANNEXURE- A
(See rule 4)
FORM NO. NCLT. 1 [see rules 34, 64, 66, 67, 68, 69, 70, 71, 73, 74, 75, 77, 78, 79, 80, 81, 83, 86 and 87]
[HEADING AS IN FORM NCLT. 4]
Columns required for filing of Original Application / Reply / Rejoinder / Interlocutory Application or filing of additional documents under directions of the Bench
i. Details of Original Application / Reply / Rejoinder / Interlocutory Application Particulars of the Petitioner / Applicant / Respondent and state whether company, whether petitioner or not.
(Name, description, father's / husband's name, occupation, capacity, i.e. qua shareholder, qua depositor and address)
ii. Jurisdiction of the Bench:
The petitioner declares that the subject-matter of the petition is within the jurisdiction of the Bench.
iii. Limitation:
(If applicable) The petitioner / applicant further declares that the petition is within the limitation laid down in section ……. Of the Companies Act, 2013 (where applicable)
iv. Facts of the case are given below:
(Give here a concise statement of facts in a chronological order, each paragraph containing as nearly as possible a separate issue, fact or otherwise.)
v. Relief(s) sought.
In view of the facts mentioned above, the petitioner/applicant / respondent prays for the following relief(s):
(Specify below the relief(s) sought explaining the ground for relief(s) and the legal provisions (if any) relied upon)
vi. Particulars of Bank draft evidencing payment of fee for the petition or application made:
Branch of the Bank on which drawn:
Name of the issuing branch:
Demand Draft No………
Date…………..
Amount Rs………..
(Signature/Signature of Authorised signatory)
Date:
Place:
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