Section 97 of Companies Act 2013
Vaibhav Bhatt
February 19, 2024 at 12:56 PM
Section 97 of Companies Act. Power of Tribunal to call Annual General Meeting
“(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.”
Anatomization of Section 97 of Companies Act
If a company fails to hold a ‘Annual General Meeting’ in a financial year, that is mandatory for every listed company except for the one-person company to conduct a annual general meeting in every financial year, if the company fails to do so then any member of the company through an application for calling the annual general meeting to the tribunal.
That on receiving such application from a member of a company for calling the annual general meeting then the tribunal question the company for the failure that is there shall be an reasonable cause for the failure and direct the company to conduct the meeting later or such company is in default then the tribunal can call the company to hold annual general meeting.
That the such direction shall be given only when a representative person of the company is present for conducting of the meeting or else such direction will not be validated.
That a company conducting annual general meeting on the direction given by the Tribunal, such annual general meeting shall carry the same weightage as of the annual general meetings being conducted under the Companies Act, 2013. That there will be no difference if the annual general meeting being held to the subject matter od the tribunal direction, that any guidelines made in that meeting will be valid and carry the same value of the annual general meeting under this act.
For example, there is a company “ABC Ltd.” has failed to hold its AGM as required by the Companies Act, 2013, prompting shareholder Mr. X to seek legal intervention from the NCLT. The NCLT orders the company to hold the AGM and allows Mrs. X’s presence alone to fulfil the quorum requirement, ensuring the meeting’s validity under Section 97.
That also anything contained under this act or any article of association of the company shall not be liable to the direction given by the Tribunal for conducting the annual general meeting not be affected by them. That the orders or direction of the tribunal will be winding and failure to such directions of the tribunal shall lead to further consequences face by the company.
Types of meetings under Section 97 of Companies Act
- Annual General Meeting: Every company must host an Annual General Meeting each year, which is crucial due to the business conducted at the meeting. Business at the meeting includes Ordinary Business and Special Business. Ordinary Business includes financial statement review, dividend declaration, Director appointments, and Auditor approval. Special Business refers to any other items discussed. These meetings allow Members to collectively discuss company affairs and oversee management. Failure to hold the meeting can prompt Members to request the Company Law Board or National Company Law Tribunal to intervene.
- Extra Ordinary General Meeting: A company can also convene an Extra-Ordinary General Meeting when needed or at the request of members for handling urgent matters between Annual General Meetings. This meeting deals with special or urgent business and is called Special Business.
- Meeting of a Class members: Meetings are conducted to approve Resolutions that are applicable only to members of a specific group. Only members of that group are allowed to participate and have a say in such Meetings, like Meetings for preference shareholders. These Meetings must be held when there are changes proposed to the rights of a specific share class. The rules that apply to General Meetings also apply to these Meetings with necessary adjustments.
- Meeting of Debenture-Holders, Creditors & etc.: These meetings are conducted to approve resolutions that legally oblige the debenture holders or creditors of the company. They have the right to participate, speak, and vote in these meetings. The rules governing General Meetings apply to these meetings with necessary changes.
- Section 97 of Companies Act: Apart from the mentioned Meetings, a company can also conduct Meetings of its Members, debenture holders, or creditors as required by the Court or the CLB/Tribunal or any other authority. The collective actions of Members at a properly convened Meeting can exert their powers and represent the company, while individual actions by Members or shareholders, regardless of their shareholding, cannot bind the company.
If the company fails to hold the AGM on time or if the ROC denies an extension request, the members can ask the NCLT to order the meeting. Any member can approach the NCLT to request an order for the AGM. The NCLT can call the AGM if it finds the company has failed to do so despite member demand or if the AGM needs the Tribunal’s order. The NCLT can specify the AGM date and give meeting instructions. It may also dictate agenda, quorum, and appoint a chairman. The NCLT can assign an independent person to chair the AGM if needed. The NCLT intervenes only in genuine disputes or rights violations, not everyday matters.
Court and tribunals may seem alike at first glance, but they have key differences. For instance, courts adhere to the Code of Civil Procedure, 1908 and Indian Evidence Act, 1973, while tribunals follow their own set of rules. Courts are state-established with judicial powers, whereas tribunals are created by statutes to handle specific legal matters.
Process for filing of application to calling ‘Annual General Meeting’
- Form No, NCLT-1: The member of the company who appeals to the tribunal for calling of the annual general meeting shall make an application under form NCLT-1 for calling of annual general meeting.
- Petition along with the NCLT-1 form: That there must be an petition filed along with the application that the petition shall be verified by the member of the company that his counsel will read the facts of the petition to the member of the company who’s calling for annual general meeting through this application.
- Filing Fees: There will be a tribunal filing fees that has to be paid while filing and the receipt of the payment of such fees shall be attached with the application and the petition for calling of the annual general meeting.
- Any Other Relevant Document: That there’s any such document which the member of the company or his counsel may think fits or gives the more clarity to the tribunal, such document shall be attached along with the whole application.
Conclusion
That if any company other than the one-person company fails to hold annual general meeting in a financial year, that a company shall conduct annual general meeting within the six months of ending the financial year or no annual general meeting shall be held after the 15 months of the previous annual general meeting. On failure of such conduct any member of the company can file a petition along with the application under Form No. NCLT-1 in the tribunal for seeking such direction by the tribunal to the company to conduct such annual general meeting. The tribunal shall give direction or such direction will be validated only if the member person of the company is present before the tribunal.
FAQs
Q. What is the power given to ‘Tribunal’ under section 97 of this act?
The tribunal on inspecting shall give direction to member of the company for conducting the annual general meeting which the company failed to conduct earlier.
Q. Under which form such application shall be filed?
Any member of the company for calling of annual general meeting shall file a application under Form No. NCLT-1 for calling of annual general meeting.
Q. Who can file application in tribunal for calling of annual general meeting?
Any member of the company whether director, shareholder & etc. can file a application in tribunal for calling of annual general meeting.
Q. What is the filing fees for a application in tribunal for calling of annual general meeting?
As per current record the filing fees for the application is 1000 rupees only
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