2022 (10) TMI 962 - AT - Companies Law

Appellate Tribunal Urges NCLT to Expedite AGM Issue, Emphasizes Statutory Compliance

The Appellate Tribunal disposed of the Appeal by requesting the NCLT to expedite the pending matter, including the issue of the Annual General Meeting ... Legality of Annual general Meeting sought to be convened - Section 96 of the Companies Act, 2013 - HELD THAT:- The main petition is pending before the Tribunal for consideration. The instant Appeal is disposed off with a request to the National Company Law Tribunal, Cuttack Bench, Cuttack to expedite the matter and dispose of at an early date by considering all the issues raised by the parties including issue of Annual General Meeting. The instant Appeal is disposed of. Issues involved:1. Legality of Annual General Meeting held on 23.11.20212. Compliance with statutory norms for convening Annual General Meeting3. Interpretation of Articles of Association regarding General Meeting4. Pending case of oppression and mismanagement before NCLT5. Consideration of Sections 96 & 101 of the Companies Act, 2013Analysis:Issue 1: Legality of Annual General MeetingThe Appellants challenged the order of the National Company Law Tribunal (NCLT) regarding the legality of the Annual General Meeting (AGM) held on 23.11.2021. The NCLT had declared the AGM void and ordered that no decisions taken in the meeting be implemented. The Appellants argued that the AGM was conducted in accordance with the Articles of Association and applicable laws, emphasizing that the NCLT did not consider this aspect before passing the order.Issue 2: Compliance with Statutory NormsThe Appellants contended that the AGM held on 23.11.2021 complied with the requirements of Section 96 of the Companies Act, 2013, which mandates holding an AGM within a specified timeframe. They highlighted that the AGM was called before the deadline set by the Registrar of Companies, Bilaspur, Chhattisgarh, and proper notice was given to the members as per the statutory provisions.Issue 3: Interpretation of Articles of AssociationThe Appellants argued that the Articles of Association of the company excluded the AGM from the definition of a General Meeting. They asserted that the AGM conducted on 23.11.2021 was within the scope of the Articles of Association, and the NCLT failed to consider this aspect while passing the impugned order.Issue 4: Pending Case of Oppression and MismanagementThe background of the case involved allegations of oppression and mismanagement by the Respondents, leading to severe losses for the company. The Board of Directors had initiated a special audit due to financial irregularities, which resulted in the Respondents filing a case before the NCLT, registered as CP No. 108/CTB/2021. The main petition was still pending before the Tribunal at the time of this Appeal.Issue 5: Consideration of Sections 96 & 101 of the Companies Act, 2013The parties presented arguments regarding the provisions of Sections 96 and 101 of the Companies Act, 2013. These sections outline the requirements for holding an AGM, including the timeline, notice period, and business to be transacted. The Respondents emphasized the significance of AGMs as special meetings for interaction among Board Members and Shareholders to discuss company performance and future plans.In conclusion, the Appellate Tribunal disposed of the Appeal with a request to the NCLT to expedite the pending matter, including the issue of the Annual General Meeting, and consider all raised issues comprehensively. The judgment highlighted the importance of adherence to statutory provisions and the Articles of Association in conducting corporate meetings.