AI Drafter 
TaxTMI 
TaxTMI 
2018 (3) TMI 868
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...., Guwahati Bench, Guwahati (hereinafter referred to as 'NCLT') in T.A. No. 02/2016 (CA No. 134/2016) in T.P. No. 06/397/398/GB/2016 (C.P. No. 287/2012). 2. It is stated that Respondent No. 1 moved application before the NCLT seeking facility of attending the Board meetings through video-conferencing. The petition was earlier filed under Sections 397 & 398 read with Section 402 of the Companies Act, 1956 ('Old Act' in brief). Respondent No. 1 claimed right to participate in the Board meetings through video-conferencing relying on Section 173(2) of the Companies Act, 2013 ('New Act' in brief). The matter had earlier come-up before the Company Law Board ('CLB') and being aggrieved by certain observations, the same was carried to the High Co....
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....n the Chairperson to ensure that no person other than the concerned Director is attending or having access to the proceedings of the meeting through video-conferencing mode or other audio-visual means. It is stated that when a Director resorts to availing facility of video conferencing, it would not be possible for the Chairperson to ensure that the Director is alone when participating from wherever the video call is made as the Chairperson would have no means to know as to who else is sitting in the room or place concerned. 5. We have gone through the judgement of the NCLT. We have perused provisions of Section 173 of the Act as well as the Rules referred. Going through the judgement of the NCLT, we find that these provisions have been ....
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....ideo conferencing or other audio visual means, as may be prescribed, which are capable of recording and recognising the participation of the directors and of recording and storing the proceedings of such meetings along with date and time: Provided that the Central Government may, by notification, specify such matters which shall not be dealt with in a meeting through video conferencing or other audio visual means." 7. The above provision is admittedly a new provision in this Act and it is stated that earlier there was no such facility provided in the Act. 8. The above proviso has laid down that the Central Government may provide by notification which matters 'shall' not be dealt with in a meeting through video-conferencing or....
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....he Director to choose whether he would be participating in person or the other option which he can choose is participation through video-conferencing or other audio-visual means. This word "may" does not give option to the company to deny this right given to the Directors for participation through video-conferencing or other audio-visual means, if they so desire. In this regard, provisions of Rule 3 are material. The relevant portions of this Rule for deciding the present controversy may be reproduced as under : "Rule 3. Meetings of Board through video conferencing or other audio visual means.- A company shall comply with the following procedure, for convening and conducting the Board meetings through video conferencing or other au....
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....the Directors in accordance with the provisions of sub-section (3) of section 173 of the Act. (b) The notice of the meeting shall inform the directors regarding the option available to them to participate through video conferencing mode or other audio video means, and shall provide all the necessary information to enable the Directors to participate through video conferencing mode or other audio visual means. (c) A Director intending to participate through video conferencing or audio visual means shall communicate his intention to the Chairperson or the Company Secretary of the company. (d) If the Director intends to participate through video conferencing or other audio visual means, he shall give prior intimation....
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....if any, have to take due and reasonable care as specified in Rule 3(2). The argument of the learned counsel for the appellant is that sub-Rule (2)(e) puts the burden on the Chairperson to ensure that no person other than the concerned Director is attending and this would not be possible for Chairperson to ensure in video-conferencing. We do not find force in the submission as Rules, read as a whole are a complete scheme. Sub-Clause (4)(d) of Rule 3 puts responsibility on the Director participating also. The Chairperson will ensure compliance of sub-Clause (e) or Clause (2) and the Director will need to satisfy the Chairperson that Sub-Clause (d) of Clause 4 is being complied. 13. We find that the provision of Section 173(2) of the New Ac....