TaxTMI 
TaxTMI 
2026 (8) TMI 1080
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..... SESHASAYEE, MEMBER (JUDICIAL) JATINDRANATH SWAIN, MEMBER (TECHNICAL) For the Appellants : Mr. R. Murari, Senior Advocate For Ms. S. Manjula Devi & Mr. Pavan Kumar Gandhi, Advocates For the Respondents : Mr. Joseph Kodianthara, Senior Advocate For Mr. Issac Thomas and Mr. Chandapillai Abraham, Advocates for R1 Mr. P.H. Arvindh Pandian, Senior Advocate For Mr. Akhil Suresh & Mr. Jerin Asher Sojan, Advocates for R3 & R4 JUDGMENT Per: Justice N. Seshasayee, Member (Judicial) This appeal is preferred by three of the members of the 1st appellant company challenging the Order of the NCLT dated 22.06.2026, in C.P.No.04/KOB/2026 which the 1st Respondent herein had instituted under Sec. 98 of the Companies Act, 2013. 2....
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....nt, Mr. P.H. Arvindh Pandian for the 3rd and 4th respondents, all senior counsels appearing 4th for appellant as well as for the respondents. The learned Counsel for the appellant would submit that: a) in terms of Sec. 100(4) of the Companies Act, 2013, if the Extraordinary General Meeting is not convened despite valid requisition given for the purpose, then those who had requested for the meeting have the right to convene the same under Sec. 100(4). And Sec. 98 can be invoked only if it is 'impracticable' to hold or conduct the meeting in the manner prescribed by the Act or the Articles of the company. However, the 1st Respondent has not chosen to demonstrate why it has become impracticable for him to convene the meeting. ....
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....ove referred to judgment in Re Ruttonjee case. Discussion & Decision 6. The dispute has two parts: First issue is whether Sec. 100(4) provides an exclusive remedy to the one who is aggrieved by the failure of the Board of a company to convene a Extraordinary General Meeting pursuant to the requisition of the first respondent to convene it under Sec. 100(2) or is it merely an alternative remedy. In other words, the issue is as to whether it is permissible to invoke Sec. 98 without exhausting Sec. 100(4). The second aspect is whether tribunal should invoke its powers under Sec. 98 of the Act in directing the convening of the meeting requested for by the first respondent. While the former involves a legal issue, the latter is required to....
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....sitioning member under Sec. 100(4) of the Act and convening a meeting through the intervention of the tribunal under Sec. 98 are mutually exclusive, and invoking the latter is not dependent on exhausting the former. 8. There, however is a rider. While a requisitioning member's right to convene a meeting under Sec. 100(4) is absolute, his right to invoke Sec. 98 is qualified as it can be invoked only upon proof of the statutory precondition that it has become impracticable to hold a meeting without the intervention of the tribunal. The fundamental rule in corporate governance is dictated by the rule of internal democracy, and it is axiomatic that tribunals shall not interfere with the internal management of the company. Set in the context....
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....rudent man of business. 5. A prudent man of business has not a sensitive, officious view of intervention in case of every rivalry between two groups of directors; prudence demands that the court ordinarily keep itself aloof from participating in quarrels of rival groups of directors or shareholders. 6. But where the meeting can be called only by the directors and there are serious doubts and controversy as to who are the directors or where there is a possibility that one or other or both the meetings called by the rival groups of directors may be invalid, the court ought not to expose the shareholders to uncertainties and should hold that a position has arisen which makes it "impracticable" to convene a meeting in any mann....
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....he facts of every case, but it must still be such that they are capable of creating an element of inevitability for the tribunal to step in. While the expression 'impracticable' is required to be understood not narrowly but with reasonable elasticity from a plane of ordinary prudence and common sense, yet the tribunal needs to reflect if it has become inevitable that unless it intervenes a meeting possibly could not be convened. If not, there is a potential danger of the fundamental rule of corporate governance pivoted in doctrine of internal management being replaced by the exceptional authority of the tribunal under the standalone provision in Sec. 98, which as indicated, is designed for sparing use. In other words, the nature of facts mu....