Ashwini Mondkar & Sangeeta Verma, School of Law, Ajeenkya D Y Patil University
ABSTRACT
The shareholders or members of a company are its primary owners. At the same time, they are also the main beneficiaries of the company. The shareholder’s rights laid down in the Companies Act are democratic in nature. One of these rights is the right of the members to call for an EGM. The Companies Act, 20131 allows the members to call for an EGM through a requisition to be made to the Board of Directors. Section 100 which provides this right to shareholders also states the minimum number of members required to make the requisition. It also states that the requisition should set out the matters for consideration at the meeting. Section 100 further states that the requisition for EGM by the members is to be made to the Board of Directors of the Company who shall call for the EGM. This section has raised a serious question as to whether a requisition for EGM fulfilling the requirement of minimum number of members can be considered as valid or should it be considered invalid if the matters for consideration at the EGM are illegal or frivolous. As such, another important question which arises here is whether the Board of Directors have the authority to refuse the requisition of members which is accurate on procedural grounds but if the objective of the meeting cannot be carried out lawfully. These questions have been the subject matter of different court cases. This article seeks to study and analyse the judgements in various court cases regarding the interpretation of Section 100 of the Companies Act. It includes the validity of requisition made by members/shareholders of a company to hold EGM and also the question regarding the authority of the directors to refuse or reject the requisition. This article also refers to the relevant provisions for calling EGM by requisition under the previous Companies Act which have also been referred to as per the cases referred in this study.
Keywords: EGM, Section 100, Requisition
