Sections 98, 99 and 100 of the Companies Act, 2013: Tribunal Meetings, Default and Extraordinary General Meetings

Section 98 - Power of Tribunal to Call Meetings of Members

Section 98 applies where, for any reason, it is impracticable to call a meeting of a company, other than an annual general meeting, in the manner in which such meetings may ordinarily be called, or where it is impracticable to hold or conduct the meeting in the manner required by the Act or the company's articles.

Who may approach the Tribunal?

The National Company Law Tribunal may act on its own motion or on an application by a director or a member of the company who would be entitled to vote at the meeting.

What can the Tribunal order?

The Tribunal may order the meeting to be called, held and conducted in the manner it considers fit. It may also issue ancillary or consequential directions, including directions modifying or supplementing the operation of the Act or the company's articles for the limited purpose of calling, holding or conducting that meeting.

The statutory power is broad enough to include a direction that one member present in person or by proxy will be treated as constituting the meeting. A meeting held in accordance with the Tribunal's order is treated as a duly called, held and conducted meeting of the company.

Section 99 - Default in Complying with Sections 96 to 98

Section 99 addresses default in holding a company meeting in accordance with Section 96, Section 97 or Section 98, as well as failure to comply with directions of the Tribunal.

Under the statutory text, the company and every officer of the company who is in default may be punished with a fine extending to Rs. 1,00,000. For a continuing default, a further fine extending to Rs. 5,000 may apply for every day during which the default continues.

Section 100 - Calling of an Extraordinary General Meeting

An extraordinary general meeting is a general meeting other than the annual general meeting. Section 100 provides both a Board-initiated route and a member-requisition route for calling an EGM.

1. EGM called by the Board

The Board may call an extraordinary general meeting whenever it considers it appropriate.

Subject to the statutory exception for a wholly owned subsidiary of a company incorporated outside India, an extraordinary general meeting of the company is required to be held at a place within India.

2. EGM requisitioned by members

Where the company has share capital, the requisition threshold is members holding, on the date the requisition is received, not less than one-tenth of the paid-up share capital carrying voting rights. Where the company has no share capital, the threshold is members having not less than one-tenth of the total voting power of members entitled to vote on that date.

3. Contents and delivery of requisition

The requisition must state the matters for which the meeting is proposed, be signed by the requisitionists and be sent to the registered office of the company.

4. Time limits for the Board

After receiving a valid requisition, the Board must, within 21 days, proceed to call a meeting for consideration of the stated matter on a date not later than 45 days from receipt of the requisition.

5. When requisitionists may call the meeting

If the Board does not act within the statutory period, the requisitionists may themselves call and hold the meeting within three months from the date of the requisition. The requisitionists' meeting is to be called and held in the same manner in which the Board would call and hold the meeting.

6. Reimbursement of reasonable expenses

Reasonable expenses incurred by the requisitionists in calling the meeting under Section 100(4) are to be reimbursed by the company. The amount paid may be deducted from fees or other remuneration payable under Section 197 to directors who were in default in calling the meeting.