Urgent! section 169 of companies act
Section 169 of the Companies Act, 1956, provides that on requisition of members of a company having share capital or not, the Board is required to call and hold extra-ordinary general meeting. The rights of members individually or collectively are enumerated as under:—
(a) in case of a company having a share capital, such number of them as hold at the date of requisition, not less than 1/10th of such of the paid up capital of the company as at the date carrying voting right in regard to that matter;
(b) in case of a company not having a share capital, such number of them as have at the date of deposit of requisition, not less than 1/10th of the total voting powers of all members having at the date a right to vote in regard to that matter.
Though section 169 uses the expression ‘such number of members of the company’ in the plural, yet the requirements of the provisions would be satisfied even if one member holding the requisite number of shares or voting rights makes the requisition
Shareholders who have not paid a call made on them, are not entitled to requisition an extraordinary general meeting
The Board of directors of the company is under an obligation to forthwith proceed duly to convening an extraordinary general meeting if requisition by members is made in relation to any matters. The Board shall within twenty days from the date of deposits of a valid requisition shall proceed to call a meeting on a day not later than 45 days from the date of deposits of such requisitions.
If the company fails to proceed within 21 days and to call the above said meeting within 45 days then the members may call themselves a meeting within a period of 90 days from the date of deposit of requisition to the company after expiry of 45 days and the expenses for calling meeting by them shall be reimbursed by the company by debiting the amount to the directors.
The word ‘valid’ has no reference to objects of requisition but to compliance of requirements of the section itself.
If on a day appointed for meeting on requisition, the adequate quorum is not present then meeting shall stand dissolved.
It would finally be for shareholders to decide in meeting whether to opt for proposals or not and thus, no injunction could be granted to restrain holding of a meeting, when such a meeting was the only way in which shareholders could decide the matter. [K.G. Khosla v Rahul C. Kirloskar (2002) 35 SCL 546 (Delhi)]