ORDER
K.K. Ballu, Member
1. This is an application filed under section 167 of the Companies
Act, 1956 (‘the Act’) by the applicant seeking directions of this Bench against
Amalgamation Private Limited (‘the company’) for the following reliefs:
(a) to convene and hod the adjourned annual general meeting of the company
originally held on 29.9.2000;
(b) to appoint Chairman of the meeting of the adjourned annual general meeting;
(c) to pass necessary order with regard to quorum for the meeting; and
(d) to rectify the record of the minutes of the meeting of shareholders held on
29.9.2000 and 30.9.1999.
2. According to the applicant, he is holding 10 per cent of the issued share capital
of the company. the company had convened its 61st annual general meeting for the
year ended 31.3.2000 on 29.9.2000, wherein certain items of business were not resolved
by the shareholders. Consequently, the annual general meeting was adjourned
to a future date for consideration of the unresolved items. The adjourned
annual general meeting was assured to be held on or before 30.11.2000. However,
this meeting was not convened by the company. Moreover, many of the vital discussions
which took place at the time of annual general meeting were not properly incorporated,
but they were deliberately omitted in the minutes of the meeting. The
minutes of the earlier meeting held on 30.9.1999 do not also reflect the proceedings of
the meeting; and the minutes of both the meetings are required to be rectified, reflecting
a true and fair view of the proceedings. Hence, this application.
3. According to the company, the application lacks merits and is untenable in
view of the fact that the adjourned annual general meeting of the company was convened
and concluded on 23.3.2001. While the application has become infructuous,
the company has denied the allegation in regard to the deliberate omissions in the
minutes of the annual general meeting. The company, has, therefore, sought for
dismissal of the application.
4. During the hearing, Shri Arvind P.Datar, senior counsel appearing for the applicant,
while reiterating the averments made in the application, has submitted that
the minutes of the 61st annual general meeting do not reflect a true and fair view of
the proceedings of the annual general meeting. The minutes deliberately do not contain
several of the essential discussions which took place in the course of the meeting,
which are required to be rectified. The application seeking intervention of this Bench
was filed on 19.2.2001, whereas the adjourned annual general meeting was convened
and held by the company on 23.3.2001. Though the company has subsequently convened
the adjourned general meeting, the minutes of the annual general meeting
originally held on 29.9.2000 should be rectified reflecting a true picture of the proceedings.
Shri Datar urged that the Company Law Board, in exercise of its powers
under Section 167, has the authority not only to direct the company to call a general
meeting of the company, but also [to] give such ancillary or consequential directions
as the CLB think expedient in relation to the calling, holding and conducting of the
meeting. He further pointed out that the company has failed to deny specifically the
averments made in the application in regard to the deliberate omissions in the minutes
of the meeting on several of the issues. The denial of the company is vague and
not specific, in which case, it does not amount to denial by the company. In this connection,
he has placed reliance on Kewal Krishan v. Dina Nath AIR 1993 SC 881, to
show that denial of allegation should be specific. He further relied on Lohia Properties
(P) Ltd. v.Atmaram Kumar (1993) 4 SCC 6 for the proposition that allegation of fact
must either be denied specifically, or by a necessary implication or there should be
atleast a statement that the fact is not admitted, failing which the allegation shall be
taken to be admitted. He further emphasised that though the provision of Civil Procedure
Code are not applicable in the proceedings before the Company Law Board,
the underlying principles enunciated in Civil Procedure Code are applicable. In the
present case, the denial of facts is not specific, and hence, the averments that the
minutes of the meeting do not reflect a true and fair view of the proceedings should
be deemed to have been admitted by the company. In the circumstances, though the
meeting has been held, the Company Law Board exercising its powers under section
167, has discretion to give consequential direction for rectifying the minutes of the
meeting held on 29.9.2000. He further referred to the various correspondences between
the applicant and the company and, particularly, the letter dated 8.1.2001 of
the applicant addressed to the company listing out the discrepancies in the minutes
of the annual general meeting. In the circumstances, Shri Datar urged that the minutes
of the annual general meeting will have to be properly rectified.
5. Shri Krishna Srinivasan, counsel appearing for the company, has submitted that
the Company Law Board has authority to direct the company to call or direct the
calling of a general meeting of the company, and give directions as may be deemed
fit in relation to the calling, holding and conducting of the meeting. He pointed out
that the application was filed on 19.2.2001. The company had issued notice dated
28.2.2001 calling the adjourned annual general meeting, and the meeting was held on
23.3.2001. In these circumstances, the application has become infructuous and the
Company Law Board cannot direct the calling of the adjourned annual general
meeting. Consequently, no consequential directions can be given against the company
for rectification of the minutes of the meeting. The Company Law Board can
give consequential directions only when the company is directed to convene a general
meeting. In this connection, he relied on R. Rangachari v. S. Suppiah and others
(1975) 45 Comp Cas 641 (SC) to state that the court under Section 186 has no jurisdiction
merely to appoint a Chairman of the meeting without an order calling of the
meeting. He further emphasised that the Company Law Board has no jurisdiction to
rectify the minutes of the annual general meeting. Moreover, he pointed out that the
contents of minutes of proceedings of general meetings are presumed to be true by
virtue of Sections 193, 194 and 195 of the Act. Shri Krishna Srinivasan reiterated that
the allegations made in the application are singularly dined as baseless and self-serving.
The applicant cannot seek to rectify the defects, even if any, by resorting to
directions under Section 167; and the applicant has to approach a competent court of
law for appropriate remedy. The order, if any, is passed by the Company Law Board
in this regard will have no jurisdiction, and will not bind the parties and that any
order without jurisdiction is a nullity, in support of which he relied on Kiran Singh v.
Chaman Paswan AIR 1954 SC 340.
6. Shri Datat, in his reply submitted that the decision in R. Rangachari v. S. Suppiah
and others (1975) 45 Comp Cas 641(SC) is inapplicable in the facts and circumstances
of the present case, especially, when it is dealing with Section 186. He further pointed
out that even if ti is found that Company Law Board has no jurisdiction, the decision
of the Company Law Board will be binding between the parties till the order of the
Company Law Board is set aside. Shri Dater has, therefore, submitted that the company
should be directed to rectify the minutes of the 61st annual general meeting
held on 29.9.2000.
7. I have considered the pleadings and arguments of senior counsel for the applicant
as well as counsel for the company. The issued that arises for my consideration is
whether the minutes of the adjourned annual general meeting held on 29.9.2000
should be ordered to be rectified in the facts and circumstances of the case?
8. The facts not in dispute are that the application seeking directions against the
company for convening and holding of the adjourned annual general meeting was
filed on 19.2.2001. The company had issued a notice dated 28.2.2001, convening the
adjourned annual general meeting and the meeting was held on 23.3.2001. In the circumstances,
the application seeking direction to the company to convene and hold
the adjourned annual general meeting has become infructious. In the application,
the applicant has sought for direction to rectify the minutes of the annual general
meeting held on 29.9.2000. The said meeting was not held as per the directions of
the Bench. As per Section 167 of the Act, the Company Law Board has the powers to
issue appropriate consequential directions only in respect of a meeting convened at
its direction in terms of that section. Since in the present case, the meeting was held
without any directions from this Bench in terms of Section 167, the question of rectification
of the minutes of that meeting does not arise. Accordingly, the application is
dismissed having become infructuous in view of the company on its own convening
and holding the adjourned general body meeting. In view of this, I do not consider it
necessary to go into other contentions of the parties and case laws cited in this behalf.
No order as to costs.