Ranjit Borthakur and Anr v. W.G. Resorts Assam (P) Ltd. and Ors.

Sachet SahniCase Summary

Service of notice for EOGM through email

               Ranjit Borthakur & Anr v. W.G. Resorts Assam (P) Ltd. & Ors
In the National Company Law Tribunal
TA No. 06 of 2017 (CA No. 659 of 2015), TP No. 06/397/398/GB/2016 (CP No. 287/2012)
Before Mr P.K. Saikia, Member (Judicial)
Decided on November 5, 2018

Relevancy of the case: Service of notice for EOGM through email

Statutes & Provisions Involved

  • The Information Technology Act, 2000 (Section 4, 13)
  • The Indian Companies Act, 1956 (Section 166, 169, 171, 286, 397, 398, 402, 403, 406)
  • The Indian Companies Act, 2013 (Section 100, 73)

Relevant Facts of the Case

  • The respondent company, namely, W.G. Resorts Assam (P) Ltd., incorporated on January 13, 1988, is a private limited company with an authorized share capital of Rs. 40.00 lacs consisting of 4,00,000 equity shares of Rs. 10.00 each. The issued, paid-up, and subscribed share capital of the company was Rs. 31,61,000.00 divided into 3,16,160 equity shares of Rs. 10.00 each.
  • The petitioners filed the current petition under Sections 397, 398, 402, 403, and 406 of the Companies Act of 1956. They sought various reliefs alleging that the respondents conducted the affairs of the company in a way not authorized by law. Consequently, it resulted in mismanagement of the affairs of the company and also caused oppression to the petitioners.

 Prominent Arguments by the Advocates

  • The petitioner’s counsel contended that the conduct of the EOGM (Extraordinary General Body Meeting) violated the Articles of Association (AOA) of the company. Per law, the company must give its members at least 21 days’ clear notice of such meeting. Furthermore, there was absolutely nothing on record to show any requisition calling for the EOGM during any quarter whatsoever.
  • Therefore, the counsel sought that these violations require this Bench to declare the EOGM and the subsequent Board Meeting convened as null and void.
  • The respondent’s counsel contended that despite the service of notice to the petitioners by way of email, they refused to attend such meetings. Furthermore, such email correspondences are legally reliable in taking a rational conclusion on the disputes under consideration. The counsel placed reliance on the law laid down in Sections 4 and 13 of the Information Technology Act, 2000. Hence, the counsel contended that the petitioners must not be allowed to argue that P-1 was not given any notice of Board Meetings held on 19-10-2009 and 02-11-2009.

Opinion of the Bench

  • The bench observed that when the Companies Act, 1956, came into being, the Information Technology Act, 2000, was not there. The 1956 Act did not prescribe any mode of service of notice of the Board Meeting on the directors of the company. However, Section 173(3) of the Companies Act, 2013 recognizes the service of notice of the Board Meeting on the directors via emails as well.
  • Therefore, the bench opined that if the service of notice on the directors of the Board does not suffer from the vice of illegality, unreasonableness, and perverseness, any mode of service, employed by the management is legitimately valid.
  • Thereupon, the tribunal was inclined to hold that Sections 4 and 13 of the Information Technology Act, 2000 to a certain extent, supplement the provisions of Section 286 of the 1956 Act as far as service of notice is concerned.

Final Decision

  • The bench, thus dismissed the petitioner’s claims on the convening of the EOGM via email.
  • Nonetheless, the bench still found that the board meetings disregarded various rules and procedures in its conduct.