Ranjit Borthakur & Anr v. W.G. Resorts Assam (P) Ltd. & Ors
In the National Company Law Tribunal
Case Number T.A. No. 06 of 2017 (C.A. No. 659 of 2015) with T.P. No. 06/397/398/GB/2016 (C.P. 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 No.1 (R-1) company, namely, W.G. Resorts Assam (P) Ltd., was incorporated on January 13, 1988, as 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 have filed this petition under Section 397, 398, 402, 403, and 406 of the Companies Act of 1956. Through this, they are seeking various reliefs incorporated therein on alleging that the respondents conducted the affairs of the R-1 company in a way not authorized by law. Consequently, it resulted in mismanagement of the affairs of the R-1 company and also caused oppression to the petitioners.
Prominent Arguments by the Advocates
- The learned counsel for the petitioner contended that the Articles of Association (AOA) of the company were violated in the conduction of EOGM. The counsel argued that Section 171 of the Companies Act, 1956 was violated since it requires that in holding a general meeting, the company is to give the company members at least 21 days’ clear notice of such meeting. The counsel further submitted that Section 169 was also violated since there is absolutely nothing on record to show that any requisition was made from any quarter whatsoever calling for EOGM on October 3, 2009. These violations require this Bench to declare the EOGM and the subsequent Board Meeting convened on 19-10-2009 and 02-11-2009 null and void.
- The learned counsel for the respondents contended that despite service of notice on petitioner-1 by way of email as well, they refused to attend such meetings. The counsel submitted that such email correspondences could legally be relied upon in taking a rational conclusion on the disputes under consideration. The counsel placed reliance on the law laid down in Section 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
- It was 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.
- The Hon’ble Court observed that as long as 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 cannot be frowned upon. The tribunal was inclined to hold that Section 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.
- The tribunal dismissed the petitioner’s claim that EOGM was convened in complete violation of the law. The tribunal further held that the board meetings held on February 21, 2015, and March 30, 2015, were conducted in complete disregard for various rules and procedures.