2011 (7) TMI 1001 - Board - Companies Law

Amendment in AOA - Invocation of jurisdiction under section 186 of the Act - to change the articles of association as void and ultra virus Held that - prayer for calling a fresh meeting by poll of vote by ballot under the supervision of this Bench. This prayer is not consistent with reliefs sought in the main petition, so it cannot be considered as supplemental prayer to the prayers already made in the original petition. Apart from this, there is no pleading in this application indicating a situation impracticable to call a meeting by the Board which is precondition for invoking jurisdiction under section 186 of the Act. there is no pleading of the petition indicating a situation impracticable to call EGM by the Board of the Club ; secondly the meeting was already called by the time petition was moved before this Bench and the meeting was already held by the time the petitioners counsel made his submissions. Petition is dismissed

Summary

Issues:
Petition under section 186 of the Companies Act, 1956 seeking various reliefs related to changing articles of association, procedural guidelines, safeguarding members' interests, defining Board's power, clarifying purposes for change, and seeking costs and reliefs.

Analysis:
1. The petitioners sought multiple reliefs under section 186 of the Companies Act, 1956, challenging the proposed meeting to change the articles of association. They requested to declare the meeting void, direct the Board to formulate proper procedures, safeguard members' interests, define Board's power, clarify purposes for change, and seek costs and other reliefs.

2. The case involved a club constituted as a limited company by guarantee, with 500 voting members and 100 non-voting associates. The Board proposed changes to increase membership, admit new members, provide management opportunities, and conduct fair elections. The petitioners, entitled to vote, objected to the changes and sought intervention.

3. The respondents argued that the petition was misconceived and not maintainable, as it lacked material to invoke jurisdiction under section 186. The petitioners contended that the changes proposed by the Board would alter the club's fundamental features and lacked a clear mandate from existing members.

4. The key issue for determination was whether the case met the requirements of section 186, which allows the Tribunal to order a meeting if impracticable circumstances exist. The Tribunal's power is invoked when calling a meeting is impracticable, and interference in domestic affairs is unwarranted.

5. The Tribunal observed that the petitioners did not demonstrate impracticability in calling a meeting, as the Board had already held the meeting. The notice provided clear agenda items, and there was no evidence of procedural violations by the Board.

6. The petitioners' reliance on case law was countered by the respondents, citing the need for impracticable situations to invoke section 186. An amendment seeking a fresh meeting was deemed inconsistent with the main petition and did not establish impracticability.

7. Ultimately, the Tribunal dismissed the petition without costs, as there was no indication of impracticability in calling the meeting by the Board. The meeting had already taken place, and the Tribunal found no grounds to exercise its powers under section 186 based on the facts presented.