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2018 (9) TMI 1963 - AT - Companies LawDefault in holding 10th AGM - service of notice for the AGM - HELD THAT - The Appellant Board has to send its nominee to the Board of Respondent No. 2. It is for the Appellant itself to put its house in order. If it endlessly delays taking steps to ensure that nominee is selected and sent, AGMs of Respondent No. 2 cannot remain suspended. If not already compiled the Orders of NCLT need to be complied urgently. The Appellant may take any suitable steps to get the required directions from the relevant authorities in the Government but the orders as given by NCLT are required to be carried out considering the provisions of the Companies Act which make it necessary for the Company to hold the AGM regularly. Appellant is directed to depute a nominee urgently, as per directions given in the Impugned Order. The directions given by NCLT be implemented by parties. The period of 60 days as mentioned in Impugned Order be calculated from the date of this Order, i.e. 26th September, 2018 - appeal disposed off.
Issues:
1. Excuse default in holding the 10th Annual General Meeting 2. Direction to hold the 10th Annual General Meeting within a specified time frame 3. Appointment of a nominee Director on the Board of Respondent No. 2 4. Compliance with the directions given by the National Company Law Tribunal (NCLT) Issue 1: Excuse default in holding the 10th Annual General Meeting The Respondent filed an application seeking to excuse the default in holding the 10th Annual General Meeting (AGM) and to direct the company to hold the meeting within 40 days. The NCLT considered the grievances raised by the Appellant regarding the bifurcation of the State and the difficulties in appointing Board Members. Despite these concerns, the NCLT directed the company to hold the AGM, emphasizing the importance of regular AGMs as per the Companies Act. Issue 2: Direction to hold the 10th Annual General Meeting within a specified time frame The NCLT allowed the application by excusing the default in holding the 10th AGM and directed the company to hold it within 60 days from the date of the order. The order specified the requirements for the AGM, including serving statutory notices, adopting audited accounts, and fulfilling quorum requirements. The NCLT emphasized the necessity of removing legal impediments for the company's operations and directed the Telangana Housing Board to depute its nominee Director to the AGM. Issue 3: Appointment of a nominee Director on the Board of Respondent No. 2 The NCLT directed the Appellant to depute a nominee urgently to the Board of Respondent No. 2 as per the directions given in the order. It highlighted the Appellant's responsibility to ensure the nominee's selection and appointment promptly to avoid further suspension of AGMs. The Appellant was granted the opportunity to raise grievances during the Board/AGM meetings as per the law. Issue 4: Compliance with the directions given by the National Company Law Tribunal (NCLT) The judgment concluded that there was no reason to interfere with the NCLT's order and directed the parties to implement the given directions promptly. The period of 60 days mentioned in the order was to be calculated from the date of the judgment. The Appellant was instructed to comply with the NCLT's orders and urgently appoint a nominee Director as per the specified requirements. This detailed analysis of the judgment highlights the key issues addressed by the NCLT and the directions provided regarding the holding of the 10th Annual General Meeting and the appointment of a nominee Director, emphasizing compliance with the Companies Act and the necessity of timely actions by the parties involved.
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