2018 (2) TMI 1328 - Tri - Companies Law

Seeking cancellation of Extra Ordinary General Meeting (EGM) - Held that - On perusal of the records it is found that one application under Section 8 of the Arbitration and Reconciliation Act, 1996 is pending and fixed for hearing on 09th October, 2017 which is with regard to the maintainability of the main Company Petition. Further, since the applicant has already received notice of the EGM, he/they is/are at liberty to attend the meeting and raise his/their voice, if any. As such I find no reason at this stage to pass any order to restrain holding of EGM by the respondents and if at all there is/are any illegality that can be recorded and can be raised before the bench by the applicants as and when required for redressal of their grievances since the company petition is pending.

Summary

Issues:
1. Cancellation of Extra Ordinary General Meeting (EGM) under Rule 32 of NCLT Rules, 2016.
2. Violation of provisions of Section 102(1)(a) of the Companies Act, 2013.
3. Lack of disclosure regarding interest of key managerial personnel.
4. Alleged violation of Section 102(3) of the Companies Act, 2013.
5. Refusal of inspection of documents by respondents.
6. Attempt to ratify past meetings through the EGM.
7. Timing of the application challenging the EGM.
8. Respondents' argument regarding statutory requirement of the EGM.
9. Legal precedents cited by both parties.

Analysis:
1. The petitioner sought cancellation of an EGM under Rule 32 of NCLT Rules, 2016, alleging violations of the Companies Act, 2013. They claimed that the notice of the EGM did not comply with the law and failed to disclose the interests of key managerial personnel. Additionally, they accused the respondents of not providing access to necessary documents for shareholders to make informed decisions.

2. The respondents, on the other hand, argued that the EGM notice was served in advance and that the petitioner's last-minute application did not allow sufficient time for a response. They contended that the EGM was a statutory requirement and refraining from holding it would cause irreparable harm to the company.

3. The Tribunal noted that an application under Section 8 of the Arbitration and Conciliation Act, 1996, challenging the main Company Petition's maintainability was pending. Since the petitioner had received notice of the EGM, they were free to attend and raise concerns at the meeting. The Tribunal found no immediate reason to restrain the EGM and advised the petitioner to address any legal issues during the pending company petition.

4. Legal precedents were cited by both parties to support their arguments, with the Tribunal acknowledging the relevance of each case's merit. Ultimately, the Interim Application seeking to cancel the EGM was disposed of based on the pending arbitration application and the petitioner's ability to address any grievances during the EGM or through the ongoing company petition.