Laying accounts at annual general meeting within statutory period laid down in sub‑section (3) of the section ‑ Whether mandatory on the part of board of directors - Companies Law - Circular: No. 2/85

Circular: No. 2/85 [8/1(210/220)/85 ‑ CL ‑ V], dated 20 ‑ 3 ‑ 1985. Subject:- Laying accounts at annual general meeting within statutory period laid down in sub ‑ section (3) of the section ‑ Whether mandatory on the part of board of directors Attention is invited to this Department s Circular No. 4/74, dated 22‑2-1974 (reproduced at Sl. No. 295) and it is stated that the defaults under sections 159, 166, 210 and 220 are separate offences. A plea has been raised that in accordance with the aforesaid Circular, dated 22‑2‑1974, it is possible for a company to adjourn the annual general meeting in case the accounts are not ready, without complying with the requirements of section 210. In this connection, it may be stated that it is mandatory on the part of the board of directors of the company to lay the accounts at every annual general meeting within the statutory period, laid down in sub‑section (3) thereof. in case, the annual general meeting is held in accordance with the provisions of section 166, and the accounts are not placed thereat, the same not being ready, it is no doubt open to the company concerned to adjourn the said annual general meeting to a subsequent date for laying the accounts, but then, the adjourned annual general meeting must itself be held within the statutory period [including the period of extension thereof, if any, allowed as provided in section 166(1)]. That being so, procedure of adjourning the annual general meeting cannot be so adopted as to bypass the provisions of section 210. Thus, in case the accounts are not placed at the annual general meeting or the adjourned annual general meeting, in either case, within the statutory period laid down in sub‑section (3) of section 210, the delinquent directors are liable for prosecution under sub‑section (5) thereof. In this connection, a reference may be made to a decision of the Division Bench of Calcutta High Court in Bejoy Kumar Karnani v. Asstt. Registrar of Companies 88 CWN 1073, wherein it has been held that if the said Circular dated 2‑2‑1974 is to be literally construed divorced of the provisions of sections 166 and 210 such adjournments may go on ad infinitum and in such an event not only the provisions of section 166 but also the provisions of sections 168 and 210 would be rendered nugatory, leading to chaos and confusion in the matter of enforcement of the relevant provisions of the Act by the Registrar of Companies. It is requested that the aforesaid views of the Department may be brought to the notice of your constituents, by way of further clarification to this Department s Circular, dated 2‑2‑1974.