Section 98 of Companies Act 2013 Power of Tribunal to Call Meetings of Members, etc

(1) If for any reason it is impracticable to call a meeting of a company, other than an annual general meeting, in any manner in which meetings of the company may be called, or to hold or conduct the meeting of the company in the manner prescribed by this Act or the articles of the company, the Tribunal may, either suomotu or on the application of any director or member of the company who would be entitled to vote at the meeting,—

(a) order a meeting of the company to be called, held and conducted in such manner as the Tribunal thinks fit; and

(b) give such ancillary or consequential directions as the Tribunal thinks expedient, including directions modifying or supplementing in relation to the calling, holding and conducting of the meeting, the operation of the provisions of this Act or articles of the company:

Provided that such directions may include a direction that one member of the company present in person or by proxy shall be deemed to constitute a meeting.

(2) Any meeting called, held and conducted in accordance with any order made under sub-section (1) shall, for all purposes, be deemed to be a meeting of the company duly called, held and conducted.

Interpretation:

1. “If for any reason it is impracticable”
   • Interpretation:
     This clause covers situations where it becomes impossible or extremely difficult to convene a meeting by following the usual process outlined in the Act or the company’s articles of association.
     • Examples of impracticability:
       • Deadlock among directors.
       • Disputes among shareholders.
       • Lack of quorum.
   • Case Law:
     Rajahmundry Electric Supply Corporation v. A. Nageshwara Rao (1956 AIR 213)
     • Facts: Shareholders could not convene a meeting due to disputes among themselves.
     • Judgment: The Court held that where it is impracticable to call a meeting as per the prescribed procedures, the Tribunal’s intervention is justified.
2. “To call a meeting of a company, other than an annual general meeting”
   • Interpretation:
     This limits the Tribunal’s power under this section to meetings other than AGMs. AGMs are governed by separate provisions under Section 96.
   • Tribunal can intervene for extraordinary general meetings (EGMs) or class meetings.
3. “In any manner in which meetings of the company may be called”
   • Interpretation:
     Refers to the methods prescribed by the company’s articles or under the Companies Act, 2013, for calling meetings.
   • Case Law:
     Union of India v. Allied Chemicals and Pharmaceuticals Pvt. Ltd. (1979 49 Comp Cas 189)
     • Facts: A company failed to call an EGM due to conflicts between directors.
     • Judgment: The Tribunal ordered a meeting, stating the inability of the directors to act cannot prejudice shareholders.
4. “Suomotu or on the application of any director or member”
   • Interpretation:
     • Suomotu: The Tribunal can act on its own accord if it identifies the need for a meeting.
     • Application: A director or member (with voting rights) can apply for Tribunal intervention.
   • Case Law:
     Kandla Transport and Dock Workers Union v. Board of Trustees of Port of Kandla (AIR 1975 SC 158)
     • Facts: A member applied to call a meeting to resolve a critical issue, which the company was not convening.
     • Judgment: The Court allowed the application, stating that members’ rights cannot be sidelined.
5. “Order a meeting of the company to be called, held and conducted”
   • Interpretation:
     The Tribunal has broad powers to direct not just the calling but also the manner of holding and conducting the meeting.
6. “Ancillary or consequential directions”
   • Interpretation:
     Ancillary directions include supplementary orders like modifying timelines or quorum requirements.
     • Example: Reducing the quorum to one member.
   • Case Law:
     Majority Shareholders v. Minority Shareholders (1963 2 MLJ 99)
     • Facts: The Tribunal modified the company’s quorum requirements to allow the meeting.
     • Judgment: The Court upheld the Tribunal’s power to issue such directions.
7. “Shall be deemed to constitute a meeting”
   • Interpretation:
     Meetings conducted as per Tribunal orders are legally valid, as if convened under the regular provisions of the Act.

Key Points for Legal Reference:

1. Quorum Modification:
   • Tribunal can order that a single member constitutes a valid meeting.
2. Binding Nature of Orders:
   • Any meeting called under Tribunal directives is binding on the company and its members.

Examples of Relevant Case Laws:

1. Re: El Sombrero Ltd. (1958 Ch 900)
   • Facts: Directors refused to convene a meeting despite shareholder demand.
   • Judgment: Court directed the meeting to protect shareholder rights.
2. Madan Gopal Daga v. Sachiv, Shree Geeta Bhawan Trust (2007)
   • Facts: A dispute between members prevented the calling of a meeting.
   • Judgment: The Court empowered the Tribunal to intervene and pass appropriate orders.

Comparison of Section 97 and Section 98 of the Companies Act, 2013

Disclaimer: This content is written by Chiman Soni, a CS Executive student and founder of Corporate Laws Hub. The information provided herein is for educational and informational purposes only and should not be construed as legal advice or financial advice. While every effort has been made to ensure the accuracy and reliability of the information, readers are advised to consult a qualified legal professional, financial advisor, or refer to authoritative sources for specific legal or financial queries or concerns.