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2025 Supreme(Online)(NCLT) 22
NATIONAL COMPANY LAW TRIBUNAL
Shri Prabhat Kumar, Shri V.G. Bisht, JJ
SUMMAN KISHANCHAND AGGARWAL – Appellant
Versus
SANTOSH DEVI AGARWAL – Respondent
IA(Companies.Act) - 8/2025
For the Petitioner:DHAVAL VUSSONJI
For the Respondent:TUSHAR A GORADIA
The Tribunal set aside the AGM proceedings due to significant procedural violations, emphasizing the necessity for transparency and compliance with statutory voting requirements.
Headnote:(A) Companies Act, 2013 - Sections 241, 242, 100(2)(a), 115, 169, and 160 - Application filed to quash resolutions of 88th AGM due to alleged procedural lapses and misconduct - Tribunal directed to set aside AGM proceedings, citing lack of adherence to voting procedures and transparency issues. (Paras 1, 7.1, 8)
(B) Corporate Governance - The conduct of meetings must ensure transparency and fairness, and all voting procedures should adhere strictly to statutory requirements. (Paras 7.1, 7.9)
(C) Authority of Chairman and Scrutinizer - Their role is to oversee compliance with statutory norms during the AGM, and any discrepancies may invalidate the results. (Paras 7.2, 7.9)
Facts of the case:
The applicant challenged the resolutions passed at the AGM held on 16th December 2024, alleging procedural lapses including inadequate verification of voter identity and improper handling of proxy votes.
Findings of Court:
The Tribunal found substantial procedural flaws in the AGM that compromised the integrity of the voting process, necessitating a new meeting.
Issues: The court addressed whether the AGM was conducted in compliance with the Companies Act and if the voting process was valid.
Ratio Decidendi: The Tribunal ruled that the AGM lacked proper adherence to voting procedures, leading to the conclusion that the resolutions passed could not be upheld.
Result: Proceedings of the 88th AGM and the resolutions passed therein are set aside, and a new meeting is to be convened by 30th April 2024.
ORDER
1. This Application IA 8/2021 is filed by Summan Aggarwal (Applicant), the Original Respondent No. 3 & 4 in CP 83/2024 under Rule 11 of NCLT Rules, 2016, seeking following reliefs:
a. To quash and set aside the resolutions purportedly approved in the 88th AGM of Respondent No.1 Company held on 16th December 2024 as provided in the report submitted by the Scrutinizer on 18th December 2024 with respect to 88th AGM;
b. To quash and set aside the Report submitted by the Scrutinizer on 18th December 2024 with respect to the 88th AGM of Respondent No.1 Company;
c. Declare the voting process conducted during the 88th AGM of Respondent No.1 Company on 16th December 2024 as invalid due to the procedural lapses and misconduct;
d. Direct revoting on the agenda items mentioned in the Notice dated 22nd November 2024 and Addendum Notice dated 12th December 2024;
e. To appoint an Administrator/ Special Director to manage, administer and control the affairs of Respondent No.1 Company;
f. Pending the hearing of this Application and the Company Petition, be stay the effect, operation and implementation of the resolutions purportedly approved in the 88th AGM of Respondent No.1 Company held on 16th December 2024 as provided in the report submitted by the Scrutinizer on 18th December 2024 with respect to 88th AGM;
g. Pending the hearing of this Application and the Company Petition, the Petitioners be restrained from acting in furtherance of and/or taking any steps whatsoever pursuant to the resolutions purportedly approved in the 88th AGM of Respondent No.1 Company held on 16th December 2024 as provided in the report submitted by the Scrutinizer on 18th December 2024 with respect to 88th AGM;
h. Pending the hearing and final disposal of the Application and this Company Petition, the ROC be restrained from taking any action and /or levying penalty against the Respondent No. 1 Company and the Applicants;
i. Interim and ad-interim reliefs in terms of prayer clause (a) & (h);
j. For such further and other appropriate orders, reliefs and directions as this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of this case;
2. A Company Petition 83/2024 was filed by 110 Shareholders of the Respondent No. 1 Company alleging oppression and mismanagement in terms of Section 241 & 242 of the Companies Act, 2013 . In terms of this petition, amongst others, the petitioners had called upon Respondent Nos.2 to 4 to hold an Extraordinary General Meeting of Respondent No.1 under the provisions of the Act and under the supervision and aegis of this Tribunal pursuant to Section 100(2)(a) of the Act and the applicable rules.
3. Subsequent to filing of this Petition, four Petitioners viz. Petitioner Nos. 28, 32, 97 and 105, holding 1.33% of the issued and paid-up capital of Respondent No. 1 Company, withdrew from the Petition for the reason that their consents to file the Petition were invalidly obtained. Consequently, the remaining Petitioners hold 20.67% of the issued and paid up capital of Respondent No. 1 Company.
3.1. During the hearing of the Petition on 20th September 2024, the Petitioners pressed for directions from the Tribunal to convene AGM on or before 31st October 2024.
Accordingly, the Tribunal vide its Order dated 20th September 2024, directed Respondent No.1 Company to convene its 88th AGM on or before 31st October 2024, and to issue Notice to the shareholders of Respondent No.1 Company for the said AGM.
3.2. On 18th September 2024, the Respondent No.1 Company had filed an Application before the Registrar of Companies, Mumbai (“ROC”) seeking an extension for conducting the AGM which was due on 30th September 2024. The ROC vide its Order dated 25th September 2024, was pleased to grant Respondent No.1 Company an extension of three (3) months from the due date for conducting the AGM i.e. till 31st December 2024.
3.3. This petition was listed on 8th October 2024 upon mentioning of the Respondent No. 3, to seek extension in time period allowed by th
