17 November 2010
Hi... Section 288 of the Companies Act, 1956 provides that a Board Meeting adjourned for want of quorum can't be held on a Public Holiday! Now as per section 2(38) of the Companies Act, Public Holiday means as defined in the Negotiable Instruments Act, 1881. Section 25 of the Negotiable Instruments Act, 1881 defines Public Holiday to include Sunday and any other day declared by the Central Government or State Government to be a Public Holiday.
Suppose a Board Meeting is scheduled to be held on 17.11.2010(Wednesday). On the day of the meeting, adequate quorum was not present and the meeting was adjourned to next Wednesday. On Friday, the State Government declared Wednesday to be Public Holiday. My query is whether this declaration by the State Government will be treated as a Public Holiday?????? and the Board Meeting can be held on Wednesday or not??????????
Now, proviso to section 2(38) provides that any day declared by the Central Government as Public Holiday shall not be treated as such if the declaration is made after the issuance of the notice of the Meeting and the Board Meeting held on such declared Public Holiday will be valid. The Act is silent on the declaration made by the State Government.
17 November 2010
Your observation is highly appreciated. However, the power to declare any day as public holiday is also vested with state government vide Ministry of Home Affairs Notification No 20-25/26/Pub-1 dated 8/6/1957. In view of that, no distinction may be made, as per my understanding, for central / state though the word" state "is absent in the proviso to section 2(38) of the Companies Act,1956.
CAclubindia
