30 November 2012
A private company's AGM was due to be held by 30 Sep 2012. It could not be held so MD sought two months extension from CLB which was granted. Even after two months AGM could not be held. Now if the AGM is held, without any further permissions from CLB, another one month later, and the report then filed, what will be the consequence? Will there be a warning, or penalty, or anything more severe? Thank you.
01 December 2012
In case of default in holding an annual general meeting, the following are the consequences :-
Any member of the company may apply to the Company Law Board. The Company Law Board may call, or direct the calling of the meeting, and give such ancillary or consequential directions as it may consider expedient in relation to the calling, holding and conducting of the meeting. The Company Law Board may direct that one member present in person or by proxy shall be deemed to constitute the meeting. A meeting held in pursuance of this order will be deemed to be an annual general meeting of the company. An application by a member of the company for this purpose must be made to the concerned Regional Bench of the Company Law Board by way of petition in Form No. 1 in Annexure II to the CLB Regulations with a fee of rupees fifty accompanied by (i) affidavit verifying the petition, (ii) bank draft for payment of application fee.
Fine which may extend to Rs. 5,000 on the company and every officer of the company who is in default may be levied and for continuing default, a further fine of Rs. 250 per day during which the default continues may be levied.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
01 December 2012
Thank you. Any more views are welcome.
Where the company has defaulted under section 156 and/or 210 of the Companies Act, 1956, that is, where they have not held the annual general meeting and/or have not placed the balance sheet and the profit and loss account before the annual general meeting, prosecutions are rarely launched. The fact that the complaint has to be filed in the court of first class Magistrate having territorial jurisdiction over the place at which the Registered office of the company is situated, which is at the place other than the Head Quarter of the Registrar need not prevent the Registrar from enforcing the penal provision in this regard. Section 168 contains penal provision for not complying with the provisions of section 166 or 167. It provides that if default is committed in holding the annual general meeting of the company, the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs. 50,000 and if the default is continuing one then with further fine extending upto Rs. 2,500 for every day after the first day during which the default continues. However, if the books of accounts have been ceased by the police and produced in criminal court, the default is beyond the control of the company and should not be punished. Failure to hold the meeting in each calendar years is a separate offence different from failure to had it within 15 months of the earlier meeting. In State of Kerela v West Coast Planters Agencies (P) Ltd. (1958) 28 Comp Cas. 13 (Ker) (DB) it was held that where there was only a single member in a company then not holding the AGM would not amount to a default. In ROC v Krishna Nambiar (1958) Comp Cas 225, it was held that if there was any default in holding AGM the company immediately becomes punishable but for an officer of the company to be punished it is necessary to prove that he was knowingly responsible for the default.
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