Explanatory statement

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 January 2012
Dear Sir,
Please request you to reply as soon as possible.
Mine is a query relating to interpretation.

If a public company has passed spl resolution in its AGM and the explanatory statement to the same states something more(as the background for the resolution), can this explanatory statement be challenged if there is no such clause in the resolution as such.
Pls reply with some supporting reference.
Thanks and Regards

Charu Srivastava

Charu Srivastava (Expert)
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18 January 2012 The concept of explanatory statement is to disclose the material facts and the interest of Director in the special business to be transacted.

Yes it can be challenged because explanatory statement to the special business is mandatory which gives details about the resolution.

other views are solicited.

Querist : Anonymous

Querist : Anonymous (Querist)

19 January 2012 Thank you Charu....

Bur there is nothing in the act for this.Isn't it the resolution only that is enforceable?

Pls reply

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Charu Srivastava

Charu Srivastava (Expert)
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19 January 2012 The provisions of SEction 173 is madatory and not directory and any disobedience of the act shall nullify the action taken.

case law in regard to above:- Firesstone tyre and rubber co. v Synthectics and Chemicals limited.