BEFORE THE COMPANY LAW BOARD - NORTHERN REGION BENCH 

Badri Nath for the Petitioner. 

S. L. Kohli for the respondent. 

H. S. Jassi, for the Registrar of Companies, NCT of Delhi and Haryana. 

ORDER 

DR. A. K. DOSHI (Member) - This petition under section 167 of the Companies Act, 1956 (hereinafter called "the Act") has been filed by the Gates Corporation d/b/a. The Gates Rubber Co. on December 10, 1998. According to the petition, the petitioner holds 84.42 per cent. of the paid-up share capital of the company and the balance 15.58 per cent. of the paid-up capital of the company is held by five other Indian shareholders related to each other and are collectively called the "Anand" group. The petitioner is registered under the laws of the State of Colorado, United States of America and its registered office is situated at Denver, Colorado, USA. It is stated in the petition that Anand Gates (India) (P.) Ltd. (hereinafter called 'the company"), the respondent-company, was incorporated on September 29, 1995, as a private company limited by shares and the company's last annual general meeting was held on November 12, 1997. The accounts of the company for the financial year 1997-98, were closed on March 31, 1998. Therefore, pursuant to the provisions contained in clause (b) of sub-section (3) of section 210 of the Act, the company was required to hold its annual general meeting on or before September 30, 1998. 

It is stated in the petition that a board meeting was held on July 30, 1998, wherein the company's audited balance-sheet as at March 31, 1998, and profit and loss account for the year ended March 31, 1998, along with the director's report thereon were distributed to all the directors present, including Mr. Iqbal Singh Anand, chairman of the board. In the said meeting, the chairman indicated that he would require a couple of weeks to go through the accounts but agreed and approved that the annual general meeting may take place on August 28, 1998. Later on he refused to sign and approve the accounts of the company. 

In accordance with the provisions of section 166 (1) of the Act, the company is required to hold its annual general meeting every year and within fifteen months from the date of its last annual general meeting. The company's last annual general meeting was held on November 12, 1997. However, under section 210 (1) of the Act at every annual general meeting of the company, the board of directors of the company is required to lay before the company the balance-sheet and profit and loss account (hereinafter referred to as the "accounts") for the period specified in sub-section (3) of section 210. Under clause (b) of sub-section () of section 210, the accounts shall relate to the period beginning with the day immediately after the period for which the accounts were last submitted and ending with a day that shall not precede the day of the meeting by more than six months. The accounts of the company for the financial year 1997-98, were closed on December 31, 1998. Therefore, pursuant to the provisions contained in clause (b) of sub-section (3) of section 210 of the Act the company was required to hold its annual general meeting on or before September 30, 1998. 

In these circumstances the company applied under proviso 2 of sub-section (1) of section 166 to the Registrar of Companies, NCT of Delhi and Haryana, New Delhi, for extension of one month's time to hold that the annual general meeting. The Registrar of Companies extended the time to hold the annual general meeting for one month up to October 30, 1998. The company issued notices on September 28, 1998, to all members for holding the annual general meeting on October 23, 1998. No representative of the Anand group attended the annual general meeting on October 23, 1998,.and as such the annual general meeting was adjourned by one week to October 30, 1993, for lack of quorum. In accordance with articles 50 and 51 of the articles of association of the company neither a valid board meeting nor general meetings including the annual general meeting can take place without the personal presence of one member each of Gates, the petitioner and Anand. 

The Registrar of Companies in his report dated June 28, 1999, has stated that the last annual general meeting was held on November 12, 1997, therefore, the subsequent annual general meeting as per section 210 (3)(b) was required to be held on or before September 30, 1998. It appears that audited balance-sheet of the company as on March 31, 1998, along with the profit and loss account and the directors' report thereon were circulated among all the directors present in the board meeting held on July 31, 1998, including Shri Iqbal Singh Anand, chairman of the board as well as directors representing the Anand group. The Anand group have not approved the audited accounts. The Registrar of Companies has granted extension under section 166 of the Act to the company up to December 31, 1998. The Registrar of Companies has also stated that Mr. Anand, refused in writing to attend the annual general meeting either himself or by any other member of the Anand group. 

In the last hearing held on June 29, 1999, the advocate for the petitioner has stated that a default has been committed in holding-the annual general meeting. According to the provisions of the articles of association of the company no valid board meeting or general meetings including annual general meeting can take place without the personal presence of one member from each group (Gates and Anand). In order to regularise the annual general meetings intervention of the Company Law Board is required. The petitioner has sought the directions in relation to the calling, holding and conducting of the annual general meeting which may include that the presence of the petitioner only in person or by proxy be deemed to constitute a meeting and that the accounts of the company as on March 31, 1998, be approved by a majority of the directors present for adoption by the members in the annual general meeting and to conduct the remaining business as well as special business. The advocate of the respondent-company had not raised any objection to the petition. 

In the circumstances, I consider it appropriate that the annual general meeting to be convened by this order, but this order shall not escape the company and its directors from any violation committed by not holding the annual general meeting in the year 1998, and adoption of accounts as on March. 31, 1998, in terms of the provisions section 210 (3) and non-filing of respective balance-sheet and annual return of the company with the Registrar of Companies within the prescribed time under the Act. In the said annual general meeting only than ordinary business and special business as listed in the notice dated September 28, 1998, shall be transacted. 

In view of the above, it is hereby ordered that :- 

1. The company shall call the annual general meeting to be held on any working day/during working hours in the month of August, 1999. 

2. The notice for the annual general meeting shall be issued by any director representing the petitioner by registered post to all the share-holders at least twenty-one days before the date of meeting as per the requirement of law. 

3. The agenda for the meeting shall consist of only ordinary business and special business as listed out in the notice dated September 28, 1998. 

4. The quorum for the meeting shall be the number of members present in person or by proxy and even one member present in person or by proxy shall be a valid quorum. 

5. The meeting shall be chaired by such person as provided in the articles of association of the company and in the case of his absence the person so elected by the members present in the meeting. 

The chairman of the meeting shall forward a certified copy of the minutes of the meeting to this Bench within seven days of the holding of the meeting.