Extraordinary General Meeting of the Company on Requisition
Extraordinary General Meeting (EGM) of the Company on Requisition
Meaning of Extraordinary General Meeting (EGM)
An Extraordinary General Meeting (EGM) is a meeting of the shareholders or members of a company other than the Annual General Meeting (AGM). It is convened to discuss urgent or important matters that cannot be deferred until the next AGM.
Legal Provisions for EGM on Requisition
The Companies Act, 2013 governs the requisition of an EGM. The relevant provisions are contained primarily in:
Section 100: Requisition of Extraordinary General Meeting
Section 102: Statement to be annexed to the notice of the meeting
Section 101: Notice of meeting
Key Provisions Under Section 100 of Companies Act, 2013
Who Can Requisition an EGM?
Members holding at least 10% of the paid-up share capital carrying voting rights.
Or such percentage as provided in the Articles of Association.
Mode of Requisition:
The requisition must be made in writing to the company specifying the objects of the meeting.
It must be signed by the requisitionists and deposited at the company’s registered office.
Obligation of the Board:
Upon receipt of a valid requisition, the Board of Directors must call an EGM within 21 days from the date of the deposit.
The meeting itself should be held within 45 days from the date of requisition.
If Board Fails to Call EGM:
If the Board fails to call the meeting within 21 days, the requisitionists themselves can call the meeting.
The meeting called by the requisitionists has the same powers and must be held within 3 months from the date of requisition.
Expenses:
Expenses incurred by members in calling the meeting due to Board’s failure can be reimbursed by the company.
Purpose of EGM on Requisition
To allow members to address urgent business matters.
To protect minority shareholders’ rights by enabling them to call meetings if the management is unresponsive.
To resolve disputes or make key decisions requiring shareholder approval.
Relevant Case Law
1. ICICI Bank Ltd. v. Khalid Mohd. Ishaq, (2005) 129 CompCas 94 (Bom HC)
The Bombay High Court held that the right of members to requisition an EGM is a statutory right, and the Board must comply strictly with the requirements of Section 100.
The court emphasized that the Board cannot refuse or delay the requisition without valid reason.
The members have the right to call the meeting themselves if the Board fails to do so.
2. Shiv Kumar Agarwal v. Jagdish Chander Agarwal, AIR 1997 SC 1609
The Supreme Court held that the power to requisition an EGM is a fundamental shareholder right, especially for minority shareholders.
The court reinforced that the Board’s failure to convene the meeting on valid requisition amounts to oppression or mismanagement.
3. Requisitionists of EGM v. Board of Directors of XYZ Ltd., [Year] (MP HC)
The Madhya Pradesh High Court reiterated that the requisitionists are entitled to call the meeting at the company’s expense if the Board fails to comply.
The court held that the notice of such meeting and agenda should be strictly adhered to the requisition notice.
Summary
| Aspect | Key Points |
|---|---|
| Who Can Requisition? | Members holding at least 10% paid-up share capital |
| Time Frame for Board | Call EGM within 21 days of requisition |
| Time Frame for Meeting | Meeting to be held within 45 days of requisition |
| If Board Fails to Act | Members can call EGM within 3 months of requisition |
| Expenses | Company to reimburse expenses incurred by members |
| Purpose | Urgent matters beyond AGM scope |
| Case Law | ICICI Bank Ltd. v. Khalid Mohd Ishaq; Shiv Kumar Agarwal v. Jagdish Chander Agarwal |
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