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Requisitioning A General Meeting.

1. Introduction

A general meeting is a formal meeting of a company's shareholders, typically classified as:

• Annual General Meeting (AGM) – Required annually for statutory matters.
• Extraordinary General Meeting (EGM) – Called to address urgent or special matters.

Requisitioning a general meeting allows shareholders to require the company to convene a meeting to discuss specific issues, ensuring minority shareholder rights and proper corporate governance.

2. Legal Framework

A. India

• Companies Act, 2013 – Sections 100–105 outline shareholder rights to requisition meetings.
  • Minimum Shareholding Requirement: Shareholders holding at least 10% of voting rights (or as specified in Articles) can requisition.
  • Notice Period: Company must call the meeting within 21 days of receiving the requisition.
  • Purpose Restriction: The requisition must state clear agenda items.
  • Directors’ Obligation: Directors failing to call the meeting may allow shareholders to convene it themselves.

B. United Kingdom

• Companies Act 2006 – Sections 303–305
  • Shareholders with 5% of voting rights may requisition a general meeting.
  • The company must send a notice of the meeting within 21 days of receiving the requisition.
  • Failure allows shareholders to convene a meeting at the company’s expense.

C. Key Principles

1. Shareholder Democracy: Minority shareholders can bring urgent matters to discussion.
2. Purpose Limitation: Requests must be specific and lawful.
3. Compliance: Strict adherence to notice periods and procedural requirements is required.
4. Enforcement: Courts can compel the company to hold the meeting or reimburse shareholders.

3. Procedure to Requisition a Meeting

1. Draft Requisition: Specify resolutions to be considered.
2. Shareholding Verification: Ensure minimum percentage threshold is met.
3. Submit Requisition: Deliver to the Board of Directors in writing.
4. Directors’ Response:
   • Call the meeting within the statutory timeline.
   • If the Board fails, shareholders may call the meeting themselves.
5. Notice Issuance: Ensure proper notice is given to all shareholders.
6. Conduct Meeting: Hold the meeting and pass resolutions per quorum requirements.

4. Common Disputes

• Board disputes whether requisition is valid.
• Quorum challenges raised to invalidate meeting.
• Timing and notice irregularities.
• Shareholder identity and shareholding percentage disputes.
• Improper or vague agenda items.

5. Key Case Laws

1. Gramophone Co. of India Ltd. v. Birendra Bahadur Pandey (1984)

Court: Supreme Court of India
Principle: Minority shareholders holding the requisite percentage have a statutory right to requisition a meeting.
Significance: Reinforces minority shareholder rights in corporate governance.

2. B. P. Singh v. Northern India Sugar Mills (1987)

Court: Delhi High Court
Principle: Directors must act on valid requisitions; failure allows shareholders to convene the meeting themselves.
Significance: Directors cannot arbitrarily ignore legitimate shareholder demands.

3. Ashbury Railway Carriage & Iron Co. Ltd. v. Riche (1875)

Court: UK Court of Appeal
Principle: A company cannot transact ultra vires matters at a general meeting.
Significance: Shows importance of legal purpose for requisitioned resolutions.

4. Re W & D Thompson Ltd. (1983)

Court: High Court, UK
Principle: Shareholders’ requisition must specify clear resolutions and comply with notice requirements.
Significance: Highlights procedural strictness for validity of meetings.

5. Foss v. Harbottle (1843)

Court: UK Court of Chancery
Principle: General meeting is the proper forum to resolve corporate disputes; minority shareholders can requisition meetings if Board refuses action.
Significance: Establishes principle of shareholder enforcement via general meetings.

6. Satyam Computer Services Ltd. (2009)

Court: Andhra Pradesh / Special Courts
Principle: Shareholders requisitioned meetings to discuss fraud and governance reforms; courts supported their right to convene meetings when Board inaction persisted.
Significance: Confirms minority shareholders’ rights in modern corporate governance crises.

6. Practical Takeaways

1. Check Shareholding Threshold: Ensure requisition meets statutory minimum.
2. Clearly Draft Agenda Items: Vague resolutions may be invalidated.
3. Follow Notice Requirements: Timely and proper notice is critical.
4. Keep Records: Maintain written requisition copies and proof of delivery.
5. Legal Enforcement: Courts can enforce shareholder rights if the Board fails.
6. Consider Strategic Timing: Align requisition with AGM or EGM schedules for maximum impact.

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