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CA Intermediate · Corporate and Other Laws · Management & Administration

Kaveri Components Ltd, an unlisted public company, receives a valid demand from members holding one-tenth of the paid-up share capital carrying voting rights, requisitioning an extraordinary general meeting. The Board takes no action within the statutory period of 21 days from receipt of the requisition to call the meeting. What may the requisitionists do?

The requisitionists may call and hold the meeting themselves within three months of the date of the requisition, and the company must reimburse their reasonable expenses. Tribunal permission is not required, and they are not limited to complaining to the Registrar.

  1. ACall the meeting themselves, within three months from the date of the requisition, and recover reasonable expenses from the companyCorrect
  2. BOnly file a complaint with the Registrar and wait for the Board to act
  3. CCall the meeting themselves, but only after obtaining prior permission from the Tribunal
  4. DCall the meeting at any time within one year, with expenses borne by themselves

Explanation

On a valid requisition, the Board must call the meeting within 21 days to be held within 45 days of receipt. If it fails, the requisitionists may call the meeting themselves, within three months of the date of requisition. Reasonable expenses are reimbursed by the company, which may recover them from the defaulting directors' fees. Tribunal permission is not needed.

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