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CA Intermediate · Corporate and Other Laws · Management & Administration

Varuna Textiles Ltd, an unlisted public company, received a valid requisition from members holding 12% of the paid-up share capital carrying voting rights, asking the Board to call an extraordinary general meeting. The Board did nothing. Which statement states the correct legal position?

Members holding 10% or more of paid-up voting capital can requisition an EGM. If the Board fails to call it within the statutory period, the requisitionists may call the meeting themselves. Since these members hold 12%, the requisition is valid and no tribunal order is required.

  1. AThe requisitionists may themselves call the meeting if the Board fails to call it within the time allowed by lawCorrect
  2. BThe requisition is invalid because only members holding at least 25% of voting capital can requisition
  3. CThe requisitionists must first obtain an order from the NCLT before calling the meeting
  4. DThe requisitionists can only complain to the Registrar and cannot call the meeting

Explanation

Members holding at least 10% of paid-up voting capital can requisition an EGM. If the Board does not proceed to call the meeting within 21 days of receipt, the requisitionists may call it themselves within three months. The 25% figure is wrong; no NCLT order is needed.

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