The right given under section 169 is known at the right available in the hands of “qualified minority” of shareholders. Such of those members, as mentioned in the section, are authorized to ask the board of directors by requisition in writing to call an extraordinary general meeting of members of the company for consideration of the matters set out in the requisition.
Minimum members required to sign requisition and business to be transacted
The number of members entitled to requisition the meeting is as under:
In the case of a company not having share capital, such number of members who have at that time not less than one-tenth of the voting power of all members.
Holding a board meeting and call the extra ordinary general meeting within 21 days
In case the requisition is valid on the basis of the above conditions, action should be taken to call a board meeting within 21 days of the date of deposit of the requisition. The meeting is not later than 45 days from the date of deposit of the requisition.
Meeting called by the board within 21 days
As required in sub-section (6), if the requisition is found valid, the board shall call the general meeting within 21 days of the deposit of the requisition and should hold the meeting on a day later than 45 days from the date of deposit of the requisition.
Notice period, place of meeting, quorum, etc.
The above extraordinary meeting will be governed by the same rules as are applicable for calling and holding general meetings of the company. Thus the extraordinary general meeting will be called by giving notice of not less than 21 clear days.
Where the meeting is not called within 21 days
Where the board does not hold the extraordinary general meeting within 45 days as stated above, the meeting may be called by the requisitionists subject to the following conditions:
The extraordinary general meeting may be called by the requisitionists or by those of them who hold majority in value of the paid-up capital held by all of them or not less than one-tenth of the paid share capital.
The meeting shall be held within 3 months from the date of deposit of the requisition.
The meeting called by the requisitionists to call and hold the meeting shall be paid by the company to the requisitionists.
Expenses paid to the requisitionists to be recovered from directors in default
In terms of sub-section (9), the reasonable expenses incurred by and paid to the requisitionists in calling and holding the meeting as explained above will be recovered by the company from out of the fees or other remuneration due to or to become due from the company to the directors as were in default for non-compliance of the provision.
Section 169 applicable to all companies
The provisions of section 169 are wide in application and they apply to both public limited company and private limited company.
Section 169 vis-à-vis Section 284
We have explained above the complete statutory position allowing not less than the qualified minority of shareholders to requisition a company to hold an extra-ordinary general meeting. In this connection section 284 allows even a single shareholder to give to the company a special notice in the prescribed manner of a resolution to remove a director of the company.
Meeting called by members held bad in law
When a petition for amalgamation was filed by a company, some members who opposed the scheme proposed to requisition an extraordinary general meeting against which the company filed for injunction.
Place of holding the extraordinary general meeting
Although a general meeting other than an annual general meeting may be held at a city or place other than the place where the registration office is located, the extraordinary general meeting may be held in Bangalore or the registration office located in Bangalore or their surrounding areas.