The Supreme Court on Tuesday sought responses on a challenge to an August 17 order of the National Company Law Appellate Tribunal (NCLAT) on the circumstances in which the National Company Law Tribunal (NCLT) can direct the convening of an extraordinary general meeting (EGM).
A Bench of Justice K V Viswanathan and Justice Arun Palli issued notice and posted the matter for November 6.
The NCLAT had held that the NCLT’s power under Section 98 of the Companies Act, 2013 (power of tribunal to call meetings of members), was exceptional and could be exercised only when it was established that convening the meeting without tribunal intervention had become impracticable.
Senior Advocate C Aryama Sundaram, appearing for the appellant with Advocate Atul Shankar Vinod, argued that the issue was one of impracticability rather than impossibility.
“It’s a question of impracticability, not impossibility,” Sundaram submitted.
He argued that Sections 98 and 100(4) provided independent remedies and Section 98 could not be made conditional on first invoking Section 100(4), which allows the calling of an extraordinary general meeting.
“Section 98 has been recognised rightly so, not to be dependent on 100 at all. 100(4) and 98 are open,” he said.
Sundaram submitted that although Section 100(4) allows requisitionists to convene an EGM themselves when the Board fails to do so, they required the company’s cooperation and access to records, including the shareholders’ list, to issue notices and conduct the meeting.
“I need that cooperation for a 100(4) meeting to requisition myself. You have rejected my application for me to conduct it myself. At the very least, I need a shareholders’ list,” he said.
He also relied on the 3:2 division of the five-member Board, arguing that his clients, despite holding about 54 per cent of the general body, were in a minority on the Board and lacked access to the company’s records and infrastructure.
Advocate Thushara James, appearing for the respondents, argued that Section 100(4) provides a statutory mechanism for requisitionists to convene the meeting themselves.
“100(4) is a statutory mechanism, which provides for the requisitionists to call for the meeting themselves, irrespective of what the Board says or not,” she submitted.
Justice Viswanathan observed, “If you’re refusing to convene a meeting under 100(2), then the route is clear. They can then go under 100(4).”
The dispute arose in Pearl City Marine Products after two directors were removed at an EGM in November 2025. A subsequent proposal for their re-induction was rejected by the Board in a 3:2 vote on February 9, 2026.
The NCLT’s Kochi Bench allowed a Section 98 plea seeking an EGM. The NCLAT overturned that order, holding that the 3:2 Board split and the existence of around 110 other shareholders did not establish impracticability, particularly when the requisitionists had not attempted the Section 100(4) route.
