Board Cannot Refuse Valid Requisition For EGM, Cannot Judge Its Legality: NCLT Kochi

The National Company Law Tribunal (NCLT) at Kochi has held that a company's Board of Directors is bound to convene an Extraordinary General Meeting (EGM) once it receives a valid requisition under the Companies Act.

The tribunal observed that the Board cannot examine the legality, correctness, or genuineness of such a requisition before acting on it.

A bench of Judicial Member Vinay Goel and Technical Member Ravichandran Ramasamy held, “The Board cannot assume the role of a court or Tribunal to examine and determine the legality, correctness, propriety, or genuineness of the requisition, instead of discharging its statutory obligation to convene the meeting.”

Hiras K.M., the Managing Director of Pearl City Marine Products Private Limited and a shareholder holding a 15.42% stake, approached the tribunal under Section 98 of the Companies Act. He sought directions to convene an EGM after the company's Board declined to act on his requisition.

According to Hiras, he issued a requisition notice on January 20, 2026 seeking the appointment of Velliyattil Muhammed Haneefa Abuthahir and Velliyattil Muhammed Haneefa as directors. This was placed before a board, that voted against it.

Hiras argued that the Board's refusal made it impracticable to convene the EGM through the ordinary statutory process.

The company opposed the plea, contending that no such impracticability existed. It argued that Hiras could have convened the meeting himself under Section 100(4) of the Companies Act.

Examining Section 100 of the Companies Act, the tribunal held, “A plain reading of Section 100 of the Companies Act, 2013, reveals that it is mandatory for the Board of Directors to call an Extraordinary General Meeting (EGM) upon receipt of a valid requisition. In the event of its failure to do so, the requisitionists are entitled to convene such meeting themselves in accordance with Section 100(4) of the Act.”

The tribunal further held, “Once the requisition is otherwise within the ambit of Section 100 of the Companies Act, 2013, and satisfies the requirements prescribed therein, the Board is bound to act upon it.”

Referring to the Board's decision to reject the requisition, the tribunal held that it had acted beyond the scope of its authority and exercised a discretion that the law did not confer.

The tribunal also examined whether Hiras could realistically convene the meeting himself. It noted that he did not have custody of the company's statutory registers, records, and other documents required to hold a legally valid EGM.

The ongoing disputes between rival groups within the company further added to the practical difficulty.

On this aspect, the tribunal observed, “The element of impracticability is to be seen from the angle of the person who is required to call or who is to shoulder the responsibility for convening the meeting, and not from the point of view of the other side. In such circumstances, this Tribunal considers it appropriate to exercise the powers conferred upon it under Section 98 of the Companies Act, 2013, read with Rule 75 of the NCLT Rules, 2016.”

Allowing the petition, the tribunal directed that the EGM be convened within two months. It also appointed an independent Chairman and a Scrutinizer to conduct and supervise the meeting in accordance with the Companies Act.

For Petitioner: Senior Advocate Joseph Kodianthara and Advocate Chandapillai Abraham

For Respondents: Dr. K.S Ravichandran, PCS, Advocate Akhil Suresh and Representative of ROC