GODREJ INDUSTRIES LIMITED Vs. STATE

JUDGEMENT

(1.) FOLLOWING the recent extensive amendments to the Companies Act, 1956 and bringing into force of various sections of the Companies Act, 2013, a question has been raised in this Company Summons for Direction, viz., whether in view of the provisions of Section 110 of the Companies Act, 2013 ( ''the 2013 Act '') and SEBI Circular dated 21st May 2013, a resolution for approval of a Scheme of Amalgamation can be passed by a majority of the equity shareholders casting their votes by postal ballot, which includes voting by electronic means, in complete substitution of an actual meeting. In other words, whether the 2013 Act, read with various circulars and notifications, has the effect of altogether eliminating the need for an actual meeting being convened.

(2.) IN the facts peculiar to the present case, an actual meeting may not be necessary. Yet, this order is necessitated because the application as original made in this Company Scheme for Directions sought precisely such a dispensation. This is an issue that is likely to recur in several matters; hence this order.

(3.) BEFORE I discuss these provisions, I must note that in principle the apparent legislative intent in providing for postal ballots and electronic voting is not only unexceptionable but entirely salutary: it is clearly directed toward greater inclusiveness and encouraging more shareholders to vote. It would seem, although this is anecdotal and there is no empirical data before me, that in many meetings, where postal ballot or electronic voting have not been provided, the attendance of members of shareholders and members attending is very low. Sometimes, this is because a shareholder has to travel a great distance to attend the meeting or because these meetings are held at inconvenient location. Shareholders are often dispersed throughout the country and find it difficult to attend such meetings in person.