The Board of Directors of Omega Computer Systems Limited, a listed company, consisted of twelve directors out of which the position of two directors were vacant, The Company Secretary, under the authority of the Chairman

According to Section 175 of the Companies Act, 2013, a company may pass resolutions by circulation. However, no resolution by circulation shall be deemed to have been passed unless the resolutions have been circulated in draft form together with necessary papers to all directors at their registered address in India by hand delivery or by speed post or by courier or through email. The resolution by circulation must be passed by majority of directors entitled to vote. In this case, two interested directors are not entitled to participate or vote on the resolution. As six out of eight eligible directors, have approved the resolution, in an an ordinary course, the resolution by circulation is deemed to be passed. According to Para 6.5 of SS-1, passing of Resolution by circulation shall be considered as if it had been passed at a duly convened Meeting of the Board. However, as per Para 6.3.2 of SS-1, if not less than one third of the total number of directors of the company require that a resolution must be decided only at a duly convened Board meeting, the Chairman should convene a Board Meeting to decide on the issue. Interested directors are also entitled to demand that a circular resolution be decided in a regular Board Meeting. As four directors including two interested directors have requested convening a proper Board Meeting to consider the issue which is more than 1/3rd of the current strength of the Board, the chairman has no option other than calling a Board Meeting to decide the issue.