The Board of Directors of All India Tyre Manufacturers Association Ltd., passed a resolution to the effect that no member who is indulging in activities detrimental to the interests of the Company be permitted to examine

According to rule 14(1) of the Companies (Management and Administration) Rules, 2014 read with section 94(2) of the Companies Act, 2013, the registers and indices maintained pursuant to section 88 of the Companies Act, 2013 and copies of returns prepared pursuant to section 92 of the Companies Act, 2013, shall be open for inspection during business hours, at such reasonable time on every working day as the board may decide, by any member, debenture holder, other security holder or beneficial owner without payment of fee and by any other person on payment of such fee as may be specified in the articles of association of the company but not exceeding fifty rupees for each inspection. According to section 119(1) of the Companies Act, 2013, the books containing the minutes of the proceedings of any general meeting of a company or of a resolution passed by postal ballot, shall: (a) be kept at the registered office of the company; and (b) be open, during business hours, to the inspection by any member without charge, subject to such reasonable restrictions as the company may, by its articles or in general meeting, impose, so, however, that not less than two hours in each business day are allowed for inspection. According to section 119(3) of the Act, if any inspection under section 119(1) is refused, or if any copy required under section 119(2) is not furnished within the time specified therein, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees for each such refusal or default, as the case may be. According to section 119(4) of the Companies Act, 2013, in the case of any such refusal or default, NCLT may, without prejudice to any action being taken under section 119(3) of the Act, by order, direct an immediate inspection of the minute-books or direct that the copy required shall forthwith be sent to the person requiring it. In the circumstances given in the questions, the Board of Directors of All India Tyre Manufacturers Association (the company) passed a resolution which is not in line with the requirements of the above referred provisions of the Companies Act, 2013 as Section 94 does not allows placing any restrictions (except a fee) on inspection of Registers & Returns etc., and Section 119 clearly provides that reasonable restrictions on inspection of minutes can be placed only through the Articles or the resolution of the general meeting with a condition that not less than two hours in each business day are allowed for inspection. The company has also refused the inspection on the basis of above said Board Resolution. Accordingly, the refusal of the company is not valid. The company is liable under section 119(3) of the Act and NCLT may by order, direct an immediate inspection of the minute-books or direct that the copy required shall forthwith be sent to the person requiring it. The aggrieved member may approach NCLT against the refusal.