Fortune Ltd proposes to draw a term loan of ₹20 Crore from Life Insurance Corporation. The Company owns a property comprising of land and buildings valued at ₹100 Crore. As per the sanction letters issued by the lender,

Resolution under Section 180(1)(a) of the Companies Act, 2013 for creating a charge on company's assets Kind of Meeting: Shareholders meeting Type of Resolution: Special Resolution To consider and, if thought fit, to pass with or without modification(s), the following resolution as a special resolution: "RESOLVED THAT consent of the Company be and is hereby accorded in terms of Section 180(1)(a) and other applicable provisions, if any, of the Companies Act, 2013 to mortgaging and / or charging by the Board of Directors of the Company by way of equitable and / or legal mortgage on immovable property of the Company, both present and future, represented by land and buildings more specifically described in the loan agreement document signed by the Company with Life Insurance Corporation, together with power to take over the assets of the Company in certain events, to or in favor of Life Insurance Corporation of India (LIC) by way of first pari passu charge to secure the term loan of ₹20 Crore granted to the Company, together with interest at the agreed rate payable by the Company under the loan agreements, hypothecation deeds and other documents executed or to be executed by the Company in respect of the term loans from LIC. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorized to finalize with Life Insurance Corporation, the documents for creating the aforesaid mortgage or charge and to do all acts, deeds and things as may be required for giving effect to the above resolution. Explanatory statement: Life Insurance Corporation of India (LIC) have sanctioned term loan of ₹20 Crore to the company. This loan is to be secured by first charge on immovable property of the Company, both present and future, represented by Land and Buildings owned by the Company, in the manner as may be required by LIC. Such mortgage/charge shall rank first pari passu charge with the charges already created, if any, or to be created in favor of the participating institutions and banks for their assistance. Section 180(1)(a) of the Companies Act, 2013 provides inter alia, that the Board of Directors of a public company shall not, without the consent of a public company in general meeting, sell, lease or otherwise dispose off the whole or substantially the whole of any such undertaking. Mortgaging/charging of the immovable property of the Company as aforesaid to secure the term loans may be regarded as disposal of the whole or substantially the whole of the said undertaking(s) of the Company and therefore requires consent of the Company pursuant to Section 180(1)(a) of the Companies Act, 2013. The Directors recommend the resolution for approval of the shareholders as a special resolution under Section 180(1)(a) of the Companies Act, 2013. None of the directors are concerned or interested in the proposed resolutions. Notes: Section 180(1)(a) will arise only when the whole or substantially the whole of the undertaking is being sold, leased or otherwise disposed off. If the company has land, say, worth about ₹5000 crores, it may not be attract the section. Further, under Rule 22(16)(j), resolution under Section 180(1)(a) needs to be passed by postal ballot.