Jewel Ltd. called its annual general meeting on 25th September, 2015. At the meeting, the required quorum was present. The meeting started transacting the business slated on the agenda. After completion of few agenda ite
CS Professional · Advanced Company Law and Practice · PYQS · December 2015
Jewel Ltd. called its annual general meeting on 25th September, 2015. At the meeting, the required quorum was present. The meeting started transacting the business slated on the agenda. After completion of few agenda items, the Chairman of the company adjourned the meeting on his own without seeking the consensus of the members of the company present at the meeting. The Chairman further stated that the adjourned meeting shall be scheduled at a later date to be decided by the Board of directors. You being a corporate professional, examine the validity of the Chairman's decision to adjourn the meeting. Also explain the powers of the Chairman in this regard.
Answer & Explanation:
Adjournment of a meeting means the deferring or suspending the meeting to a future time, either at an appointed date or indefinitely or as decided by the members present at the scheduled meeting. For a valid adjournment of a General Meeting, the holding of the Meeting at its scheduled time is necessary. It may be adjourned after some items of business have been transacted and the remaining items can be transacted at the adjourned meeting. Once a meeting is called, the Chairman cannot adjourn it arbitrarily. Its continuance or adjournment rests entirely on the will of the members. If a Chairman vacates the Chair or adjourns the meeting regardless of the views of the majority, those remaining, even if a minority, can appoint a Chairman and conduct the business left unfinished by the former Chairman ('Catesbyv. Burnett, (1916) 2 Ch. 325 (Ch.D)') Where a meeting is unlawfully adjourned by the Chairman thinking that he is not likely to succeed in his object, the remaining members possess the right to continue the meeting and conduct the business left un-transacted by the Chairman ('Seth Sobhag Mai Lodha v. Edward Mills Co. Ltd. (1972) 42 Com Cases 1 at 18 (Raj.)') Further in case of 'United Bank of India Ltd. v. United India Credit and Development Corporation Ltd. (1977) 47 Com Cases 689', it was held that every Chairman has the right to make a bona fide adjournment whilst a poll or other business is proceeding, if circumstances of violent interruption make it unsafe or seriously difficult for the members to tender their votes. Therefore, though the Chairman has power to adjourn the meeting on its own but only in exceptional cases where it becomes extremely difficult to continue because of violent interruption and continuing the meeting will be unsafe.
Topics: General Meetings
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