QUORUM IN ADJOURNED MEETING


According to Section 103(1), unless the articles of the company provide for a larger number,—

  1. in case of a public company,—
    1. five members personally present if the number of members as on the date of meeting is not more than one thousand;
    2. fifteen members personally present if the number of members as on the date of meeting is more than one thousand but up to five thousand;
    3. thirty members personally present if the number of members as on the date of the meeting exceeds five thousand;
  2. in the case of a private company, two members personally present,

shall be the quorum for a meeting of the company.

Standard related to adjournment of general meeting are given in Paragraph 15 of the Secretarial Standard on General Meeting (hereinafter called SS – 2).

According to Standard 15.1 of SS – 2, a duly convened Meeting shall not be adjourned unless circumstances so warrant. The Chairman may adjourn a Meeting with the consent of the Members, at which a Quorum is present, and shall adjourn a Meeting if so directed by the Members. It further adds; meetings shall stand adjourned for want of requisite Quorum. The Chairman may also adjourn a Meeting in the event of disorder or other like causes, when it becomes impossible to conduct the Meeting and complete its business.

Accordingly; Chairman may adjourn a meeting:

  • For want of quorum,
  • In event of disorder or like causes,
  • With consent of member, when circumstances warrant, or
  • So directed by (majority of) members.

Meeting adjourned for want of quorum:

According to Sub – section (2) of Section 103, if the quorum is not present within half-an-hour from the time appointed for holding a meeting of the company—

(a) the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine; or

(b) the meeting, if called by requisitionists under section 100, shall stand cancelled.

Standard 15.4 of Secretarial Standards is correctly in agreement with clause (b) of sub – section (2) of Section 103. If, within half an hour from the time appointed for holding a Meeting called by requisitionists, a Quorum is not present, the Meeting shall stand cancelled.

Quorum of adjourned meeting, on which clause (b) of sub – section (2) is not applicable, has been determined by sub – section (3) of Section 103 in following words:

“If at the adjourned meeting also, a quorum is not present within half-an-hour from the time appointed for holding meeting, the members present shall be the quorum.”

In this sub – section use and placing of word “also” in important for interpretation. This denotes its continuation with clause (a) of sub – section (2). Use of word “also” effectively creates two different classes of adjourned meetings: Meeting adjourned for want of quorum and meeting adjourned otherwise.

Back ground literature of Secretarial Standard 15.4, interpret it as “If, at an adjourned Meeting, Quorum is not present within half an hour from the time appointed, the Members present, being not less than two in number, will constitute the Quorum.” This does not take care of word “also” used in sub – section (3) of Section 103. Due to presence of word “also”, this part of Secretarial Standard is not fully in conformity with the provisions of the Act.

Secretarial Standards, clarify that if, due to subsequent changes in the Act, a particular Standard or any part thereof becomes inconsistent with the Act, the provisions of the Act shall prevail.

Hence, only at an adjourned Meeting for the want of quorum, quorum is not present within half an hour from the time appointed, the Members present, being not less than two in number, will constitute the Quorum.

Meeting adjourned otherwise:

As discussed above; Chairman may adjourn a meeting:

  • In event of disorder or like causes,
  • With consent of member, when circumstances warrant, or
  • So directed by (majority of) members.

In these cases, according to sub – section (3) of Section 103 read in continuation with sub – section (2); normal quorum as determined under sub – section (1) shall apply.

Adjournment of adjourned meetings:

Now, two interesting situation may arise. It is possibility that quorum would not be present in meeting adjourned otherwise than want of quorum. Secondly, reduced quorum may still not be present in adjournment, of whose original meeting quorum was not present.

We may find recourse in Standard 15.6 which mentions:

“At an adjourned Meeting, only the unfinished business of the original Meeting shall be considered. Any Resolution passed at an adjourned Meeting would be deemed to have been passed on the date of the adjourned Meeting and not on any earlier date.”

An adjourned meeting is a continuation of original meeting, and not a fresh meeting. Therefore, every situation in adjourned meeting shall be determined as if it is original meeting.

Where a first, second, third or so on adjourned meeting adjourned for the want of quorum, quorum in next adjourned meeting shall be two in accordance with sub – section (3) of Section 103 read in continuation with sub – section (2)

Where a a first, second, third or so on adjourned meeting adjourned otherwise than for the want of quorum, quorum in next adjourned meeting shall be determined in accordance with sub – section (1) of Section 103 read with sub – section (3) again read with in continuation with sub – section (2)

[Slightly different version of this Article written by this author was published earlier on website Law Street India here.]

Please note: I welcome your comments and feedback. This blog post is not a professional advice. Readers may share this post on social media by using buttons given here.

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One response to “QUORUM IN ADJOURNED MEETING

  1. Pingback: Index of Companies Law Posts | AishMGhrana

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