CLARIFICATION IS NEEDED FROM MCA ABOUT SECTION 96 (1) OF CA 2013
Channel: R V Seckar
Date: 2020-09-11

WILL THE MCA AND ROCs COME FORWARD TO CLARIFY THE COMPANIES IF GAP BETWEEN TWO AGMs IS MORE THAN 6 MONTHS IS NOT AN VIOLATION OF SECTION 96 (1) OF CA 2013

CLARIFICATION IS NEEDED FROM MCA ABOUT SECTION 96 (1) OF CA 2013


There prevails ambiguity among the recent circulars issued by ROCs regarding the extension of deadline holding AGM on or before 31-12-2020. 
One School of thought argues as follows:
EXTENSION OF AGM DEADLINE BY ROC – NO VIOLATION OF SECTION 96 (1) OF CA 2013 IF GAP BETWEEN TWO AGMs IS MORE THAN 6 MONTHS.
As per Section 96 of Companies Act 2013, every company, other than OPC is required to hold an AGM every year. The AGM should be held on the earliest of the following dates:
(1) 15 months from date of the last AGM
(2) The last day of the calendar year
(3)  6 months from the close of the financial year.
Now that the ROCs have given a blanket extension for holding AGMs until 31st Dec 2020, the issue of gap between two AGMs arises.
Supposing a company has held its AGM in July 2019 last year, the gap of 15 months would come into effect and the company would not be able to take full benefit under the circular.
However, when this relaxation is given by the government & the respective ROC's, keeping in mind the unprecedented situation caused due to this pandemic, & if there's a considerable amount of gap of more than 15 months between 2 AGM's, the same will not be considered as non compliance.
Another School of thought argues as follows :
For example , The last date for conducting AGM is not 31.12.2020 for All companies. i.e.it vary from case to case.

1. If any Company has conducted their last AGM on 30.09.2019 than the last date shall  be 31.12.2020

2.  If any Company has conducted their last AGM on 30.07 .2019 than the last date shall  be 30.10.2020 (12 months + 3months) 
Reason:-  time gap between two AGM shall not exceed 15 months in any case.

3. The extension is not applied in case of first AGM.
4. Since the power was used by respective ROC and not by MCA, which means the power of ROC has already been used. Thus for further extension one has to go for compounding.
As the MCAs and ROCs circulars does not throw clear light on the subject , and there prevails a lot of doubt among stakeholders, it is advised that MCA should issue a clarification on this subject to clear the doubts among the stakeholders.
An early action by MCA on the subject would be much appreciated.