HOLDING OF BOARD MEETING UNDER VIDEO CONFERENCE

PROFESSIONAL

KINDLY CONFIRM  WHETHER BOARD MEETING CAN BE HELD UNDER VIDEO CONFERENCE.  WHETHER SC HAS APPROVED THE VIDEO CONFERENCE . PLZ  LET ME KNOW.

 
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Lawyer

As far as I know there is no such judgement of Supreme court regarding this matter. If you see the section 174 of Companies Act 1956, It states that No.s of members "personally" present (Quorum). though this section not directly related to Board meetings still for understanding legislative intent it can be helpful.

I personally thinks vidio conferensing for board meeting should be allowed as it suffice the object and also reduces the cost of company (travelling expenses).

 
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Corporate Laws and Indirect Taxation Laws Practitioner.

It is proposed in the Co Bill 2008. Though the existing Act does not provide 4 d same.

 
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Corporate Laws and Indirect Taxation Laws Practitioner.

 Contrary Views are invited,......

 
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Company Secretary

Dear friends,

Meeting by video conferencing is very much allowed even in the present Act.  Pl refer to the following case laws as contributed by one of senior members in a forum:

 
Law to be interpreted as ongoing law -  changes and progress in technology can be considered - An Act is to be interpreted as a Living Act. Presumption of updating the construction has to be given.
Industry is not static. There are continuous progress therein. New processes and methods are developed and new material and components or types of components supersede others. It is unreasonable to give a static interpretation to words used in a tariff schedule ignoring the rapid march of technology - . - . - Progress cannot be stifled by over rigid interpretation - CCCE v. Lekhraj Jessumal and Sons 1996 (82) ELT 162 = 13 RLT 300 = 101 STC 480 (SC) = AIR 1997 SC 145.
In Senior Electric Inspector v. Laxminarayan Chopra AIR 1962 SC 159, while interpreting the word 'Telegraph Inc.', it was observed, 'In modern progressive society it would be unreasonable to confine the intention of a legislature to the words used at the time law was made, for a modern legislature making laws to a society which is fast moving must be presumed to be aware of the enlarged meaning the same concept might attract with the march of time. - . - . - Unless a contrary intention appears, an interpretation should be given to words used, to take in new facts and situations, if the words are capable of comprehending them'.
  In State of Maharashtra v. Dr Praful B Desai (2003) 4 SCC 601 = 2003 AIR SCW 1885, it was held that ‘presence’ need not be ‘physical presence’. Evidence in criminal case can be taken through video conferencing. Video conferencing is an advancement in science and technology which permits one to see, hear and talk with someone far away, with the same facility and ease as if he is present before you, i.e. in your presence. - - Parliament intends the court to apply to an ongoing Act a construction that continuously updates its wordings to allow for changes since the Act was  initially framed.
  It is presumed that Parliament intends the Court to apply to an ongoing Act a construction that continuously updates its wording to allow for changes since the Act was initially framed (an updating construction). This means that the language of the Act is to be construed in accordance with the need to treat it as current law. . . . . In construing an ongoing Act, the interpreter is to presume that Parliament intended the Act to be applied at any future time in such a way as to give effect to the true original intention. Accordingly, the interpreter is to make allowances for any relevant changes that have occurred since the Act’s passing, in social conditions, technology, the meaning of words and other matters. An Act of Parliament is a ‘living Act’. Parliament is expected to anticipate temporal developments. An enactment of former days is thus to be read today, in the light of dynamic processing received over the years, with such modification of the current meaning of its language as will not (sic - the word ‘not’ should not be there) give effect to the original legislative intent. - from Statutory Interpretation by Francis Bennion - quoted with approval in State v. S J Choudhary 1996 AIR SCW 1128 = (1996) 2 SCC 428 = AIR 1996 SC 1491 - SC 5 member Constitution Bench. - quoted with approval in CIT v. Podar Cement P Ltd. 92 Taxman 541 = 1997 AIR SCW 2466 = (1997) 5 SCC 482 = AIR 1997 SC 2523 = 226 ITR 625 (SC 3 member bench) – same view in Malik Iron v. State of Haryana (2002) 126 STC 220 (SC).
  It is presumed that Parliament intends the Court to apply to an ongoing Act a construction that continuously updates its wording to allow for changes since the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking – UOI v. Naveen Jindal (2004) 2 SCC 510 = 2004 AIR SCW 705 (SC 3 member bench).
  With development of science and technology, the ongoing statutes cannot be construed in such a manner so as to take society backwards and not forward – Rabindra Singh v. Financial Commissioner, Corporation, Punjab (2008) 7 SCC 663 (SC 3 member bench) – relying on State of Punjab v. Amritsar Beverages (2006) 7 SCC 607. In case of Rabindra Singh, it was held that  purported service by beat of drum or publication of notice in a local newspaper which has no circulation in USA etc. cannot be said to be an effective notice
  Creative interpretation had been resorted to by the Court so as to achieve a balance between the age old and rigid laws on the one hand and the advanced technology in other. The judiciary always responds to the need of the changing scenario in regard to development of technologies. In uses its own interpretative principles to achieve a balance when Parliament has not responded to the need to amend the statute having regard to the developments in the filed of science. Internet and other information technologies brought with them issues which were not foreseen by law – State of Punjab v. Amritsar Beverages (2006) 147 STC 657 (SC). In this case, the law provided for return of seized documents within 60 days after getting copies and getting it verified. Officer was required to affix his signature and official seal at more than one places on the document. Dealer was required to verify its contents. Sales tax officers were unable to decide how to follow this procedure in case of computer hard disk seized from the dealer. Hence, Court suggested a method by which copy of hard disk should be taken and original returned to dealer.
  In State v. S J Choudhary (supra), it was held that opinion of ‘typewriting expert’ is admissible under section 45 of Evidence Act, even if the section only uses the word ‘hand writing’. The Act was passed in 1872 and in present times, it must be necessarily understood to include typewriting as well, as typing has become more common than handwriting. This was not mentioned in the Evidence Act, obviously because first practical typewriter was marketed only in 1874 and hence could not have been specified in the Act which was passed in 1872.
 
In SIL Import, USA v. Exim Aides Silk Exporters 1999 AIR SCW 1218 = AIR 1999 SC 1609 =  (1999) 4 SCC 567, need to update legislation was approved. Statute should be interpreted by giving allowances for any relevant changes that have occurred since the passing of Act, in law, social conditions, technology, the meaning of words and other matters. In this case, it was held that a notice given by facsimile (Fax) will be 'notice in writing'.

 Further, Section 287(2) has not used the words "personally present" as has been done in Section 174(1) for shareholders' meetings.  Companies which have adopted Table A are free to provide for meeting through video conferencing (Ref.Regulation 73).

Regards,

 

 

 
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under the existing law, the video conferencing has not yet been accepted for board meetings.

 
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Company Secretary

Dear Mr Arya,

 

I have given various citations of judgements in favour of the argument of holding board meetings through video conferencing. 

 

It would be better if you give your counter arguments in support of your view.

 

Regards,

 

 

 
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Company Secretary

Mr. Agrawal

The cases cited are interesting. However these cases doesnot talks about video conferencing for Board meetings. These judgements can be applied only in the same situations and cannot have general applicability.  As per the current Companies Act, physical presence is mandatory for quorum of meeting.

But the wait is over as the Companies Bill 2009 has provisions for video conference meetings too. Please refer Sec 154 of proposed bill.

Regards

Malav  

 
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