Every annual general meeting called after giving at least 21 clear days’ notice must be held on a day other than a public holiday, i.e. it should be held on working day, during business hours at the Registered Office of the company or at some other place within the city, town or village in which the Registered office of the company is situated. The meeting can be held at any place within the postal limit and local limits of the city, town or village in which the Registered Office of the company is situated and where the two do not coincide, the wider of the two. (Circular No. 1/1/80-CLV, dt. 16/02/81). The Central Government may, however, exempt any class of companies from these provisions.
Section 2(38) defines a public holiday as “public holiday within the meaning of the Negotiable Instruments Act, 1881" and clarifies that if any day is declared by the Central Government to be a public holiday after the issue of the notice convening such meeting, it shall not be deemed to be a public holiday in relation to the meeting, so that the meeting can be held on that day as scheduled, regardless of the day having been declared as a public holiday.
Where 30th June and 31st December are declared as holiday under the Negotiable Instruments Act for the limited purpose of half yearly closing of accounts of banks, treasuries, etc. in that case these two holidays will not be treated as public holidays for the purpose of Section 166 as per clarification issued by the Department of Company Affairs vide letter No. 8/(66)/80-CL V dated 2.3.1981. Hence, an Annual General Meeting can be held on these days.
No annual general meeting of any company shall be held on a public holiday. The prohibition is, however, not extended to extraordinary general meetings.
There is no contravention of Section 166(2) if an adjourned meeting accidentally comes to be held on a public holiday. (Department’s Letter No. 8/16(1)/61-PR, dated 19th May, 1961).
It is further laid down that a public company or a private company which is a subsidiary of a public company may, by its articles, fix the time for its annual general meetings and may also by a resolution passed in one general meeting, fix the time for its subsequent annual general meetings. A private company, which is not a subsidiary of a public company, may in a like manner and also by a resolution agreed to by all the members thereof, fix the time and place for its annual general meeting.
Section 166 does not prevent the articles of association from prescribing any time limit for holding annual general meeting so long as the two mandatory conditions in the section are fulfilled. The articles can, therefore, lay down that annual general meeting shall be held before 31st March (or any such date) every year. [Balakrishna Maheshwari v. Uma Shanker Mehrotra, (1947)].
Where the articles provided that meetings should be held in the month of August and in keeping with that provision meetings were generally held on the 3rd or 4th Monday of every August, but when in one year differences arose between the management and a big shareholder and a meeting was fixed on 3rd August, at which date it would have been too difficult for the big shareholder to exercise his voting rights on recently purchased shares, the court stayed the meeting and ordered that it should not be held before August 13, because by that time the big shareholder’s right would accrue to him. [Cannon v.Trask].
Any direction by a court that the annual general meeting may be held simultaneously at three different cities is invalid, because the section clearly requires that the meeting must be held either at the registered office or at some other place within the same city, town or village where the registered office is situated. [Dinekar Rai D. Desai v. R.P. Bhasin, (1985) 1 Comp LJ 38].
