Supreme Court Issues Notice on Whether the NCLT Can Order an Extraordinary General Meeting Without Proof of Impracticability

Kaustav Chowdhury

22 hours ago

5 min read

Background and Facts

A shareholder who cannot get the board to convene an extraordinary general meeting has two routes, and the question of how they relate to each other is now before the Supreme Court. On September 22, 2026 a Bench of Justice K.V. Viswanathan and Justice Arun Palli issued notice on a challenge to an order of the National Company Law Appellate Tribunal in the Pearl City Marine Products Private Limited matter, and listed the case for November 6, 2026.

The appellate tribunal had held that the power of the National Company Law Tribunal under Section 98 of the Companies Act, 2013 to order a meeting is exceptional, and that it can be exercised only where the applicant establishes that convening the meeting without tribunal intervention has become impracticable. On that reading, a requisitionist who has the self-help remedy in Section 100(4) available has not shown impracticability at all.

The petitioner's case, as argued, is that Section 98 stands on its own footing and is not conditioned on Section 100(4). The respondent's position is that Section 100(4) is a statutory mechanism that allows the requisitionists to call the meeting themselves, so tribunal intervention is unnecessary where it is available.

Key Legal Issue

Whether the remedies in Section 98 and Section 100(4) of the Companies Act, 2013 are alternative or sequential: must a member who has requisitioned a meeting first exhaust the right to convene it himself before the Tribunal's power to order a meeting can be invoked?

What the Two Provisions Actually Do

The dispute is not about discretion but about the trigger, so the statutory machinery repays close reading.

The Self-Help Route Under Section 100

Section 100(1) permits the Board to call an extraordinary general meeting whenever it thinks fit. Section 100(2) obliges it to do so on a requisition by members holding not less than one-tenth of the paid-up share capital carrying the right to vote, or, in a company without share capital, not less than one-tenth of the total voting power. Section 100(3) requires the requisition to set out the matters for consideration, to be signed, and to be sent to the registered office.

Section 100(4) supplies the consequence of inaction. If the Board does not within twenty-one days of receipt of a valid requisition proceed to call a meeting for a day not later than forty-five days from receipt, the requisitionists may call and hold the meeting themselves within three months of the requisition. Section 100(5) requires that meeting to follow the same procedure as a Board convened meeting, and Section 100(6) makes the company liable for the reasonable expenses, recoverable from the fees of the defaulting directors.

The Tribunal Route Under Section 98

Section 98 is differently shaped. It operates where it is impracticable to call, hold or conduct a meeting in the manner in which meetings of the company may be called or in the manner prescribed by the Act or the articles. The Tribunal may act of its own motion or on the application of a director or of a member entitled to vote, and may order the meeting to be called, held and conducted as it thinks fit, including by directing that one member present shall be deemed to constitute a meeting. Section 98(2) deems a meeting so held to be duly called, held and conducted for all purposes.

Two features follow from that language. The condition is impracticability, not obstruction or unfairness; and the relief is procedural, because the section produces a validly held meeting rather than a substantive outcome.

Why the Relationship Matters in Practice

The Section 100(4) route is cheaper and faster, but it is also narrower. It is available only to requisitionists who meet the one-tenth threshold, it depends on the requisition being valid, and the meeting it produces is convened without the company's cooperation, which in a contested company often means a fight over the register of members, the notice, the venue and the chair.

Section 98 answers those difficulties by putting the Tribunal in control of the mechanics. If the appellate tribunal's reading stands, a member below the threshold, or one facing precisely those practical obstacles, must still show that the ordinary route is impracticable rather than merely difficult. If the petitioner's reading prevails, Section 98 becomes available on its own terms.

Practice Notes

In practice, nothing has been decided and the appellate tribunal's order stands in the meantime, so an application should be prepared on the stricter view:

Build the impracticability record first: Document the requisition, the date of receipt, the Board's response or silence, and each specific obstacle to convening the meeting without the Tribunal. Impracticability is a finding on evidence, not an adjective.
Do not let the Section 100 clock run out: The self-help right under Section 100(4) has to be exercised within three months of the requisition. Allowing it to lapse and then pleading impracticability invites the answer that the difficulty is of the applicant's own making.
Check the threshold before choosing the route: Section 100(2) requires one-tenth of the paid-up capital carrying voting rights. A member who cannot reach it has no self-help remedy to exhaust, and should say so expressly in a Section 98 application.
Plead the mechanics you want ordered: Section 98 lets the Tribunal fix the manner of the meeting, including quorum. Ask for the specific directions needed, such as an independent chair, the register to be used, and the mode of voting, rather than a bare direction to hold a meeting.
Keep the relief procedural: Section 98 produces a validly held meeting. Grievances about the substance of what the majority then decides belong in a petition under Sections 241 and 242, and mixing the two weakens both.

Key Provisions Discussed

Section 98 of the Companies Act, 2013: Power of the Tribunal, of its own motion or on the application of a director or a member entitled to vote, to order a meeting to be called, held and conducted as it thinks fit where it is impracticable to do so in the ordinary manner, with a meeting so held deemed duly called, held and conducted.
Section 100 of the Companies Act, 2013: Calling of an extraordinary general meeting, with sub-section (2) obliging the Board to convene one on a requisition by members holding not less than one-tenth of the paid-up share capital carrying voting rights or of the total voting power, sub-section (4) permitting the requisitionists to call the meeting themselves where the Board does not act within twenty-one days for a day not later than forty-five days from receipt, and sub-section (6) making the company liable for their reasonable expenses.

Case Details

Matter: Challenge to the order of the National Company Law Appellate Tribunal in the Pearl City Marine Products Private Limited matter
Court: Supreme Court of India
Bench: Justice K.V. Viswanathan and Justice Arun Palli
Date: Notice issued September 22, 2026
Next Listing: November 6, 2026
Order Below: The appellate tribunal held the power under Section 98 to be exceptional, exercisable only on proof that convening the meeting without tribunal intervention had become impracticable.
Status: Notice issued only. No question has been decided, and the order under challenge is not reported as stayed.

Sources and References

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Readers should consult a qualified legal professional for advice specific to their circumstances.