The NCLAT has set aside an NCLT order, clarifying that Section 98 necessitates proof of impracticability in convening an EGM.
NCLAT: Section 98 Requires Proof of Impracticability
The National Company Law Appellate Tribunal (NCLAT) has recently set aside an order from the National Company Law Tribunal (NCLT) regarding the invocation of Section 98 of the Companies Act. The NCLAT ruled that the party invoking Section 98 must demonstrate that convening a general meeting is impracticable.
This decision underscores the necessity of substantiating claims of impracticability when seeking interventions from the NCLT concerning extraordinary general meetings. The ruling is significant for corporate governance and the legal processes surrounding shareholder meetings, ensuring that the grounds for calling such meetings are robust and justifiable.
For legal practitioners, this ruling highlights the importance of adequate documentation and evidentiary standards when bringing forth such applications. Companies should ensure compliance with provisions to mitigate the risk of facing challenges on procedural grounds.
