Tuesday, March 2, 2010

"Special Notice" under the Companies Act, 1956

What is meant by 'Special Notice'? What resolution is to be passed in case of an item of business to be transacted on Special Notice?

Section 190 of the Companies Act, 1956 reads as follows:

"(1) Where, by any provision contained in this Act or in the articles, special notice is required of any resolution, notice of the intention to move the resolution shall be given to the company not less then fourteen days before the meeting at which it is to be moved, exclusive of the day on which the notice is served or deemed to be served and the day of meeting.

(2) The company shall, immediately after the notice of the intention to move any such resolution has been received by it, give its members notice of the resolution in the same manner as it gives notice of the meeting, or if that is not practicable, shall give them notice thereof, either by advertisement in a newspaper having an appropriate circulation or in any other mode allowed by the articles, not less than seven days before the meeting."

In The Pioneer Motors (Private) Ltd vs The Municipal Council, Nagercoil, the Supreme Court held as follows:

"The words "not being less than one month" do imply that clear one month's notice was necessary to be given, that is, both the first day and the last day of the month had to be excluded.  To put it in the language used by Maxwell on Interpretation of Statutes, 10th Edition, p. 351 :- "..when... not less than so many days are to intervene, both the terminal days are excluded from the computation."

 Special Notice means the 14 clear days’ notice that is required to be given by shareholders to a registered company of an intention to propose certain resolutions at a general meeting of the company. The company must then give notice of the resolution when it calls the relevant meeting (ordinary resolution or special resolution as the case may be). If that is not practicable, notice can be given in newspapers or in any other mode allowed by the articles, not less than 7 days before the meeting.

It is pertinent to note that Special Notice and Special Resolution are not connected. One does not require the other. The object of giving special notice is to invite the special or pointed attention of the members to the particular resolution. Under the Companies Act, 1956, Sections 225, 257 and 284 require special notice and the articles may also require special notice to be given on other matters.
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2 comments:

  1. Nice piece of work man. really appreciate your work.
    Go on

    -cyril

    ReplyDelete
  2. An excellent and a very useful article.

    ReplyDelete