Q.State the circumstances under which the Board of Directors is bound to call an Extraordinary General Meeting on the requisition of members, and what happens if the Board fails to do so.

Section 100 gives members holding a minimum stake the power to force the Board's hand, and also gives them a fallback right to call the meeting themselves if the Board ignores a valid requisition.

Section 100 of the Companies Act, 2013 gives members a statutory right to force the calling of an EGM in specified circumstances.

When the Board is bound to call an EGM on requisition: The Board must call an EGM when it receives a valid, written requisition from members holding, on the date of the requisition, not less than one-tenth (1/10th) of the paid-up share capital of the company carrying voting rights (for a company having a share capital), or not less than one-tenth of the total voting power of all the members having a right to vote (for a company not having a share capital). The requisition must clearly state the matters to be considered at the proposed meeting.

What happens if the Board fails to act: If the Board does not proceed to call the meeting within 21 days from the date of receiving a valid requisition, the requisitionists themselves (or a majority of them, reckoned by value) are entitled to call the meeting on their own, and this meeting must actually be held within 3 months from the date of the original requisition. Any reasonable expenses that the requisitionists genuinely and properly incur in calling such a meeting must be reimbursed by the company, and the company is in turn entitled to deduct and recover an equivalent amount from the fees or remuneration payable to any director who was in default in calling the meeting. …

Students often forget the two separate time limits involved — 21 days is the deadline for the BOARD to act on the requisition, while 3 months (from the requisition date, not from the …