Section 98 of CA 2013 : Section 98: Power Of Tribunal To Call Meetings Of Members, Etc

Explanation using Example

Imagine a small tech startup, "InnovateX", which has been facing internal disputes among its directors, resulting in a deadlock. The disagreement has reached a point where they are unable to convene a board meeting to make crucial decisions for the company's future. One of the directors, who holds a significant stake in the company, realizes that the ongoing situation is detrimental to the interests of the company and its stakeholders.

Given the circumstances, the director approaches the National Company Law Tribunal (NCLT) with an application under Section 98 of the Companies Act, 2013. The director explains that it has become impracticable to call or conduct a board meeting due to the existing deadlock and seeks the Tribunal's intervention to resolve the impasse.

The NCLT, after reviewing the application, invokes its powers under Section 98. It orders a board meeting to be called and conducted in a manner it deems fit, bypassing the usual procedures that have become impossible due to the deadlock. The Tribunal might also issue directions to ensure the meeting is productive, such as appointing an independent chairperson for the meeting or specifying the quorum.

As a result of the NCLT's intervention, InnovateX is able to hold the board meeting, make the necessary decisions to move forward, and the meeting is considered valid and binding as per the Act.