SECTION 193

MINUTES OF PROCEEDINGS

Signing and confirmation of minutes of the board meeting - Certain queries answered.

Clarification 1

It is not obligatory to wait for the next board meeting in order to have the minutes signed of the meeting already held. Such minutes may be signed by the chairman of the meeting at any time before the next meeting is held. The course of confirming the minutes of any board meeting by members of the board at the next meeting is not contemplated by the law.

Since as stated in the immediately preceding paragraph, the confirmation of minutes of a board meeting is not required, the question of postponing action on the resolution already passed by the board for want of such confirmation would not arise. Since by such postponement of action, legal consequences are liable to be incurred, it would serve to indicate why the law does not contemplate confirmation of the minutes of any board meeting as such.

Where there is a practice of presenting the minutes of a meeting for confirmation by the board of directors at the next meeting, it may be noted that if such minutes have already been signed by the chairman of the meeting concerned the minutes attract the presumptions contained in section 195 and as such it will be possible to have any alteration in the minutes only by way of fresh resolutions of the board meeting in which the minutes of the meeting in question are discussed. Even if the minutes have not been signed but have been approved by the chairman of the meeting concerned, the same position as indicated above will prevail. In order that any change in such minutes may be effected, the only way open is to adopt fresh resolutions in modification on the footing that the minutes as recorded on the approval of the chairman stand.

* LETTER NO.8/2[MISC.]/75-CL-V, DATED 5.5.1975

Clarification 2

Recently the Department had an occasion to consider the question whether a chairman of one board meeting or a committee of the board should cause minutes of all proceedings of every meeting of its board within 30 days of the conclusion of every such meeting as per sub-section (1) of section 193, or whether it can be legally contended that the chairman of the next board meeting to be held within the meaning of section 285, can validly sign such minutes.

The question has been examined in consultation with the Department of Legal Affairs and this Department has been advised that clause (b) of section 193(1A) shows (i), what is to be done, and (ii) the period within which it is to be done. Clause (a) of section 193(1A), on the other hand, shows only what is to be done but is silent regarding the period within which it is to be done. However, regarding the period within which it is to be done, there is a clue. There is an indication from the fact that section 193(1A)(a) provides that in the case of minutes of the meeting of the board of directors, every page of every such book is required to be initialled or signed and the last page of the record of proceedings of each meeting in such books is required to be dated and signed either by the chairman of the said meeting or the chairman of the next succeeding meeting. Thus, section 193(1A)(a) gives option to chairman of the meeting of the board of directors or the chairman of the next succeeding meeting of the board of directors to initial or sign every page of every book and to date and sign the last page of the record of the proceedings of the meeting. Section 285 to hold its board meeting at interval of not exceeding three months subject to fulfillment of the other conditions. If this option is meant to be fully and really exercised by the company after any board meeting is held, either the chairman of the meeting the minutes of which are required to be signed or the chairman of the next board meeting can sign the minutes. Thus, it cannot be insisted upon that the minutes of the board meeting have to be signed within 30 days. Insistence can be made only as to the writing of the minutes within the period of 30 days from the date of the meeting held.

The above views may please be kept in view while taking up the matters with the companies or at the time of inspection under section 209A.

*CIRCULAR NO.25/76, DATED 1.9.1976.