THE COMPANIES ACT, 1956

A COMPANY LIMITED BY SHARES

ARTICLES OF ASSOCIATION OF
SOUTHERN ISPAT and ENERGY LIMITED
1.

Table 'A' not to apply but Company to be governed by these Articles.

No regulations contained in Table 'A' in the First Schedule to the Companies Act. 1956 shall
apply to this Company, but the regulations for the management of the Company and for the
observance of the Members thereof and their representatives, shall subject to any exercise of the
statutory powers of the Company with reference to the repeal for alteration of addition to its regulations
by Special Resolution, as prescribed by the Companies Act, 1956 be such as are contained in these
Articles.
INTERPRETATION
2.

Interpretation Clause

In the interpretation of these Articles the following expression shall have the following
meanings unless repugnant to the subject or context.
The Act
"The Act" means the Companies Act, 1956 or any statutory modification or re-enactment
thereof for the time being in force.
These Articles
"These Articles" means Articles of Association for the time being or as altered from time to
time by Special Resolution.
Auditors
"Auditors" means and includes those persons appointed as such for the time being of the
company.
Board of Directors
"Board of Directors" means the Board of Directors of the Company or the Directors of the
Company collectively.
Capital
"Capital" means the Share capital for the time being raised or authorised to be raised for the
purpose of the Company.
Chairman
"The Chairman" means the Chairman of the Board of Director for the time being of the
Company.
Charge
"Charge includes a mortgage.

The Company or this Company

"The Company" or "This Company" means SOUTHERN ISPAT & ENERGY LIMITED.
Debenture
"Debenture" includes Debenture stock, bonds and other securities of the Company whether
constituting a charge on the assets of the Company or not.
Directors
"Director" means the Board of Directors for the time being of the Company or as the case may
be, the Directors assembled at a Board, or acting under a circular resolution under the Articles.
Executor or Administrator
"Executor or Administrator" means a person who has obtained probate or letter or
administration, as the case may be, from a court of competent jurisdiction and shall include holder of a
succession certificate authorising the holder thereof to negotiate or transfer the share or shares of the
deceased member and shall also include the holder of a certificate granted by the Administrator
General under Section 131 of the Administrator General act, 1963.
Gender
Words imparting the masculine gender shall Gender include the feminine gender.
In writing and written
"In writing" and "Written" include printing, lithography and other modes of representing or
reproducing words in a visible form.
Legal Representative
"Legal Representative" means a person who in law represents the estate of a deceased
Member.
Marginal Notes
The Marginal notes hereto shall not effect the construction thereof.
Members
"Members" means the duly registered holders, from time to time of the shares of the company
and includes the subscribers to the memorandum of the Company.
Meeting or General Meeting
"Meeting" or "General Meeting" means meeting of the members.
Annual General Meeting
"Annual General Meeting" means a general meeting of the members held in accordance with
the provisions of Section 166 of the Act.

Extra-ordinary general Meeting

"Extra-ordinary General Meeting" means an extra-ordinary general meeting of the members
duly called and constituted and any adjourned holding thereof.
Month
"Month" means a calendar month.
Office
"Office" means the registered office for the time being of the company.
Ordinary Resolution
"Ordinary Resolution" shall have the meaning assigned to it by section 189 of the Act.
Paid-up
"Paid-up" includes credited as paid up.
Proxy
"Proxy" means an instrument whereby any person is authorised to attend a meeting and vote
for a member at the general meeting on a poll.
The Register of Members
"The Register" of "Members" means the register of members to be kept pursuant to section
150 of the Act.
The Registrar
"The Registrar" means the Registrar of Companies, Kerala.
The Companies Regulations
"The Companies Regulations" means the regulations for the time being for the management
of the company.
Seal
"Seal" means the common Seal for the time being of the Company.
Secretary
"Secretary" means any individual possessing the prescribed qualifications under the
companies (Secretary's qualifications) Rules 1975 and appointed by the Board to perform the duties of
a secretary.
Share
"Share" means share in the capital of the company and includes stock here a distinction
between stock and shares is expressed or implied.

Special Resolution
"Special Resolution" shall have the meaning assigned thereto by Section 189 of the Act.
The Statutes
"The Statutes" means the companies Act, 1956 and every other Act for the time being in force
effecting the company.
Year
"Year" means the calender year and "Financial Year" shall have the meaning assigned thereto
by Section 2(17) of the Act.
Singular Number
Words imparting the singular number include where the context admits as requires the plural
number and vice versa.
Expression in the Act to bear the same meaning in Articles.
Save as aforesaid any words and expressions contained in these Articles shall bear the same
meaning as in the Act or any statutory modification thereof for the time being in force.
CAPITAL
3.
* The Authorised Share Capital of the company shall be Rs.160,00,00,000 (Rupees One
Hundred Sixty Crores) divided in to 16,00,00,000 (Sixteen Crores) equity shares of Rs.10/- (Rupees
Ten) each.
4.

# Increase of Capital by the Company and how carried in to effect

The Company may in General Meeting from time to time by Ordinary Resolution increase its
capital by creation of new Shares which may be unclassified and may be classified at the time of issue
in one or more classes and of such amount or amounts as may be deemed expedient. The new
Shares shall be issued upon such terms and conditions and with such rights and privileges annexed
thereto as the resolution shall prescribe and in particular, such Shares may be issued with a
preferential or qualified right to dividends and in the distribution of assets of the Company and with a
right of voting at General Meeting of the Company in conformity with Section 87 and 88 of the Act.
Whenever the capital of the Company has been increased under the provisions of this Article the
Directors shall comply with the provisions of Section 97of the Act.
5.

New Capital same as existing Capital

Except in so far as otherwise provided by the conditions or issue or by these Articles and
capital raised by the creation of new shares, shall be considered as part of the existing capital and
shall be subject to the provisions herein contained with reference to the payment of calls and
installments, forfeiture, lien, surrender transfer and transmission, voting and otherwise.
6.

Reduction Capital

The Company may (subject to the provisions of Section 78, 80 and 100 to 105 both inclusive,
and other applicable provisions if any, of the Act) from time to time, by a special resolution reduce its
share or any share premium account in any manner for the time being authorised by law and in
particular pay off such capital on the footing that it may be called up again or otherwise.

* (As approved by way of Special Resolution passed by the members at the Extra Ordinary general meeting
th
held on Saturday, 11 December 2010)
th
# Altered at the Extraordinary General Meeting held on 28 January 2010

7.

Consolidation, division, sub-division and cancellation of shares.

Subject to the provisions of Section 94 of the Act of the company in general meeting may from
time to time by an ordinary resolution alter the conditions of its Memorandum as follows:1.
Consolidate and divide all or any of its shares capital into shares of larger amount than its
existing shares;
2.
Sub-divide its shares, or any of them into shares of smaller amount than fixed by the
Memorandum so however, that in the sub-division the proportion between the amount paid and the
amount, if any, unpaid on each reduced shares shall be the same as it was in the case of the shares
from which the reduced share is derived.
3.
Cancel any shares which, at the date of the passing of the resolution, have not been taken or
agreed to be taken by any person and diminish the amount of its share capital by the amount of the
shares so cancelled. A cancellation of shares in pursuance of this sub-clause shall not be deemed to
be reduction of share capital within the meaning of the Act.
Whenever the Company shall do any one or more of the things provided for in the foregoing
sub-clause (a), (b) and (c) of the Company shall, within thirty days.
thereafter given notice thereof the Registrar as required by section 95 of the Act, Specifying,
as the case may be, the shares consolidated, divided, sub-divided or cancelled.
7 (A). # Buy Back of Shares and Securities
The Board of Directors of the Company may if thought fit, buy back such of the Companys
Shares or securities to such limit upon such terms and conditions and subject to the provisions of
Section 77A, 77AA and 77B and other applicable provisions of the Companies Act and in accordance
with Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1999 as amended
from time to time.
SHARES AND CERTIFICATES
8.

Restriction on allotment and return of allotment

The Board of Directors shall observe the restriction as to allotment of shares to the public
contained in Section 69 and 70 of the Act, and shall cause to be made the returns as to allotment
provided in Section 75 of the Act.
9.

Shares at a discount.

1.
Where it is proposed to increase the subscribed capital of the Company by allotment of further
shares whether out of unissued share capital of out of increased share capital, than:
a.
Such further shares shall be offered to the persons, who at the date of the offer are
holders of the equity shares of the Company in proportion, as nearly as circumstances admit, to the
capital paid-up, on those shares at that date;
b.
Such offer shall be made by a notice specifying the number of shares offered and
limiting a time not being less than thirty days from the date of the offer within which the offer, if not
accepted, will be deemed to have been declined;
c.
The offer aforesaid shall be deemed to include a right exercisable by the persons
concerned to renounce the share offered to them in favour of any other person and the notice referred
to in sub-clause (b) hereof shall contain a statement of this right;
# Altered at the Extraordinary General Meeting held on 28th January 2010

d.
After the expiry of the time specified in the aforesaid notice, or in receipt of earlier
intimation from the person to whom such notice is given that he declines to accept the shares offered,
the Board of Directors may dispose them of in such manner as they think most beneficial to the
Company.
2.
Notwithstanding any thing contained in the sub-clause (1) hereof, the further shares aforesaid
may be offered to any person (whether of not those person include the persons referred to in clause
(a) sub-clause (1) hereof) in any manner whatsover.
a.
If a special resolution to that affect is passed by the Company in general meeting; or
b.
Where no such special resolution is passed, if the vote cast (whether on a show of
hands, or on a poll, as the case may be) in favour of the proposal contained in the resolution moved in
that general meeting (including the casting vote if any, of the Chairman) by member who, being
entitled so to do, vote in person or where proxies are allowed, by proxy exceed the votes, if any, cast
against the proposal by members, so entitled and voting and the Central Government is satisfied, on
an application made by the Board of Directors in this behalf that the proposal is most beneficial to the
Company.
3.

Nothing in sub-clause (c) of clause (1) hereof shall be deemed:

a.
To extend the time within which the offer shall be accepted: or
b.
To authorise any person to exercise the right of renunciation for a second time, on the
ground that the person in whose favour the renunciation was first has declined to take the shares
comprised in the renunciation.
4.
Nothing in this Article shall apply to the increase of the subscribed capital of the Company
caused by the exercise of an option attached to the debentures issued or loans raised by the
Company.
a.

to convert such debentures or loans into shares in the Company; or

b.
to subscribe for shares in the Company (whether such option is conferred in these
Articles or otherwise),
PROVIDED that the terms of issue of such debentures or the terms of such loans include a
term providing for such option and such term:
c.
either has been approved by the Central Government before the issue of the
debentures or the raising of the loans, or is in conformity with the rules, if any, made by that
Government in this behalf; and
d.
in the case of debentures issued to or loans obtained from the Government or any
institution specified by the Central Government in this behalf, has also been approved by a special
resolution passed by the Company in general meeting before the issue of the debentures or the
raising of the loans.
10.

Shares under control of Directors.

Subject to the provisions of these Articles and of the act, shares shall be under the control of
the Directors who may allot or otherwise dispose of the same to such person on such terms and
conditions and at such times, as they think fit and with full power subject to the sanction of the
Company in general meeting to give any person the option to call for or be allotted shares of the
company either at a premium or all part or at a discount subject to the provisions of section 78 and 79
of the Act and such time and for such consideration as the Director think fit.

11.

Application of premium received on shares

1.
Where the Company issues shares at a premium whether for cash or otherwise, a
sum equal to the aggregate amount or value of the premium on these shares shall be transferred to an
account, to be called "THE SHARE PREMIUM ACCOUNT" and the provisions of the Act relating to the
reduction of the share capital of the Company shall, except as provided in this article, apply as if the
share premium account were paid up share capital of the Company.
2.
The share premium account may, notwithstanding anything in clause (1) hereof be
applied by the Company:
a.
in paying up unissued shares of the Company, to be issued to the members of the
Company, as fully paid bonus shares :
b.

in writing of the preliminary expenses of the Company ;

c.
in writing of the expenses of or the commission paid or discount allowed, on any issue
of shares or debentures of the company.
12.

Power also to Company in General Meeting to issue shares.

In addition to and without derogating from the powers for that purpose conferred on the Board
under Article 10 and 11 and the Company in general meeting may subject to the provisions of Section
81 of the Act, determine that any shares (whether forming part of the original capital or any increased
capital of the Company) be offered to such persons (whether members or not) in such proportion and
on such terms and conditions and either at a premium or at par or at a discount (Subject to compliance
with the provisions of section 78 and 79 of the Act) as such general meeting shall determine and with
full power to give any person (whether a member or not) the options to call for or be allotted shares of
any class of the Company either at a premium or at part or at a discount (subject to compliance with
the provisions of Section 78 and 79 of the Act) such option being exercisable at such time and for
such consideration as may be directed by such general meeting may take any other provisions
whatsoever for the issue, allotment or disposal of any such shares.
13.
The Company may issue if the discount shares in the Company of a class already issued and
the following conditions are fulfilled, namely;
1.
The issue of the shares at a discount is authorised by a resolution passed by the
company in general meeting and sanctioned by the Company Law Board.
2.
The resolution specifying the maximum rate of discount (not exceeding ten percent or
such higher percentage as the Central Government may permit in any special case) at which the
shares are to be issued; and
3.
The Shares to be issued at a discount within one month after the date on which the
issue is sanctioned by the Company Law Board or within such extended time as the Company Law
Board may allow.
14.

Instalment on shares to be duly paid.

If by the conditions of any allotment of any shares the whole or any part of the amount of issue
price thereof shall be payable by instalments, every such instalment shall, when due, be paid to the
Company by the person who for the time being and from time to time shall be registered holder of the
shares or his legal representatives and shall for the purposes of these Articles be deemed to be
payable on the date fixed for payment and in the case of non-payment of interest and expenses
forfeiture and the like and all the other relevant provisions of these Articles shall apply as if such
instalments were a call duly made and notified as hereby provided.

15. The Board may issue shares as fully paid up

Subject to the provisions of the Act and these Articles, the Board may allot and issue shares in
the capital of the Company as payment of any property sold or transferred or for service rendered to
the Company and any shares which may be so issued shall be deemed as fully paid up shares.
16. Acceptance of shares
Any application signed by or on behalf of any applicant for shares in the Company, followed by
an allotment of any shares therein, shall be an acceptance of shares within the meaning of these
Articles; and every person who thus or otherwise accepts any shares and whose name is therefore
placed on the register shall for the purpose of these articles be member.
17. Deposit and call etc. to be debt payable
The money, if any, which the Board of Directors shall, on the allotment of any shares being
made by them, require or direct to be paid by way of deposit, call or otherwise, in respect of any
shares allotted by them shall immediately on the insertion of the name of the allottee in the register of
members as the name of the holder of such shares, become a debt due to the recoverable by the
Company from the allottee thereof and shall be paid by him accordingly.
18. Liability of Members
Every member, or his heirs, executors or administrators to the extent of his assets which come
to their hands shall be liable to pay to the Company the portion of the Capital represented by his share
or shares which may, for the time being remain unpaid thereon in such amounts, at such time or times
and in such manner as the Board of Directors shall from time to time, in accordance with the
Company's regulations, require or fix for the payment thereof.
19. Share Certificates
Every members or allottees of shares shall be entitled without payment to receive certificates
in marketable lots of the same class registered in his name or if the Board so approves on payment of
such fee or fees at the dicretion of the Board or without payment of fees as the Board may from time to
time determine to several certificates each for one or more shares of each class. Every share
certificate shall specify the name of the person in whose favour it is issued, the share certificate
number and distinctive number(s) of the shares to which it relates and the amount paid up thereon.
Such certificate shall be issued in conformity with the provisions of the Companies (issue of share
certificates) rule 1960 in pursuance of a resolution passed by the Board and on surrender to the
Company of its letter of allotment or its fractional coupons of requisite value, save in cases where
letters of allotment have not been issued or of issue against letter of acceptance or of renunciation or
in cases of issue of bonus share PROVIDED THAT if the, letter of allotment is lost or destroyed the
Board may impose such reasonable terms, if any, as it think fit, as to evidence and indemnity. The
certificates of title shall be issued under the Seal of the Company and shall be signed in conformity
with provisions of the Companies (issues of share certificates) Rules, 1960 or any statutory
modification or re-enactment thereof for the time being in force. Printing of blank form to be used for
issue of share certificates and maintenance of books and documents relating to issue of share
certificates shall be completed and kept ready for delivery within two months after the application for
the registration of the transfer of any such shares.
2.
Any two or more joint allottees or holder of shares shall for the purposes of this article,
be treated as a single member and the certificate of any share which may be the subject of joint
ownership, may be delivered to the person whose name stands first in the Register of Members.

20. Renewal or Share Certificate

No certificate of any share of shares shall be issued either in exchange for those which are
defaced, torn or old, decrepit, worn our, or where the pages on the reserve for recording transfer have
been duly utilised the certificates in lieu of which it is issued is surrendered to the Company.
PROVIDED THAT no fee shall be charged for issue of new certificates in replacement of those which
are defaced torn or old decrepit or worn our or where the pages on the reverse for recording transfer
have been duly utilised.
21.
New certificates shall not be granted under the provisions of the foregoing articles except
upon delivery of the worn out or defaced or used upon certificates for the purpose of cancellation, and
upon proof of destruction or loss, and upon such terms as the Boards of Directors may think fit in the
case of any certificate have been destroyed, lost or defaced beyond identification.
22.The first named or joint holders deemed sole holder
If any share stands in the name of two or more persons, the person first named in the Register
shall, as regard receipt of dividends or bonus or service of notices and all or any other matter
connected with the company, except voting at meeting and the transfer of the shares, be deemed the
sole holder thereof but the joint holder of a share shall severally as well as jointly be liable for the
payment of all instalment and call due in respect of such shares and for all incidents thereof according
to the Company's regulations.
23.

Company no bound to recognise.

1.
Except as ordered by a court of Competent jurisdiction or as by law required, the
Company shall not be bound to recognise, even when having notice thereof, any equitable,
contingent, future or partial interest in any share, or unless otherwise provided in these articles any
right in respect of a share otherthan an absolute right thereto, in the person from time to time
registered as a holder thereof, but the Board shall be at liberty at their sole discretion to register any
share in the joint name of any two or more persons (but not exceeding 4) or the survivor or survivors of
them.
2.
Save as in the Act or in these Articles otherwise provided, the Company shall be
entitled to treat the person, whose name appears first in the Register of Members as the holder of any
share as the absolute owner thereof, and accordingly shall not (except as ordered by a Court of
Competent jurisdiction or as by law required) be bound to recognise any benami, trust or equitable,
contingent, future or partial or other claim or claims or right to or interest in such share on the part of
any other person whether or not it shall have express or limited notice thereof. The provisions of
Section 153 of the Act shall apply.
3.
Share may be registered in the name of an incorporated Company or other body
corporate but not in the name of a minor (except in case where they are fully paid) or in the name of a
person of unsound mind or in the name of any firm or partnership.
24.

Company not to buy its own shares

None of the funds of the Company shall except as provided by Section 77 of the Act be
employed in the purchase of its own shares, unless the consequent reduction of capital is elected and
sanctioned pursuance of Section 100 to 105 of the Act and these Articles or in giving either directly or
indirectly and whether by means of a loan, guarantee, the provisions of security of or in connection
with a purchase or subscription made or to be made by any person of or for any share in the Company
or in its holding Company.

UNDERWRITING AND BROKERAGE

25.

Commission

Subject to the provision of Section 76 of the Act, the Company may at any time pay
commission to any person in consideration of his subscribing or agreeing to subscribe (whether
absolutely or conditionally) for any shares in or debentures of the Company or his procuring or
agreeing to procure subscriptions but so that the commission shall not exceed in the case of share five
percent of the price at which the share are issued and in the case of debentures are issued. Such
commission may be satisfied by payment of cash or by allotment of fully or partly in one way and partly
in one way and partly in the other.
26.

Brokerage

The company may on any issue of shares or debentures pay such brokerage as may be lawful
and reasonable.
27.

Commission to be included in the Annual Return

Where the Company has paid any sum by way of commission in respect of any shares and
debentures or allowed any sums by way of discount in respect of any shares and debentures such
statement thereof shall be made in the Annual Return as required by part 1 of Schedule V to the Act.
INTEREST OUT OF CAPITAL
28.

Interest out of capital

Where any shares are issued for the purpose of raising money to defray the expenses of the
construction of any works or buildings, or the provisions of any plant which cannot be made profitable
for lengthy period the Company may pay interest on such of that share capital as is for the time being
paid up, for the period, at the rate and subject to the conditions and restrictions provided by Section
208 of the Act and may charge the same Capital as part of the Cost of construction of the work or
building or the plant.
DEBENTURES
29.

Debentures with voting rights not to be issued.

1.
The Company shall not issue any debentures carrying voting rights at any meeting of
the Company whether generally of in respect of particular classes of business
2.
The Company shall have power to reissue redeemed debentures in certain in
accordance with Section 121 of the Act.
3.
Payments of certain debts out of asset subject of floating charge in priority to claims
under the charge may be in accordance with provisions of Section 123 of the Act.
4.
Certain charges referred to in Section 125 of the Act, shall be void against the
Liquidator or creditor unless registered as provided in that Section 125.
5.
A contract with the Company to take up and pay for any debentures of the
Company may be enforced by a decree for specific performance.
6.
Unless conditions of issue thereof otherwise provide, the Company shall (subject to
the provision of Section 113 of the Act) within three months after the allotment of its debentures or
debenture stock, and within one month after the application for the registration of the transfer of any

10

such debentures or debenture stock have complete any have ready for delivery the certificate of all
debenture-stock allotted or transferred.
7.
The Company shall comply with the provisions of Section 118 of the Act as regard
supply of copies of Debenture Trust Deed and inspection thereof.
8.
The Company shall comply with the provisions of Section 124 to 145 of the Act as
regard registration of charges.
CALLS
30.

Directors may make calls

Subject to the provisions of Section 91 of the Act the Board of Directors may from time to time
by a resolution passed at a meeting of a Board (and not by a circular resolution) make such calls as it
think fit upon the members in respect of all moneys unpaid on the shares whether on account of the
nominal value of the shares or by way of premium, held by them respectively and not by conditions.
31.

Notice of Calls

Not less than fourteen days notice in Writing of any call shall be given by the Company
specifying the time and place of payment, and the person and persons whom such call shall be paid.
32.

Call to date from resolution

A call shall be deemed to have been made at the time when resolution authorising such call
was passed at meeting of the Board of Directors and may :
Be made payable by the Members on such date or at the discretion of the Directors on such
subsequent date as shall be fixed by the Board of Directors.
33.

Directors may extend time

The Board of Directors may, from time to time at its discretion, extend
The time fixed for the payment of any call and may extend such time to all or any of the
members the Board of Directors may deem fairly entitled to such extension as of right except as a
matter of grace and favour.
34.

Amount payable at a fixed time or by instalment to be treated as a call.

If by the term of issue of any share or otherwise any amount is made payable at the fixed time
or by instalments at fixed time (whether on active of the nominal value of the share or by way of
premium) every such amount or instalment shall be payable as if it were a call duly made by the
Directors and of which due notice has been given and all the provisions herein contained in respect of
calls apply to such amount or instalment accordingly.
35.
If the sum payable in respect of any call or instalment be not paid on or before the day
appointed for the payment thereof, the holder for the time being or allottee of the share in respect of
which the call shall have been made or the instalment shall be due, shall pay interest on the same at
such rate not exceeding eighteen percent per annum as Directors shall fix from the day appointed for
the payment thereof till the time of actual payment but the Directors may waive payment of such
interest wholly or in part.
36.

Evidence in action by Company against shareholders.

On the trial or hearing of any such action or suit brought by the Company against any member
or his legal representatives for the recovery of any moneys claimed to be due to the Company in
respect of his shares, it shall be sufficient to prove that the name of the member as the holder or as

11

one of the holders at or subsequent to the date at which the money sought to do recovered is alleged
to have become due on the shares in respect of which the money is sought to be recovered that the
resolution making the call is duly recorded in the minute book and that the notice of such call was duly
given to the member or his legal representatives used in pursuance of these Articles and it shall not be
necessary to prove the appointment of Directors who made such call, not that a quorum of Directors
was present at the Board at which any call was made not that the meeting at which any call was made
was duly convened or constituted not any other matter whatsoever but the proof of the matter
aforesaid shall be conclusive evidence of the debt.
37.

Payment in anticipation of calls may carry interest

The Board of Directors may, if think fit agree to and receive from any member willing to
advance the same, all or and part of the amount due upon, the shares held by him beyond the sums
actually called for and upon the money so paid up in advance or so much thereof, from time to time
and at any time thereafter as exceeds the amount of the calls then made upon and due in respect of
its shares on account of which such advances or are made, the Board of Directors may pay or allow
interest, at such rate not exceeding, unless the Company in general meeting shall otherwise direct,
fourteen percent per annum as the member paying the sum in advance and the Board of Directors
agree upon the Board of Directors may agree to repay at any time any amount so advanced or at any
time repay the same upon giving to such members three months notice in writing. Money so paid in
advance of the amount of call shall not confer a right to participate in profit or dividend.
No member paying any sum in advance shall be entitled to voting right in respect of the
moneys so paid by him until the same would but for such payment, become presently payable.
LIEN
38.

Company to have lien of shares

The Company shall have the first and paramount lien upon all shares (other then fully paid up shares)
registered in the name of each member (whether solely or jointly with others) and upon the proceeds
of sale thereof, for all moneys (whether presently payable or not) called or payable at a fixed time in
respect of such shares. Any such lien shall extend to all dividends from time to time declared in
respect of such shares, PROVIDED THAT the Board of Directors may, at any time declare any Share
to be wholly or in part exempt from the provisions of this article.
39.

As to enforcing lien by sale

1.
The Company may sell, in such manner as the Board thinks fit, any shares on which
the Company has a lien for the purpose of enforcing the same PROVIDED THAT no sale shall be
made
a.

unless a sum in respect of which the lien exists is presently payable; or

b.
until the expiration of fourteen days after a notice in writing stating and demanding
payment of such part of the amount in respect of which the lien exists as is presently payable has
been given to the registered holder for the time being of the share or the person entitled thereto by
reason of his death or insolvency. To give & effect to any such sale, the Board may authorise a person
to transfer the shares sold to the purchaser thereof. The purchaser shall be registered as the holder of
the shares comprised in any such transfer.
2.
The purchaser shall not be bound to see to the application of the purchase money,
nor shall his title to the shares be effected by any irregularity or invalidity in the proceeding in
reference to the sale.

12

40.

Application of proceeds of sale

1.
The net proceeds of any such sale shall be received by the company and applied in
towards satisfaction of such part of the amount in respect of which the lien exists as is presently
payable, and
2.
The residue, if any, shall (subject to a like lien for sums not presently payable as
existed upon the shares before the sale be paid to the person entitled to the shares at the dates of the
sale.
FORFEITURE OF SHARES
41.

If money payable on shares not paid notice to be given.

If any member fails to pay the whole or any part of any call or any instalment of a call or before
the day appointed for the payment of the same or any extension thereof, the Board of Directors may,
at any time thereafter, during such time as the call or instalment remains unpaid, give notice to him
requiring him to any the same together with any interest that may have accrued and all expenses that
may have been incurred by the Company by reason of such non-payment.
42.

If money payable on share not paid notice to be given

For the purpose or the provisions of these Articles relating to forfeiture of shares, the sum payable
upon allotment in respect of a share shall be deemed to be call payable upon share on the day of
Allotment.
43.

Form of notice

The notice shall name a day (not being earlier than the expiry of fourteen days from the date
of the service of the notice) and place or place on and at which such call or instalment and such
interest thereon at such rate not exceeding eighteen percent per annum as the Directors may
determine and expenses as aforesaid are to be paid. The notice shall also state that in the event of
the non-payment at or before the time and at the place appointed, the shares in respect of which the
call was made or instalment is payable will be liable to be forfeited.
44.

In default of payment shares to be forfeited

If the requirement of any such notice as aforesaid are not complied with any share or shares
in respect of which such notice has been given may at any time thereafter before payment of all calls
or instalments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board
of Directors to that effect.
45.

Notice of forfeiture to member

When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in
whose name it stood immediately prior to the forfeiture and an entry of the forfeiture, with the date
thereof, shall forthwith be made in the Register of Members, but no forfeiture shall be in any manner
invalidated by any omission or neglect to give such notice or to make any such entry as aforesaid.
46.

Forfeited shares to be the property of the Company and may be sold etc.

Any share so forfeited, shall be deemed to be the property of the Company and may be sold,
re-allotted or otherwise disposed of, either to the original holder or to any other person, upon such
terms and in such manner as the Board of Director shall think fit.

13

47.

Member still liable to pay money owing at the time of forfeiture and interest

Any member whose shares have been forfeited shall notwithstanding the forfeiture, be liable
to pay and shall forthwith pay to the Company on demand all call instalments, interest and expenses
owing upon or in respect of such shares at the time of the forfeiture together with interest thereon from
the time of the forfeiture until payment, at such rate not exceeding eighteen percent per annum as the
Board of Directors may determine and the Board of Directors may enforce the payment of such
moneys or any part thereof, if it thinks fit, but shall not be under any obligation to do so.
48.

Effect of forfeiture

The forfeiture of a share shall involve the extinction at the time of the forfeiture of all interest in
and all claims and demands against the company in respect of the share and all other rights incidental
thereto.
49.
The Board of Directors may at any time before any shares so forfeited shall have been sold;
re-allotted or otherwise disposed of, annual the forfeiture thereof upon such conditions as it thinks fit.
50.

Declaration of forfeiture

1.
A duly verified declaration in writing that the declarant is a Director, the Managing
Director or the Manager or the Secretary of the company, and that a share in the Company has been
duly forfeited accordance with these Articles on a date stated in the declaration, shall be conclusive
evidence of the facts therein stated as against all persons claiming to be entitled to the share.
2.
The Company may receive the consideration, if any, given for the share on any sale,
re-allotment or other disposal thereof and may execute a transfer of the share in favour of the person
to whom the share is sold or disposed of.
3.
The person too whom such share is sold, re-allotted or disposed of shall thereupon be
registered as the holder of the share.
4.
Any such purchaser or allottee shall not (unless by express agreement) be liable to
pay calls, amounts, instalments, interest and expenses owing to the Company prior to such purchase
or allotment not shall be entitled (unless by express agreement) to any of the dividends interest or
bonuses accrued or which might have accrued upon the share before the time of completing such
purchase or before such allotment.
5.
Such purchaser or allottee not be bound to see to the application of the purchase
money, if any, not shall his title to the share be affected by the irregularity or invalidity in the
proceedings in reference in the forfeiture, sale re-allotment or other disposal of the share.
51.

Provisions of these articles as to forfeiture to apply in case of non-payment of any sum.

The provisions of these Articles as to the forfeiture shall apply in the case of non-payment of
any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account
of the nominal value of the share or by way of premium, as if the same had been payable by virtue of a
call duly made and notified.
52.
Upon sale, re-allotment or other disposal under the provisions of these articles, the certificate
or certificates originally issued in respect of the forfeited share shall (unless the same shall on demand
by the Company have been previously surrendered to it by the defaulting member) stand cancelled
and become null and void and of no effect and the Directors shall be entitled to issue a new certificate
or certificates in respect of the said shares to the person or persons entitled thereto.

14

53.

Surrender of Shares

The Directors may, subject to the provisions of these Act, accept a surrender of any share
from or for any member desirous of surrendering on such terms as they think fit.
TRANSFER AND TRANSMISSION OF SHARES
54.

No transfer to minor etc.

The Board shall not issue or register a transfer of any share to a minor (except in case where
they are fully paid) or insolvent or person of unsound mind.
55.

Form of transfer

The instrument of transfer of any share shall be in the prescribed form under the Companies
Central Government General Rules & Form, 1956 and in accordance with the requirement of Section
108 of the Act.
56.

Application for transfer

1.
An application for registration of a transfer of the shares in the Company may be
made either by the transferor or the transferee.
2.
Where the application is made by the transferor and relates to partly paid share, the
transfer shall not be registered unless the Company gives notice of the application to the transferee
and the transferee makes no objection to the transfer within two weeks from the receipt of the notice.
3.
For the purposes of clause (2) above, notice to the transferee shall be deemed to
have been duly given if it is despatched by prepaid registered post to the transferee at the address
given in the instrument of transfer and shall be deemed to have been duly delivered at the time at
which it would have been delivered in the ordinary course or post.
57.

Execution of transfer

The instrument of transfer of any share shall be duly stamped and executed by or on behalf of
both the transferor and the transferee. The transferor shall be deemed to remain the holder of such
share until the name of the transferee shall have been entered in the Register of members in respect
thereof.
58.

Transfer by legal representatives

A transfer of share in the Company of a deceased member thereof made by his legal
representative shall although the legal representative is not himself a member, be as valid as if he had
been a member at the time of the execution of the instrument of transfer.
59.

Register of members etc when closed

The Board of Director shall have power on giving not less than seven days previous notice by
advertisement in some newspaper circulating in the district in which the registered office of the
Company is situated in close the Register of Members and/or the Register of Debenture Holder at
such time or times and for such period or periods, not exceeding thirty days at a time and not
exceeding in the aggregate forty five days in each year as it may seem expedient to the Board.
60.

Directors may refuse to register transfer

Subject to the provisions of Section 111 of the Act, and Section 22A of the Securities
Contracts Regulations Act, 1956, or any statutory modification thereof for the time being in force, the

15

Director may at any time in their own absolute and uncontrolled discretion and without assigning any
reasons or grounds decline to register or acknowledge any transfer of any share and in particular may
so decline in any case in which the Company has a lien upon the shares desired to be transferred or
any call or installment regarding any of them remain unpaid or unless the transferee is not approved
by the Director and such refusal shall not be affected by the fact that the proposed transferee is
already a member. The registration of transfer shall be conclusive evidence of the approval of the
Director of the transferee.
PROVIDED THAT registration of a transfer shall not be refinished on the ground of the
transferor being either alone or jointly with any other persons indebted to the Company on any
account whatsoever next where the Company has a lien on shares.
61.

Notice of refusal to be given to Transferor and Transferee

If the Company refuses to register the transfer of any shares or transmission of any right
therein, the Company shall, within one month from the date on which the instrument of transfer or
intimation of transmission was lodged with the Company, send one notice of refusal to the transferee
and the transferor or to the person giving the intimation of the transmission, as the case may be, and
thereupon the provisions, as the 111 of the Act and Section 22A of the Securities Contracts
(regulation) Act, 1956, or any statutory modification or re-enactment thereof for the time being in force
shall apply.
62.

Death of one or more joint holders of shares

In case of the death of any one or more of the person named in the Register of Members as
the joint holders of any share, the survivor or survivors shall be the only person recognised by the
Company as having any title to or interest in such share, but nothing herein contained shall be taken
to release the estate of a deceased joint holder from any liability on shares held by him with any other
person.
63.

Titles of shares deceased member:

The executor or administrators of a deceased member or holders of a Succession Certificates

or the legal representative in respect of the shares of a deceased member (not being one or two or
more joint holders) shall be the only persons recognised by the Company as having any title to the
shares registered in the name of such members, and the Company shall not be bound to recognise
such executor or administrators or holders of a Succession Certificates or the legal representatives
unless such executors or administrators or legal representatives shall have first obtained probate or
Latters of Administration or Succession Certificates as the case may be, from a duly constituted Court
in the Union of India.
PROVIDED THAT in any case where the Board in its absolute discretion thinks fit, it may
dispense with the production of Probate or Letters of Administration or Succession Certificate upon
such terms as to indemnity or otherwise as the Board in its absolute discretion may think necessary
and under Articles 65 register the name of any person who claims to be absolutely entitled in the
shares standing in the name of a deceased member, as a member.
64.

Registration of persons entitled to shares otherwise than by transfer (Transmission Clause)

Subject to the provisions of Articles 63 any person, becoming entitled to any share (not being
the shares held by any employee of the Company) in consequence of death, lunacy, bankruptcy or
insolvency of any members or by any lawful means other than by a transfer in accordance with these
Articles, may with the consent of the Board of Directors (which consent the Board of Directors shall not
be under an obligation to give) upon producing such evidence that the sustains the character in
respect of which he proposes to act under these Articles, or of his title, as the Board of Directors shall
require and upon giving such indemnity as the Directors shall require either be registered as member
in respect of such shares or elect to have some person nominated by him and approved by the Board

16

of Directors registered as a member in respect of such shares PROVIDED NEVERTHELES that if

such person shall elect to have his nominee registered, he shall testify his election by executing in
favour of his nominee an instrument of transfer in accordance with the provisions herein contained,
and until he does so, he shall not be free from any liability in respect of such shares, this clause is
herein referred to as "THE TRANSMISSION CLAUSE".
65.

Refusal of register nominee

Subject to the provision of the Act and these Articles, the Directors shall have the same right
to refuse to register a person entitled by transmission to any share or his nominee as if he were the
transferee named in an ordinary transfer presented for registration.
66.

Person entitled may receive dividend without being registered a member.

A person entitled to a share by transmission shall subject to the right of the Director to retain
such dividends or moneys as is hereinafter provided be entitled to receive and may give a discharge
for any dividends or other moneys payable in respect of such shares.
67.

No fees on transfer transmission

No fee shall be charged for registration of transfer, Probate, Succession Certificate and
Letters of Administration, Certificates of Death or Marriage, Power of Attorney or seminal other
documents.
68.

Transfer to be presented with evidence of title

Every instrument of transfer shall be presented to the Company duly stamped for registration
accompanied by such evidence as the Board may require to prove the title of the transferor, his right to
transfer the shares and generally under and subject to such conditions and regulations as the Board
may, from time to time stipulate, and every registered instruments of transfer shall remain in the
custody of the Company until destroyed by order of the Board.
69.

The Company not liable for disregard of a notice prohibiting registration of a transfer

The Company shall incur no liability or responsibility whatever in consequence of its

registering or giving effect to any transfer of shares mode or purporting to be made by any apparent
legal owner thereof as shown or appearing in the Register of Members to the prejudice of persons
having or claiming any equitable right, title or interest to or in the said shares, notwithstanding that the
Company may have had notice of such equitable right, title or interest or notice prohibiting registration
of such transfer and may have entered such notice, or referred thereto in any book of the Company
and the Company shall not be bound or required to regard or attend or give effect to any notice which
may be given to it of any equitable right, title or interest, or be under any liability whatsoever for
refusing or neglecting to do so, though it may have been entered or referred to in some book of the
Company, but the Company shall nevertheless, be at liberty to regard and attend to any such notice
and give effect thereto if the Board of Directors shall so think fit.
69-A. Transfer of Shares/Debentures in whatever lot should not be refused. However, there would
be no objection to the company refusing to split a Share/Debenture Certificate into several scripts of
very small denomination or to consider a proposal for transfer of Shares/Debentures comprised in a
Share/Debenture Certificates to several parties involving such splitting. If on the face of such
splitting/transfer appears to be unreasonable of without a genuine need or a marketable lot. Except as
above, the Company should not refuse transfer of share/debenture in violation of the Stock Exchange
listing requirements on the ground that the number of Shares/Debentures to be transferred is less than
any specified number.

17

69-B.

The Company agrees not to make any change:

a.

For registration to transfer of Shares and Debentures.

b.
For sub-division and/or consolidation of Share and/or debenture certificate and for
sub-division of letters of allotments and splits, consolidation, renewal and pucca transfer receipts into
denominations corresponding to the market units or trading.
c.

For sub-division of renounceable letters of Right.

d.
For issue of new certificates in replacement of those, which are old, decrepit, worn
out, or where the cages on reverse for recording transfer have been fully utilised.
e.
For registration of any Power of Attorney, Probate, Letters of Administration or similar
other documents.
69-C. The Company agrees not to charges any fees exceeding those which may be agreed upon
with the Stock Exchange.
a.
destroyed.

For issue of new certificates in replacement of those that are torn, defaced, lost or

b.
For sub-division and consolidation of shares and debentures certificates and for subdivision of letters of allotment, split consolidation, renewal or pucca receipts into denominations other
than those fixed for the market units of trading.
SHARE WARRANT
70.

Power to issue Share warrant

The Company may issue share warrants subject to and in accordance with the provision of
section 114 and 115 and accordingly the Board may in its discretion, with respect to any share which
is fully paid, upon application in writing signed by the person registered as holder of the share, and the
authenticated by such evidence (if any) as the Board may from time to time, require as to identity of
the person signing the application and on receiving the certificates (if any) of the share, and the
amount of the stamp duty on the warrant and such fee as the Board may from time to time required,
issue a share warrant.
71.

Deposit of share warrant.

1.
The bearer of a share may, at any time deposit the warrant at the office of the
Company, and so long as the warrant remains so deposited, the depositor shall have the same right of
signing a requisition for calling a meeting of the Company, of attending and voting and exercising the
other privileges of the member at any meeting held after the expiry of two clear days from the time of
deposit as if his name were inserted in the Register of Members as the holder of the share include in
the deposited warrant.
2.
3.
the depositor.
72.

Not more than one person shall be recognised as deposition of the share warrant.
The Company shall, on two days written notices, return the deposited share warrant to

Privileges and disability of the holders of share warrant.

1.
Subject as herein otherwise expressly provided no person shall, as bearer of a share
warrant sign a requisition for calling a meeting of the Company, or attend or vote or exercise any other

18

privileges of a member at a meeting of the Company, or be entitled to receive any notice from the
Company.
2.
The bearer of a share warrant shall be entitled in all other respects to the same
privileges and advantages as if he were named in the Register of Members as the holder of the shares
included in the warrant, and he shall be a member of the Company.
73.

Issue a new warrant or coupon.

The Board may, from time to time, make a bye-laws as to the terms on which, if it think fit, a
new share warrant or coupon may be issued by way of renewal in case of defacement, loss or
destruction.
CONVERSION OF SHARES INTO STOCK AND RECONVERSION
74.

Share may be converted into stock

The Company may by Ordinary Resolution

75.

1.

Convert any paid up share into stock, and

2.

Reconvert any stock into paid up shares of any denomination

Transfer of stock

The several holders of such stock may transfer their respective interest therein or any part
thereof in the same manner and subject to the same regulations under which the shares from which
the stock arose might before the conversion, have been transferred, or as near thereto as
circumstances admit.
76.

Rights of stock holders

The holders of stock shall, according to the amount of stock held by them, have the same right
privileges and advantages as regards dividends, voting at meeting of the Company and other matters,
as if they held the shares from which the stock arose; but no such privileges or advantage (except
participation in the dividends and profit of the Company and in the assets on winding up) shall be
conferred by an amount of stock which would not, if existing in shares, have conferred those privileges
or advantages.
77.

Regulations applicable to stock and share warrant

Such of the regulations of the company as are applicable to paid up shares shall apply to
stock and the word "Share" and "Shareholder" in these regulations shall include "Stock and Stockholder respectively.
BORROWING POWER
78.

Power to Borrow

Subject to Section 292 and 293 (1) (d) of the Act, the Director may from time to time, to their
discretion raise or borrow, or secure the repayment of any sum or sums of money for the purpose of
the Company at such times and in such manner and upon such terms and conditions in all respects as
they think fit and in particulars, by promissory note or by opening current accounts, or by receiving
deposits and advances, with or without security, or by the issue of bonds, perpetual or redeemable
debentures or debenture stock of the Company charged upon all or any part of the property of the
Company (both present and future) including its uncalled capital, for the time being, or be mortgaging

19

or charging or pledging and lands, buildings, goods or other property and securities of the Company or
by such other means as may seem expedient to them.
79.
Such debentures, debenture stock, bonds or other securities may be made assignable free
from any equities between the Company and the person to whom the same may be issued.
80.
Any such debentures, debentures stock, bonds or other securities may be issued at a
discount, premium or otherwise, and with any special privileges as to redemption, surrender, drawing,
allotment of shares, attending the General Meeting of the Company, appointment of Directors and
otherwise, Provided that debentures with the right to allotment of or conversion into shares shall not be
issued except with the sanction of the Company in general meeting.
81. The directors shall clause proper register to be kept, in accordance with Act, of all mortgages and
charges specifically affecting the property of the company; and shall duly comply with the
requirements of the Act in regard to registration of mortgages and charges therein specified and
otherwise.
82. If any uncalled capital of the company is included in or charge by any mortgages or other security
the director may, by instrument under the companys seal authorize the person in whose favour such
mortgage or security is executed or any other person in trust for him, to make calls on the members in
respect of such uncalled capital and the provision hereinbefore contained in regard to calls shall,
mutatis, mutandis, apply to made exercisable either conditionally, or unconditionally and either
presently or contingently and either to exclusion of the Directors Powers or otherwise and shall be
assignable if expressed so to do.
83. Where any uncalled capital of the company is charged all person taking subsequent charge
thereon shall take the same subject to such prior charge and shall not be entitled, by notice to the
shareholders or otherwise, to obtain priority over such prior charge.

84.
1.
If the Directors or any of them, or any other person, shall become personally liable for
the payment of any sum primarily, due from the Company, the Directors may execute or cause to be
executed any mortgage, charge or security over or affecting the whole or any part of the assets of the
Company by way of indemnity to secure the Directors or persons so becoming liable as aforesaid from
any loss in respect of such liability.
2.
If the money borrowed by the Company in accordance with clauses 78 to 84 supra,
have been guaranteed in their personal capacity by the Directors or any of them or by any other
person, firm or body corporate, each such guarantor/s may be paid a commission not exceeding 1
(one) percent per annum of the maximum limits borrowals guaranteed by them.
MEETING OF MEMBERS
85.

Annual General Meeting and the persons entitled to attend

1.
The Company shall in each year hold, in addition to any other meeting, a general
meeting as its Annual General meeting in accordance with the provision of Section 166 and 210 of the
Act shall specify the meeting as such in the notice calling it, except in the case where the Register has
given an extension of time for holding any Annual General Meeting of the Company and that of the
next.
PROVIDED THAT if the Register shall have for special reason, extended the time within which
any annual general meeting shall be held such annual general meeting may be held within the
extended time.
2.
Every Annual General Meeting shall be called for at any time during business hours,
on a day that is not a public holiday and shall be held either at the registered office of the Company or

20

at some other place within the city or town or village in which the registered office of the Company is
situated for the time being.
3.
Every member of the Company shall be entitled to attend either a person or by the
proxy and the Auditor of the Company shall have the right to attend and to be heard at any general
meeting which he attends on any part of the business which concern him as auditors.
86.
At every Annual General Meeting of the Company there shall be laid on the table the
Director's Report and Audited Statement of account, Auditors Report (if not already incorporated in the
Audited Statement of Accounts), the proxy register with proxies and the Register of Directors
Shareholdings which latter Register shall remain open and accessible during the continuance of the
meeting.
87.
All General Meeting other than Annual General Meeting shall be called Extraordinary General
Meeting.
88.
1.
Subject to the provision of Section 188 of the Act, the Directors shall on the requisition
in writing of such number of members as is hereinafter specified and (unless the Annual General
Meeting otherwise resolves) at the expenses of the requisitionists:a.
give the members of the Company entitled to receive a notice of the next Annual
General Meeting, notice of any resolution which may properly be moved and is intended to be moved
at that meeting.
b.
circulate to member entitled to have notice of any general meeting sent to them, any
statement of not more than one thousand words with respect to the matter referred to in any proposed
resolution or the business to be dealt with at that meeting.
2.

The number of members necessary for a requisition under clause (1) here of shall be:

a.
such number of members as represent not less than one - twentieth of the total voting
power of all the members having at the date of the requisition a right to vote on the resolution or
business to which the requisition relates; or
b.
not less than one hundred members having the right aforesaid and holding shares in
the Company on which there has been paid up an aggregate sum of not less than rupees one lakh in
all.
3.
Notice of any such resolution shall be given, and any such statement shall be
circulated, to members of the Company entitled to have notice of the meeting sent to them, by serving
a copy of the resolution of statement on each member in any manner permitted by the Act for service
of notice of the meeting, and notice of any such resolution shall be given to any other members of the
Company by giving notice of the general effect of the resolution in any manner permitted by the Act for
giving him notice of meeting of the Company. The copy of the resolution shall be served or notice of
the general effect of the resolution be given, as the case may be, in the same time manner and so far
as practicable at the same time as notice of the meeting and, where it is not practicable for it to be
served or given at that time, it shall be served or given as soon as practicable there after.
4.
The Company shall not be bound under this article to give notice of any resolution or
to circulate any statement unless:
1.
a copy of the requisition signed by the requisition (or two or more copies which,
between them, contain the signature of all the requisitionists) is deposited at the registered officer of
the Company.
a.
in the case of requisition requiring notice of a resolution, not less than six weeks
before the meeting, and

21

b.

in the case of any other requisition not less than two weeks before the meeting, and

2.
There is deposited or rendered with the requisition a sum reasonably sufficient to
meet the Company's expenses in giving effect there to.
PROVIDED THAT IF, after a copy of the requisition requiring has been deposited at the
registered office of the Company, and an Annual General Meeting is called for a date six weeks or less
after such copy has been deposited the copy although not deposited within the time required by this
clause, shall be deemed to have been properly deposited for the purpose there of.
5.
The Company shall not be bound under this article to circulate any statement if, on the
application either or Company or of any other person who claims to be aggrieved, the Court is satisfied
that the right conferred by this Article are being abused to secure needless publicity for defamatory
matter.
6.
Notwithstanding anything in these Article contained, the business which may be dealt
with at an Annual General Meeting shall include any resolution of which notice is given in accordance
with this article and for the purpose of this clauses notice shall be deemed to have been so given
notwithstanding the accidental omission in giving it to one more member.
89.

Extraordinary General Meeting by Board and by requisition

1.
The Directors may, whenever they think fit, convene an extraordinary general meeting
and they shall on requisition of the members, as here in after provided, forthwith proceed to convene
Extraordinary General Meeting of the Company.
When a Director or any two members may call an extraordinary general meeting.
2.
If at any time there are not within India sufficient Directors capable of acting to form a
quorum, or if the number of Director prescribed by these Articles and the continuing Directors fails or
neglect to increase the numbers of Director to that number or to convene a general meeting, any
Director or any two or more members of the Company holding not less than one - tenth of the total
paid up share capital of the company may call an extraordinary general meeting in the same manner
as nearly as possible as that in which meeting may be called by the Directors.
90.

Contents if requisition and number of requisitionists required and the conduct of meeting.
In case of requisition the following provisions shall have effect:

1.
The requisition shall set out the matters for the consideration of which the meeting is
to be called and shall be signed by the requisitionists and shall be deposited at the registered office of
the Company.
2.
The requisition may consist of several documents in like form, each signed by one or
more requisitionists.
3.
The number of members entitled to requisition a meeting in regard to any matter shall
be each number as held at the date of the deposit of the requisition, not less than that one-tenth of
such of the paid up share capital of the Company as at the date carries the right of voting in regarding
to that matter.
4.
Where two or more distinct matters are specified in the requisition, the provision of
sub-clause (3) shall apply separately in regard to each such matter, and the requisition shall
accordingly be valid in respect of those matters in regard to which the conditions specified in that
clause is fulfilled.

22

5.
If the Board does not, within twenty-one days from the date of the deposit of a valid
requisition in regard to apply matter, proceed duly to call a meeting for the consideration of those
matters on a day not latter than forty five days from the date of the deposit of the requisition, the
meeting may be called :
a.
by requisitionists themselves, or (b) by such of the requisitionists as represent either a
majority in value of the paid-up share capital held by all of them or not less than one-tenth of the paidup share capital of the Company as is referred to in sub-clause (3) whichever is less, Provided That for
the purpose of this sub-clause the Board shall, in the case of a meeting at which a resolution, is to be
proposed as a special resolution be deemed not to have duly convened the meeting if they do not give
such notice thereof as is required by sub-section (2) of Section 189 of the Act.
6.

A meeting called under clause (5) by requisitionists or any of them :

a.
shall be called in the same manner, as nearly as possible, as that in which meeting
are to be called by the Board, but
b.
shall not be held after the expiration of three months from the date of deposit of the
requisition. PROVIDED THAT nothing in such-clause (b) shall be deemed to prevent a meeting duly
commenced before the expiry of the period of three month aforesaid, from the adjourning to some day
after the expiry of that period.
7.
Where two or more persons hold any shares in the Company jointly, a requisition or a
notice calling a meeting, signed by one or some only of them shall, for the purpose of this article, have
the same force and effect as it if had been signed by all of them.
8.
Any reasonable expenses incurred by the requisitionists by reason of the failure of the
Board duly to call a meeting shall be repaid to the requisitionists by the Company, and any sum so
unpaid shall be retrained by the Company out of any sums due or to become due from the Company
by way of fees or other remuneration for their services to such of the Directors as were their services
to such of the Directors as were in default.
91.

Contents and manner of service of notice

1.
A general meeting of the company may be called by giving not less than twenty-one
days notice in writing.
2.
A general meeting may be called after giving shorter notice than that specified in subclause (1) hereof if consent is accorded thereto:
a.

in the case of an annual general meeting by all the members entitled to vote there at;

and
b.
in the case of any other meeting, by members of the Company holding not less than
ninety five percent of such part of the paid up share capital of the company as gives a right to vote at
the meeting.
PROVIDED THAT where any members of the Company are entitled to vote only on some
resolution or resolutions to be moved at a meeting and not on the others, those members shall be
taken into account for the purposes of this sub-clause in respect of the former resolution or resolutions
and not in respect of the latter.
92.
1.
Every notice of a General Meeting of the Company shall specify the place and the day
and hour of the meeting and shall contain a statement of the business to be transacted there at.
2.

Subject to the provisions of the Act notice of every general meeting shall be given

23

a.
to every member of the Company in the manner authorised by sub-clause 1 to 4 of
section 53 of the Act.
b.
to the persons entitled to a share is consequence of the death or insolvency of a
member by sending it through the post in a pre-paid letter addressed to them by name, or by the title
of representative of the deceased or assignee of the insolvent, or by, like description at the address, if
any, in India supplied for the purpose by the persons claiming to be so entitled or until such as
address had been so supplied, by giving the notice in any manner in which it might have been given if
the death or insolvency had not occurred; and
c.
to the Auditors or Auditor for the time being of the Company, in any manner
authorised by Section 53 of the Act in the case of any members of the Company.
PROVIDED THAT where the notice of the meeting is given by advertising the same in a
newspaper circulating in the neighbourhood of the registered office of the Company under sub-section
(3) of Section 53 of the Act, the statement of material facts referred to in Section 173 of the Act need
not be annexed to the notice as required by that section, but it shall be mentioned in the advertisement
that the statement has been forwarded to the members of the Company.
3.
Every notice convening a meeting of the company shall state with reasonable
prominence that a member entitled to appoint one or more proxies to attend and vote instead of
himself and that a proxy need not be a member of the Company.
93.
1.a.
In the case of an annual general meeting, all business to be transacted at the meeting
shall be deemed special with the exception of business relating to :
i.
and Auditors;

the consideration of the accounts; balance sheet and report of the Board of Directors

ii.

the declaration of dividend;

iii.

the appointment of Directors in the place of those retiring; and

iv.

the appointment of and the fixing of the remuneration of the auditors and

b.

in the case of any other meeting, all business shall be deemed special

2.
Where any items of business to be transacted at the meeting of the Company are
deemed to be special as aforesaid there shall be annexed to the notice of the meeting a statement
setting out all material facts concerning each such items of business including in particular the nature
of the concern or interest if any, therein of every Director.
PROVIDED THAT where any such item of special business at the meeting of the Company,
relates to, or affects, another Company, the annexed the extent of shareholding interest in that other
Company of every Director of the Company shall also be set out in the statement, if the extent of such
shareholding interest is not less than twenty percent of the paid up share capital of the company.
3.
Where any item of business consists of the according of approval of any document by
the meeting, the time and place where the document can be inspected shall be specified in the
statement aforesaid.
94.

Ommission to give notice to invalid proceedings

The accidential ommission to give any such notice as aforesaid to or the non-receipt thereof
by, any member or other person to whom it should be given shall not invalidate the proceedings of any
such meeting.

24

95. Notice of business to be given

No general meeting, Annual or Extraordinary, shall be competent to enter upon, discuss or transact
any business which has not been mentioned in the notice or notices convening the meeting.
96. Quorum
Five members entitled to vote and present in person shall be quorum for general meeting and
no business shall be transacted at the general meeting unless the quorum requisite be present at the
commencement of the meeting. A body corporate being a member shall be deemed to be personally
present if it is represented in accordance with Section 187 of the Act. The President of India or the
Governor of a State being a member of the Company shall be deemed to be personally present if he is
represented in accordance with Section 187 A of the Act.
97.

If quorum not present when meeting to be dissolved and when to be adjourned.

If within half an hour from the time appointed for holding a meeting of the company, quorum is
not present the meeting, if called by or upon the requisition of members, shall stand dissolved. In any
other case the meeting shall stand adjourned to the same day in the next week or if that day is a
public holiday unit the next succeeding day which is not a public holiday, at the same time and place,
or to such other time and place as the Board may determine. If at the adjourned meeting also, a
quorum is not present within half an hour from the time appointed for holding the meeting, the member
present shall be a quorum and may transact the business for which the meeting was called.
98.

Resolution passed at adjourned meeting

Where a resolution is passed at an adjourned meeting of the Company the resolution shall for
all purpose be treated as having been passed on the date on which it was in fact passed and shall not
be deemed to have been passed on any earlier date.
99.

Chairman of general meeting

The Chairman of the Board of Directors shall be entitled to take the chair at every general
meeting or if there be not such Chairman or if at any meeting he shall not be present within fifteen
minutes after the time appointed for holding such meeting or shall decline to take the chair, the ViceChairman of the Board of Directors, if any, shall be entitled to take the Chair. If the Vice-Chairman is
also not present at the time as aforesaid or is unwilling to take the chair, the Directors present shall
elect one of them as the Chairman and if no Director be present or if the Directors present decline to
take the Chair, then the members personally present shall elect one of the members to be the
Chairman of the meeting. If a poll is demanded on the election of the Chairman, it shall be taken
forthwith in accordance with the provision of the Act and the Chairman elected on show of hands shall
exercise all the powers of the Chairman under the said provisions. If some other person is elected
Chairman as a result of the poll shall be the Chairman for the rest of the meetings.
100.

Business confined to election of Chairman whilst chair vacant

No business shall be discussed at any general meeting except the election of a Chairman
whilst the chair is vacant.
101.

Chairman may adjourn meeting

1.
The Chairman may, with the consent of any meeting at which a quorum is present and
shall if so directed by the meeting adjourn the meeting from time to time and from place to place within
the city, town or village in which the Registered Office of the Company is situated.

25

2.
No business shall be transacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place.
3.
When a meeting is adjourned for thirty days or more notice of the adjournment
meeting shall be given as in the case of an original meeting.
4.
Save as aforesaid it shall not be necessary to give any notice an adjournment of the
business to be transacted at any adjourned meeting.
102.

How question to be decided at meetings

Every question submitted to a general meeting shall be decided in the first instance by a show
of hands unless the poll is demanded as provided in these Articles.
103.

Chairman's declaration of result of voting on show of hands

A declaration by the Chairman of the meeting that on a show of hands, resolution has or has
not been carried, either unanimously or by a particular majority, and an entry to that effect in the books
containing the minutes of the proceeding of the Company shall be conclusive evidence of the fact,
without proof of the number or proportion of votes cast in favour of or against such resolution.
104.

Demand for poll

Before or on the declaration of the result of the voting on any resolution on a show of hands, a
poll may be ordered to be taken by the Chairman of the meeting of his own motion, and shall be
ordered to be taken by him on a demand made in that behalf by the person or persons specified
below, that is to say :
a.
by a least five members having the right to vote on the resolution and present in
person or by proxy, or
b.
by any member or members present in person or by proxy and having not less that
one-tenth of the total voting power in respect of the resolution, or
c.
by any member or members present in person or by proxy and holding shares in the
Company conferring a right to vote on the resolution, being shares on which aggregates sum has
been paid up which is not less than one-tenth of the total sum paid-up on all the shares conferring that
right.
2.
The demand for a poll may be withdrawn at any time by the person or persons who
made the demand.
105.

Time of taking poll

A poll demanded on any question of adjourn-adjournment shall be taken forthwith. A poll

demanded on any other question (not being a question relating to the election of a Chairman) shall be
taken at such time when the demand was made and in such manner and at such place as the
Chairman of the meeting may direct and the result of the poll shall be deemed to be the decision of the
meeting on the resolution on which the poll was taken.
106.

Chairman's casting vote

In the case of equality of votes the Chairman shall both on a show of hands and a poll (if any)
have a casting vote in addition to the vote or votes to which he may be entitled as a member.
107.

Scrutineers at poll

26

Where a poll is to be taken, the Chairman of the meeting shall appoint two scrutineers to
scrutinise the votes given on the poll and to report thereon to him. One of the scrutineers so
appointed shall always be a member (not being an officer or employee of the Company) present at the
meeting, provided such a member is available and willing to be appointed. The Chairman shall have
power at any time before the result of the poll is declared to remove a scrutineer from office and fill
vacancies in the office of the scrutineer arising from such removal or from any other cause.
108.

Demand for poll not to prevent transaction of other business.

The demand for a poll except on the question of the election of the Chairman and of an
adjournment shall not prevent the continuance of a meeting for the transaction of any business other
than the question on which the poll has been demanded.
109.

Special notice

Where, by any provision contained in the Act or in these Articles, special notice is required for
any resolution, notice of the intention to move the resolution shall be given to the company not less
than 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 the meeting. 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 has given 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 any other mode allowed by these Articles, not less than seven days before
the meeting.
VOTE OF MEMBERS
110.

Member paying money in advance to be entitled to vote in respect thereof.

A member paying the whole or a part of the amount remaining unpaid on any shares held by
him although no part of that amount has been called up, shall not be entitled by any voting rights in
respect of the moneys so paid by him until the sum would but for such payment becomes presently
payable.
111.

Restriction on exercise of voting rights of members who have not paid

No members shall exercise any voting right in respect of any shares registered in this name
on which any calls or other sums presently payable by him have not been paid, or in regard to which
the company has exercised any right of lien.
112.

Number of votes to which entitled

Subject to the provisions of Articles 112 every member of the Corporation, holding any equity
share capital and otherwise entitled to vote shall, on a show of hands when present in person (or
being a body corporate present by a representative duly authorised) have one vote and no poll, when
present in person (including a body corporate by a duly authorised representative) or by an agent duly
authorised under a Power of Attorney or by proxy, his voting right shall be in proportion to his share in
the paid-up equity share capital of the Company. A member is not prohibited for exercising his voting
rights on the ground that he had not held his shares or interest in the Company for any specified
period preceding the date on which the vote is taken.
113.

Votes of members of unsound mind

A member of unsound mind or in respect of whom order has been made by any court having
jurisdiction in lunacy, may vote whether on a show of hands or on a poll by his committee or other
legal guardian and any such committee or guardian may own a poll vote by proxy.

27

114.

Votes of joint members

If there be joint registered holder of any shares, any of such person may vote at any meeting
personally or by an agent duly authorised under a Power of Attorney or by proxy in respect of such
shares, as if he were solely entitled thereto but the proxy so appointed shall not have right to speak at
the meeting, and if more than one of such joint holders be present at any meeting either personally or
by agent or by proxy, that an of the said persons so present who stands higher on that one of the said
persons so present who stands higher on the Register shall alone be entitled to speak and to vote in
respect of such shares, but the other or others of the joint holder shall be entitled to be present at any
meeting, provided always that a person present at any meeting personally shall be entitled to vote in
preference to a person present by an agent duly authorised under a Power of Attorney or by proxy
although the name of such person present by agent or proxy stands first or higher in the Register in
respect of such shares.
Several executors or administrators of a deceased member in whose name shares stand shall
for the purpose of these articles be deemed joint holders thereof.
115.

Representation of body corporate

1.
A body corporate (whether a company within meaning of the Act or not) may, if is
member or creditor of the Company (including a holder of debentures), authorised such person as it
thinks fit by a resolution of its Board of Directors or other Governing creditors of the Company or
debenture holders of the Company. A person authorised by resolution as aforesaid shall be entitled to
exercise the same rights and powers (including the right to vote by proxy) on behalf of the body
corporate which he represent as that body could exercise if it were an individual member, creditor or
holder of debenture of the Company. The production of a copy of the resolution referred to above,
certified by a Director or the secretary of such body corporate before the commencement of the
meeting shall be accepted by the Company as sufficient evidence of the validity of the said
representatives appointment and his right to vote thereat.
2.
Where the president of India or the Governor of the State is a member of the
Company, the President or, as the case may be, the Governor may appoint such person as he thinks
fit to act as his representative at any meeting of the Company or at any meeting of any class of
members of the Company and such a person shall be deemed to be a member of the Company shall
be entitled to exercise the same rights and powers, including the right to vote by proxy, as the
president, or as the case may be, the Governor could exercise as a member of the Company.
116.

Votes in respect of deceased or insolvent members

Any person entitled under the Transmission Clause to transfer any shares may vote at any
general meeting in respect thereof in the same manner as if he was a registered holder of such shares
provided that at least forty-eight hours before the time of holding the meeting or adjourned meeting, as
the case may be, at which he purposes to vote, he shall satisfy the Directors of his right to
transmission of such shares and give such indemnity (if any) as the Directors may require unless the
Directors shall have previously admitted his right to vote at such meeting in respect thereof.
117.

Voting in person by proxy

Subject to the provisions of these Articles, vote may be given either personally or by proxy. A
body corporate being a member may vote either by a proxy or by a representative duly authorised in
accordance with Section 187 of the Act.
118.

Rights of members to votes differently

On a poll taken at a meeting of the Company, a member entitled to more than one vote or his
proxy or other person entitled to vote for him, as the case may be, need not if the votes, use all his
votes or case in the same way all the votes he uses.

28

119.

Proxies

Any Member of the Company entitled to attend and vote a meeting of the Company shall be
entitled to appoint another person (whether a member or not) as his proxy to attend and vote instead
of himself PROVIDED ALWAYS that a proxy so appointed shall not have any right whatever to speak
at the meeting. Every notice convening a meeting of the Company shall state that a member entitles
to attend and vote is entitled to appoint one or more proxies.
120.

Proxy either for specified meeting or for a period

An instrument of proxy may appoint either for the purpose of a particular meeting specified in
the instrument and any adjournment thereof or it may appoint a proxy for the purpose of every meeting
to be held before a date specified in the instrument and every adjournment of any such meeting.
121.

No proxy to vote on a show of hands

No proxy shall be entitled to vote on a show of hands.

122.
The instrument appointing a proxy and Power of Attorney or other authority (if any) under
which it is signed or a notarially certified copy of that Power of Attorney or authority, shall be deposited
at the registered office of the Company forty-eight hours before the time for holding the meeting at
which the person named in the instrument proposes to vote and in default the instrument of proxy shall
not be treated as valid.
123.

Form of proxy

Every instrument of proxy whether for a specified meeting otherwise shall, as nearly as
circumstance will admit, be in any of the forms set out in Schedule IX of the Act, and sighed by the
appointer or his attorney duly authorised in writing or, if the appointer is a body corporate be under its
seal or be signed by any officer or attorney duly authorised by it.
124.

Validity of votes given by proxy not withstanding revocation of authority.

A vote given in accordance with the terms of instruments of proxy shall be valid
notwithstanding the previous death or insanity of the principal, or revocation of the proxy or of any
Power of Attorney under which the proxy is given, provided that no intimation in writing of the death,
insanity, revocation or transfer shall have been received by the Company at the office before the
commencement of the meeting, or adjourned meeting at which the proxy is used provided
nevertheless that the Chairman of any meeting shall be entitled to require such evidence as he may in
his discretion think fit of the due execution of an instrument of proxy and of the same not having been
revoked.
125.

Time for objection to vote

No objection shall be made to the qualification of any vote or to the validity of a vote except at
the meeting or adjourned meeting at which the vote adjourned to is given or tendered and every vote,
whether given personally or by proxy, not disallowed at such meeting shall be valid for all purpose.
Any such objection made in due time shall be referred to the Chairman of the meeting.
126.

Chairman of any meeting to be the judge of validity of any vote

The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at
such meeting. The Chairman present at the taking of a poll shall be sole judge of validity of every vote
tendered at such poll. The decision of the Chairman shall be final and conclusive.
127.

Custody of instrument

29

If any such instrument of appointment be confined to the object of appointing an attorney or

proxy for voting at meetings of the company, it shall remain permanently or for such time as the
Directors may determine, in the custody of the Company. I embracing other objects, copy thereof
examined with the original shall be delivered to the Company to remain in the custody of the
Company.
128.
Unit otherwise decided by a general meeting of the Company and subject to the provision of
section 252 of the Act the Number of Directors shall not be less than 3 and not more than 12
129.

First Directors
The following are the first Directors of Company :
1.
2.
3.

Vivek Agarwal
S.K. Pansari
Smt. Ansuya Devi Agarwal

130.
The Directors may elect one of their body to the office of the Chairman of the Board of
Directors and determine the period for which he is to hold office.

131.

Limit of number of retiring Directors

Not less than 2/3rd of the total number of Directors for the time being shall be those whose
period of office is liable for determination to retirement by rotation; and their appointment shall, save as
otherwise expressly provided in these presents by the Company in General Meeting.
132.

Appointments of Alternate Director

The Board may appoint an alternate Director to act for a Director (hereinafter in this Articles
called "the original Director'' to act for him during his absence for a period of not less than three
months from the State in which meetings of the Board are originally held. Every such alternate
Director shall subject to his giving to the Company and address in India at which notice may be served
on him, be entitled to notice of meeting of Directors and to attend and vote as a Director and be
counted for the purposes of a quorum and generally at such meetings to have and exercise all the
powers and duties and authorities of the original Director. The Alternate Director is appointed under
this Articles shall vacate office as and when the original Director returns to the State of Kerala if the
term of office of original Director is determined before he returns to the state aforesaid any provision in
the Act or in these Articles for automatic re-appointment of retiring Director in default of another
appointment shall apply to the original Director and not the Alternate Director.
133.
The Directors shall have power at any time and from time to time to appoint any person to be
a Director to fill a casual vacancy. Such casual vacancy shall be filled by the Board of Directors at a
meeting of the Board. Any person so appointed shall hold office only upto the date upto which the
Director in whose place he is appointed would have held office.
134.

Additional Directors

The Directors shall also have power at any time and from time to time to appoint any other
person to be a Director as an addition to the Board but so that the total number of Directors shall not at
any time exceed the maximum fixed. Any person so appointed as an addition to the Board shall hold
his office only upto the date of the next annual general meeting but shall be eligible for election at such
meeting.

30

135.

Nominee Director

Notwithstanding anything to the Contrary contained in these Articles, so long as any moneys
remain owing by the Company to the Industrial Development Bank of India (IDBI), Industrial Finance
Corporation of India (IFCI), The Industrial Credit Insurance Corporation of India (ICICI), Unit Trust of
India (UTI), General Insurance Corporation of India (GIC), National Insurance Limited (NCL). The
Original fire and General Insurance Corporation of India (OFGIC), The New India Assurance Company
Limited (NIA), United Insurance Company Limited (UI) or a State Financial Corporation or any financial
institution owned or controlled by the Central Government or a State Government or the Reserve Bank
of India or by two or more of them or by Central Government or a State by themselves (each of the
above is hereinafter in this Articles referred to as "the corporation'') out of any loans/debentures
assistance granted by them to the Company or so long as the Corporation holds or continues to hold
Debentures/shares in the company as a result of underwriting or by direct subscription or private
placement, or so long as any liability of the Company arising out of any guarantee furnished by the
Corporation shall have a right to appoint from time to time, any person or persons as a Director or
Directors, wholetime or non-whole time, (which Director or Directors is/are hereinafter referred to as
"Nominee Director/s'') on the Board of the Company and to remove from such office any person or
persons so appointed and to appoint any person or persons in his or their place/s.
The Board of Directors of the Company shall have no power to remove from office the
Nominee Director/s. At the option of the Corporation such Nominee Director/s shall not be required to
hold any share qualification in the Company. Also at the option of the Corporation such Nominee
Director/s shall not be liable to retirement by rotation of Directors. The Company agrees that if the
Board of Directors of the Company has constituted or purposes to constitute any management
committee or other committee (s), it shall if so required by the Corporation include the Nominee
Director as a member of such management committee or other committee or other committee/s
subject as aforesaid the Nominee Director/s shall be entitled to the same rights and privileges and be
subject to the same obligations as any other Director of the Company.
The Nominee Director/s so appointed shall hold the said office only so long as any moneys
remain owing by the Company to the Corporation or so long as the Corporation holds or continues to
hold office debentures/shares in the company as a result of underwriting or by direct subscription or
private placement or the liability of the Company arising out of the guarantee is outstanding and the
Nominee Director/s so appointed in exercise of the said powers shall vacate such office immediately
on the monies owing by the Company to the Corporation are paid of or on Corporation ceasing to hold
debenture/s shares in the Company or on the satisfaction of the liability of the Company arising out of
the guarantee furnished by the Corporation.
The Nominee Director/s appointed under this Article shall be entitled to receive all notices of
and attend all general meetings, board meetings and the meetings of the committee of which the
Nominee Director/s is/are member/s as also the minutes of the such meetings. The Corporation shall
also be entitled to receive all such notice and minutes.
The Nominee Director/s shall be entitled to the same sitting fees, commission, remuneration
and expenses are as application to the other Directors of the Company. The Company shall pay the
sitting fees and other expenses to the Nominee Director/s directly but the Commission, remuneration
or other monies and fees to which the Nominee Directors is entitled shall accure due to the
Corporation and shall accordingly be paid by the Company directly to the Corporation.
Provided that if any such Nominee Director/s is an officer of the Corporation, the sitting fees,
in relation to such Nominee Director/s shall also accure to the Corporation and the same shall
accordingly paid by the company directly to the corporation.
Any expenses that may be incurred by the Corporation or such Nominee Director/s in
connection with the appointment or directorship shall also be paid or reimbursed by the Company to
the Corporation or, as the case may be, to such Nominee Director/s.

31

Provided also that in the event of Nominee Director/s being appointed as the whole-time
Director/s such Nominee Director/s shall exercise such powers and duties as may be approved by the
Corporation and such rights as are usually exercised or available to a whole time Director in the
management of the affairs of the Company. Such whole-time Director/s shall be entitled to receive
such remuneration, fees, commission and monies as may be approved by the Corporation.
136. Debenture Directors
Any Trust Deed for securing debentures or debentures stock may, if so arranged provide for
the appointment from time to time by the trustees thereof or by the holders of the debentures or
debenture stock from time to time to remove any director so appointed. A Director appointed under
the Article is herein referred to as a "Debenture Director'' and the term "Debenture Director'' means a
Director for the time being in office under this Article. A debenture director shall not be bound to hold
any qualification shares and shall not be liable to retire by rotation or be removed by the Company.
The trust deed may contain such accillary provisions as may be arranged between the Company and
the trustees and all such provisions shall have effect notwithstanding any of the provisions herein
contained.
137.
Notwithstanding anything contained in these Articles, a Director may be appointed as a
permanent Director and Chairman of the Company and he or any person so authorised by him in
writing shall have the power to nominate any person or persons of his choice as Director/s of the
Company. So however that the number of his nominee directors, including the Directors if any,
appointed pursuant to whereof, shall not exceed one third of the total number of Directors holding
Office for the time being. Such nominated Directors shall not be liable to retire by rotation, so however
that the Permanent Director shall also have the power to remove such Directors nominated by him and
to replace them as also to fill in any casual vacancy caused in the office of any such Director/s.
138.

Qualification of Directors
A Director need not hold any qualification shares.

139.

Rights of Directors.

Except as otherwise provided by these Articles all Directors of the Company shall have in all
matters equal rights and privileges and be subject to equal obligation and duties in respect of the
affairs of the Company.
140.

Remuneration of Directors

1.
Subject to the provisions of the Act, a Managing Director or a Director who is in the
whole-time employment of the Company may be paid remuneration either by way of a monthly
payment or as a specified percentage of the net profit of the Company or partly by one way and party
by the other.
2.
Subject to the provision of the Act, a Director, who is neither in the whole-time
employment not a managing Director may be paid remuneration either.
i)
by way of monthly, quarterly or annual payment with the approval of the Central
Government, or
ii)
payment.

by way of commission if the Company by a Special resolution has authorised

3.
The fee payable to a Director (other than a Managing or whole-time Director, if any)
for attending each meeting the Board of Committee thereof shall be Rs. 750/- or such other sum as
may be prescribed under the Companies Act read with the relevant Rules there of from time to time.

32

141.

Extra remuneration to Directors for special work

Subject to the provisions of Section 198, 309, 310, 311 and 314 of the Act, if any Director
being willing, shall be called upon to perform extra service (which expression shall include work done
by a Director as a member of any committee formed by the Director or in relations to signing Share
Certificates) or to make special exerctions in going or residing out of his usual place of residence or
otherwise for any of the purposes of the Company the company shall remunerate the Director so doing
either by a fixed sum or other wise as may be determined by the Directors, and such remuneration
may be, either in addition to or in substitution for his share in the remuneration above provided.
142.

Travelling expenses incurred by Directors on Company's business

The Board of Directors may, subject to the limitations provided by the Act, allow and pay to
any Director who attend a meeting of the Board of Directors or any Committee thereof or a general
meeting of the Company or travels in connection with the business of the Company at a place other
than his usual place of residence such sum as the Board may consider fair compensation for
travelling, hotel and other incidental expenses properly incurred by him, in addition to his fee for
attending such meeting as above specified.
143.

Director may act notwithstanding vacancy

The continuing Directors or Director may act notwithstanding any vacancy in their body, but if
and so long as their number is reduced below the quorum fixed by these Articles for a meeting of the
Board of Directors the continuing Directors or Director may act for the purpose of increasing the
number of Directors to that fixed for the quorum or for summoning a general meeting of the Company,
but for no other purpose.
144.

Board resolution necessary for certain contracts

1.
Except with the consent of the Board of Directors of the Company, a Director of the
Company, or his relative, a firm in which such a Director or relative is partner, any other partner in
such a firm or a private company of which the Director is a member or director, shall not enter into any
contract with the Company.
a.

for the sale, purchase or supply of goods, material or services; or

b.

for underwriting the subscription of any shares in or debentures of the Company

2.

Nothing contained in clause of sub-clause (1) shall affect :

a.
the purpose of goods and material from the Company, or the sale of goods and
materials to the Company, by any Directors relative, firm partner or private Company as aforesaid for
cash at prevailing market price; or
b.

for underwriting the subscription of any shares in or debentures of the Company

2.

Nothing contained in clause a of sub-clause (1) shall affect :

a.
the purpose of goods and material from the Company, or the sale of goods and
materials to the Company, by any Director relative, firm partner or private Company as aforesaid for
cash at prevailing market price; or
b.
any contract or contracts between the Company on one side and any such Director,
relative, firm partner or private Company on the other for sale, purchase or supply of any goods
material and service in which either the Company or the Director, relative, firm, partner or private
Company as the case may be regularly trades or does business, PROVIDED THAT such contract or

33

contracts do not relate to goods and materials the value of which or services the cost of which
exceeds five thousand rupees in the aggregate in any year comprised in the period of the contract or
contracts.
3.
Notwithstanding anything contained in sub-clause (1) and (2) hereof, a Director,
relative, firm, partner or private company as aforesaid may, in circumstances of urgent necessity,
enter, without obtaining the consent of the Board, into any contract with the Company for the sale,
purchase or supply of any goods, materials or services even if the value of such goods or cost of such
service exceeds rupees five thousand in the aggregate in any year comprised in the period of the
Contract, but or cost of such service exceeds rupees five thousand in the aggregate in nay year
comprised in the period of the Contract, but in such a case, the consent of the Board shall be obtained
at a meeting within three months of the date on which the contracts was entered into.
4.
Every consent of the Board required under sub-clause (1) of this Articles shall be
accorded by a resolution passed at a meeting of the Board and the same shall not be deemed to have
been given within it was entered into.
145.

The provisions of section 302 of the Act shall be complied with when the Company :-

1.
enters into a contract for the appointment of a Managing Director or whole-time
Director in which contract any Director of the Company is in any way whether directly concerned or
interested; or

146.

Disqualification of Directors
A person shall not be capable of being appointed Director of the Company, if :

1.
he has been found to be of unsound minds by a Court of competent jurisdiction and
the finding is in force;
2.

he is undischarged insolvent ;

3.

he has applied to be adjudged an insolvent and his application is pending;

4.
he has been convicted by a court of any offence involving moral turpitude and
sentenced in respect thereof to imprisonment for not less than six months and the period of five years
has not elapsed from the date of expiry of the sentence
5.
he has not paid any call in respect of shares of the Company held by him whether
alone or jointly with others and six months have elapsed from the last day fixed for the payment of the
call; or
6.
an order disqualifying him for appointment as Director has been passed by a Court in
pursuance of Section 203 of the Act and in force; unless the leave of the Court has been obtained for
his appointment in pursuance of that Section.
147.

Vacation of office of Directors

1.

The office of the Director shall become vacant if;

a.

he is found to be unsound mind by a court of competent jurisdiction; or

b.

he applied to be adjudicated or insolvent; or

c.

he is adjudged an insolvent; or

34

d.
he is convicted by a court of any offence involving moral turpitude and sentenced in
respect thereof to imprisonment for not less than six months; or
e.
he fails to pay any call in respect of shares of company held by him whether alone or
jointly with others, within six months from the last date fixed for the payment of the call unless the
Central Government has by a Notification in the Official Gazatte remove the disqualification incurred
by such failure; or
f.
he absents himself from three consecutive meetings of the Board of Directors, or from
all meetings of the Board for a continues period of three months, whichever is longer, without obtaining
leave of absence from the Board; or
g.
he (whether by himself or by any person for his benefit or on his account) or on his
account or any firm in which he is a partner or any private company of which he is a director accepts a
loan or any guarantee or security, for a loan from the Company in contravention of Section 295 of the
Act; or
h.
he being in any way whether directly or indirectly concerned or interested in a contract
or arrangement or proposes contract or arrangement, entered into or to be entered into by or on behalf
of the Company fails to disclose the nature of his concern or interest at a meeting of the Board of
Directors as required by Section 299 of the Act; or
i.

he becomes disqualified by an order of the Court under Section 203 of the Act; or

j.
he is removed by an ordinary resolution of the Company before the expiry of his
period of office in accordance with the provisions contained in Section 284 of the Act; or
k.

if by notice in writing to the company, he resign his office; or

l.
having been appointment a Director by virtue of his holding any office or other
employment in the Company, he ceases to hold such office or other employment in the Company.
2.
Notwithstanding anything contained in sub-clause (1) hereof the disqualification
referred to in those clauses shall not take effect:a.

for thirty days from the date of adjudication sentence or order;

b.
where any appeal or petition is preferred within the thirty days aforesaid against the
adjudication sentence or conviction resulting in the sentence or order until the expiry of seven days
from the date on which such appeal or petition is disposed of; or
c.
where within the seven days aforesaid any further appeal or petition is preferred in
respect of the adjudication sentence, conviction or order and the appeal or petition is allowed would
result in the removal of the disqualification unit such further appeal or petition is disposed of.
3a.
The Company may (subject to the provision of Section 284 and other applicable
provisions of the Act and these articles) by ordinary resolution remove any Director (not being a
Director appointed by the Central Government in pursuance of Section 408 of the Act) before the
expiry of his period of office.
b.
Special Notice as provided by these Articles and Section 190 of the Act shall be
required of any resolution to remove a Director under this Articles or to appoint some other persons in
place of a Director so removed at the meeting at which he is removed.
c.
On receipt of notice of resolution to remove a Director under this Article, the Company
shall forthwith send a copy thereof to the Director concerned, and the Director concerned, and the

35

Director (whether or not he is a member of the Company) shall be entitled to be heard on the
resolution at the meeting.
d.
Where notice is given of a resolution to remove a Director under this Articles and the
Directors concerned makes with respect thereto representations in writings to the Company (not
exceeding a reasonable length) and request their notification to members of the Company, the
Company shall unless the representations are received by it too late for its to do so - (a) in the notice
of the resolution given to members of the company State the fact of the representation having been
made, and (b) send a copy of the representation to every member of the Company to whom notice of
the meeting is sent (whether before or after the receipt of representation by the Company) and if a
copy of the representation is not sent as aforesaid because they were received too late or because of
the Company's default, the Director may (without prejudice to his right to be heard orally) require that
the representation shall be read out at the meeting Provided that copies of the representation need not
be sent or read out at the meeting if on the application either of the Company or of any other person
whom claims to be aggrieved, the Court is satisfied that the right conferred by this sub-clause are
being abused to secure needless publicity for defamatory matter.
e.
A vacancy created by the removal of a Director under this Article may, if he had been
appointed by the Company in General Meeting or by the Board in pursuance of Article 134 or Section
262 of the Act, be filled by the appointment of another Director in his stead by the meeting at which he
is removed; Provided special notice of the intended appointment has been given under sub-clause (3)
(b) hereof. A Director so appointed shall hold office until the date upto which his predecessor would
have held office if he has not been removed as aforesaid;
f.
If the vacancy is not filled under clause (e), it may be filled as a casual vacancy in
accordance with the provisions, in so far as they are applicable of Articles 134 or Section 262 of the
Act, and all the provisions of the Article and Section shall apply accordingly.
g.
A Director who was removed from office under this Article shall not be reappointed as
a Director by the Board of Directors.
h.

Nothing contained in this Article shall be taken

i.
as depriving a person removed hereunder of any compensation or damages payable
to him in respect of the termination of his appointment as Director or of any appointment terminating
with that as Director or
ii.

as derogating from any power to remove a Director which may exist apart from this

Article
148.

Disclosure of interest by Director

1.
Every Director of the Company who is in any way whether directly or indirectly,
concerned or interested in a contract or arrangement or proposed contract or arrangement entered
into or be entered into, by or on behalf of the Company, shall disclose the nature of his concern or
interest at a meeting of the Board of Directors in the manner proved in Section 299 (2) of the Act.
2. a. In the case of a proposed contract or arrangement, the disclosure required to be made by
a Director under Sub-clause (1) shall be made at the meeting of the Board at which the question of
entering into the contract or arrangement first taken into consideration, or if the Director was not, at the
date of that meeting concerned or interested in the proposed contract arrangement, at the first meeting
of the Board held after he be so concerned or interested;
b.
In the case of any other contract or arrangement, the required disclosure shall be
made at the first meeting of the Board held after the Director becomes concerned or interested in the
contract or arrangement.

36

3. a. For the purpose of sub-clause (1) and (2) a general notice given to the Board by a
Director, to the effect that he is a Director or a member of a specified body corporate or is a member of
a specified firm and is to be regarded as concerned or interested in any contract or arrangement which
may, after the date of the notice be entered into with that body corporate or firm shall be deemed to be
sufficient disclosure of concern or interest in relation to any contract or arrangement so made;
b.
Any such general notice shall expire at the end of the financial year in which it is given
but may be renewed for further period of one financial year at a time by a fresh notice given in the last
month of financial year in which it would otherwise expire:
c.
No such general notice, and no renewal thereof, shall effect unless either it is given at
a meeting of the Board or the Director concerned takes reasonable steps to secure that it is brought
up and read at the first meeting of the Board after it is given.
d.
Nothing in this Articles shall apply to any contract or arrangement entered into or to be
entered into between the Company and any other Company where any one or more of the Directors of
the Company together holds or hold not more than two percent of the paid up share capital in the
other company.

37

ROTATION & APPOINTMENT OF DIRECTORS

149.

Directors may be Directors of Companies promoted by the Company

If a Director of the Company is a Director of any Company promoted by the Company or in

which it may become interested as a vendor, shareholder, or otherwise such Director shall not be
accountable for any benefits received as Director of shareholder of such company except in so far as
Section 309 (6) or Section 314 of the Act may be applicable.
150.

Rotation of Directors

Not less than two-third of the total number of Director shall (a) be person whose period of he
office is liable to determination by retirement of directors by rotation and (b) save as otherwise
expenses provided in these Articles by appointed by the Company in general meeting.
151.

Retirement of Directors

Subject to the provisions of Section 256 of the Act and Articles 129, 130 to 133 at every
annual general meeting of the Company one-third of such of the Directors for the time being as are
liable to retire by rotation, or if their number is not three or a multiple of three the nearest number to
One-third shall retire from offices. Subject to the provisions of Articles 156 the Chairman, the
Managing Director or whole-time Director, if any, shall not be subject to retirement under this Article
and shall not be taken into account in determining the number of Directors to retire by rotation. In
these articles a "Retiring Director'' means a Director retiring by rotation.
152.

Ascertainment of Directors by retiring and filling of vacancies Eligibility for re-election

Subject to Section 256 of the Act, the Director to retire by rotation under Article 147 at every
general meeting shall be those who have been longest in office since their last appointment, but as
between those who become Directors on the same day, those who are to retire shall, in default of and
subject to any agreement amongst themselves, be determined by lot.
153.

Company to fill vacancies

A retiring Director shall be eligible for re-election

154.
Subject to Section 258, 259 and 284 of the Act, the company at the general meeting at which
a Director retires in manner aforesaid may fill up vacancy by appointing the retiring Director or some
other person thereto.
155. 1. If the place of retiring Director is not so filled up and the meeting has not expressly resolved
not to fill the vacancy, the meeting shall stand adjourned till the same day in the next week at the
same time and place, or if that day is a public holiday till the next succeeding day which is not a public
holiday, at the same time and place.
2.
If the adjourned meeting also, the place of the retiring Director is not filled up and that
meeting also has not expressly resolved not to fill the vacancy, the retiring Director shall be deemed to
have been reappointed at the adjourned meeting unless;
a.
at the meeting or the previous meeting a resolution for the re-appointment of such
Director has been put to the meeting and lost.
b.
the retiring Director has, by a notice in writing, address to the Company or its Board of
Directors expressed his willingness to be so reappointed;
c.

he is not qualified or is disqualified for appointment;

38

d.
a resolution, whether special or ordinary is required for his appointment or reappointment by virtue of any provisions of the act, or
e.
156.

the provisions of sub-section (2) of Section 263 of the Act is applicable to the case

Company may increase or reduce the number of Directors

Subject to the provisions of Section 252, 255 and 259 of the Act the Company may be passed
ordinary resolution, from time to time increase or reduce the number
157.

Appointment of Directors to be voted individually

1.
No motion at any general meeting of the Company shall be made for the appointment
of two or more persons as Directors of the Company by a single resolution, unless a resolution that it
shall be so made has first been agreed to by the meeting without any vote given against it.
2.
A resolution moved in contravention of sub-clause (1) hereof shall be void, whether or
not objection so moved Provided that where a resolution so moved is passed no provisions for the
automatic reappointment of the retiring Director in default of another appointment as hereinbefore
provided shall apply.
For the purpose of this Article, a motion for approving a persons appointment or for
nominating a person or appointment shall be treated as a motion for his appointment.
158.

Notice of candidature for office of Director except in certain cases

1.
No person, not being a Retiring Director, shall be eligible for election to the office of a
Director at any general meeting unless he or some of the member intending to purposes him has, at
least fourteen days before the meeting left at the registered office of the Company a notice in writing
under his hand signifying his candidature for the office of a Director of the intention of such member to
purpose him as a Director for that office, as the case may be.
2.
The Company shall inform its members of the Candidature of the person for the office
of Director or the intention of a members to purpose such person as a candidate for that office by
serving individual notices on the members not less than seven days before the meeting.
Provided that it shall not be necessary for the Company to serve individual upon the members
as aforesaid if the Company advertises such candidature or intention not less than seven days before
the meeting in at least two newspaper circulating in the place where the registered office of the
Company is located, of which one is published in the English language to manage the affairs and
other in the regional language of the place.
3.
Every person (other than a Director retiring by rotation or otherwise or a person who
has left at the office of the Company a notice under Section 257 of the Act signifying his candidature
for the office of a Director) proposed as a candidature for the office of a Director shall sign and file with
the Company his consent in writing to act as a Director, if appointed.
4.

A person other than:

a.
a Director re-appointed after retirement by rotation or immediately or the expiry of his
terms of office or
b.
an additional or alter to Director, or a person filling a casual vacancy in the office of
Director under Section 262 of the Act, appointed as a Director or re-appointed as an additional or
alternate Director immediately on the expiry of his term of office shall not act as a Director of the
company unless he has within thirty days of his appointment signed and filed with the Registrar his
consent in writing to act as such Director.

39

159.

Disclosure by Directors of their holding of shares and debentures of the Company

Every Director and every person deemed to be Director of the Company by virtue of Subsection 10 of Section 307 of the Act shall give notice to the Company of such matters relating to
himself as may be necessary for the purpose of enabling the Company to comply with the provisions
of that Section. Any such notice shall be given in writing and if it is not given at a meeting of the
Board, the person giving that notice shall take all reasonable steps to secure that it is brought up and
read at the first meeting of the Board next after it is given.
MANAGING DIRECTOR OR WHOLE - TIME DIRECTOR
160.

Board may appoint Managing Director(s) or whole-time Director (s)

Subject to the provisions of the Act and these Articles, the Directors shall have power to
appoint from time to time one or more of their body to be Managing Director or Managing Directors or
whole-time Director or whole-time Directors of the Company for such term not exceeding five years at
a time as they may think fit of Directors and may after qualifications and business of the Company and
may from time to time (subject to the provisions of any control between him or them and the Company)
remove of dismiss him or them from office and appoint another or others in his or their place or places.
161.

What provisions they will be subject to

Subject to the provisions of the Act and these Articles; the Managing Director or the wholetime Director shall not while he continues to hold that office be subject to retirement by rotation under
Articles 148 but he shall be subject to the provisions of any contract between him and the company
and he subject to the same provisions as to the registration and removal as the other Directors of the
Company and he shall also fact and immediately cease to be a Managing Director or whole-time
Director if he cease to hold the office of Director for any cause provided that if any time the number of
Director (including Managing Director or Whole-time Director) as are not subject to retirement by
rotation shall exceed one-third of the total number of the Director for the time being, then such of the
Managing Director on whole-time Directors or two or more of them as the Director may from time to
time determine shall be liable to retirement by rotation in accordance with the Article 149 to the intent
that the number of Director not liable to retirement by rotation shall not exceed one-third of the total
number of Directors for the time being.
162.

Remuneration of Managing or Whole-time Director(s)

The remuneration of the Managing Director or Whole-time Director shall (subject to Section
198, 269, 309, 310, 311 and other applicable provisions of the Act and of these Articles and of any
contract between him and the Company) be fixed by the Directors from time to time and may by way
of fixed salary and/or perquisites or commission on profits of the company or by participation in such
profits, or by any or all these modes or any other mode not expressly prohibited by the Act.
163.

Powers and duties of Managing & or Whole-time Director(s)

Subject to the superintendence, control and direction of the Board the day to day management
of the Company shall be in the hands of the Managing Directors or Whole-time Directors appointed
under Articles 157 with Power to the Board to distribute such day to day management functions
among such Directors in any manner as deemed fit by the Board and the subject to the provisions of
the Act and these Articles the Board may by resolution vest any such Managing Directors or wholetime Director or Whole-time Directors with such of the power hereby vested in the Board generally as it
thinks fit and such powers may be made exercisable for such period or periods and upon such
conditions and subject to such restrictions as it may determine and may subject to the provisions of
the Act and these Articles confer such power either collaterally with or to the exclusion of or
substitution for all or any of the powers of the Director in that behalf and may from time to time revoke,
withdraw, alter or vary all or any of such powers.

40

PROCEEDINGS OF THE BOARD OF DIRECTORS

164.

Meeting of Directors

The Directors may meet together as a Board for the despatch of business from time to time,
and unless the Central Government by virtue of the proviso to Section 285 of the Act otherwise directs,
shall so meet at least once in every year. The Director may adjourned and otherwise regulate these
meetings as they think fit. The provisions of this articles shall be deemed to have been contravened
merely by reason of this fact that the meeting of the Board which had been called in compliance with
the terms of this article could not be held for want of a quorum.
165.

Notice of Meeting

1.
Notice of every meeting or the Board of Directors shall given in writing to every
directors for the time being in India, and his usual address in India to every other Directors. The notice
shall specify the time and place of the meeting.
When meeting to be convened
2.
A Director may at any time and the Secretary upon the request of a Director made at
any time shall convene a meeting of the Board of Directors by giving a notice in writing to every
Directors for the time being in India and at his usual address in India to every other Director.
166.

Quorum

1.
Subject to Section 287 of Act, the quorum for a meeting of the Board of Directors shall
be one-third of its total strength (excluding Directors, if any, whose place may be vacant at the time
and any fraction conctrained in that one-third being rounded off as one) or two Directors whichever is
higher, PROVIDED that where at any time number of interested Directors at any meeting exceeds or
is equal to two-third of the total strength, the number of the remaining Director that is to say, the
number of Directors who are not interested present at the meeting being not less than two shall be the
quorum during such time.
2.

For the purpose clause (1)

i.
"Total Strength'' means total strength of the Board of Directors of the Company as
determined in pursquence of the Act, after deducting therefrom number of Directors, if any whose
place may be vacant at the time; and
ii.
"Interested Directors'' means any Director whose presence cannot by reason of any
provisions in the Act, count for the purpose of forming a quorum at a meeting of the Board, at the time
of any discussion or vote on any matter.
167.

Procedure when meeting adjourned for want of quorum

If a meeting of the Board could not be held for want of quorum, then, the meeting shall
automatically stand adjourned till the same day in the next week, at the same time and place, or if that
day is public holiday, till the next succeeding day which is not a public holiday at the same time and
place.

41

168.

Chairman

The Director from among their members may elect a Chairman of the Board of Directors. If at
any meeting the Chairman is not present at the time appointed for holding the same, the Directors
present shall choose one of their members to be the Chairman of such meeting.
169.

Question at Board meeting how decided

Subject to provision of Section 316, 372 (5) and 386 of the Act, question arising at any
meeting of the Board shall be decided by a majority of votes and in case of an equality of votes the
chairman shall have a second or casting vote.
170.

Powers of Board meeting

A Meeting of the Board of Directors for the time being at which a quorum is present shall be
competent to exercise all or any of the authorities, powers and discretions which by or under the Act or
these Articles or the regulations for the time being of the Company are vested in or exercisable by the
Board of Directors generally.
171.

Directors may appoint committee

The Board of Directors may subject to the provisions of the Section 292 and other relevant
provision of the Act and these Articles delegate any of the powers other than the power to make calls
to issue debentures, such committee or committees and may from time to time revoke and discharge
any such committee of the Board either wholly or in part and either as to the purpose or purposes, but
every committee of the Board so formed shall in exercise of the power so delegated, conform to any
regulations they may from time to time by imposed on it by the Board of Directors. All acts done by
any such committee of the Board in conformity with such regulations and in fulfillment of the purpose
of their appointments, but not otherwise, shall have the like force and effect as if done by the Board.
172.

Meeting of the Committee how to be governed

The meetings and proceedings of any such committee of the Board consisting of two or more
members shall be governed by the provisions herein contained for regulating the meeting and
proceedings of the Directors, so far as the same are applicable thereto and are not superseded by any
regulations made by the Director under the last proceeding Article.
173.

Circular resolution

1.
A resolution passed by circular without a Board or a Committee of the Board
appointed under Articles 167 shall subject to the provisions of sub-clause (2) hereof and the Act be as
valid and effectual as the resolution duly passed at a meeting of the Directors or of a Committee duly
called and held.
2.
A resolution shall be deemed to have been duly passed by the Board or by a
committee thereof by circulation, if the resolution, has been circulated in draft together with necessary
paper, if any, to all the Directors, or to all the members of the Committee, then in India not being less
in number than the quorum fixed for a meeting of the Board or Committee, (as the case may be and
do all other Directors or members of the Committee at their usual addresses in India and has been
approved by such of the Directors or members of the committee as are then in India, or by a majority
of such of them as are entitled to vote on the resolution.
174.

Act of Board or committee valid notwithstanding defect in appointment

All acts, done at any meeting of the Board, by a Committee of the Board or by any person
acting as a Director shall, notwithstanding that it shall afterwards be discovered that there was some
defect in the appointment of one or more of such Directors or any person acting aforesaid, or that they

42

or any of them were disqualified or hand vacated office or that the appointment of any of them is
deemed to be terminated by virtue of any provisions of the Act or these Articles, be as valid as if every
such person had been duly appointed and was qualified to be a Directors PROVIDED that nothing in
the Article shall be deemed to give validity to act done by a Director after his appointment has been
shown to the Company to be invalid or to have terminated.
POWER OF THE BOARD
175.

General power of Management vested in Director

The Business of the company shall be managed by the Directors who may exercise all such
powers of the company and do all such acts and things as are not by the Act, or any other act or by
the Memorandum or by these Articles required to be exercised by the Company in general meeting,
subject nevertheless to any regulation of these Articles, to the provisions of the Act, or and other Act
and of such regulations being not in consistent with the aforesaid regulations, or provisions as may be
prescribed by the Company in general meeting but no regulations made by the Company in general
meeting shall invalidate any prior act of the Director which would have been valid if that regulation has
not been made. PROVIDED the Board of Director shall not, except with the consent of the Company
in general meeting.
1.
sell, lease or otherwise dispose of the whole, or substantially the whole, of the
undertaking of the Company, or where the Company owns more than one undertaking of the whole
substantially the whole of any such undertaking.
2.

remit, or give for the repayment of, any debt due by a Director.

3.
invest otherwise than in trust securities the amount of compensation received by the
company in respect of the compulsory acquisition, of any such undertaking as is referred to in clause
(1) or of any premises or properties used for any such undertaking and without which it cannot be
carried on or can be carried on only with difficulty or only after a considerable time.
4.
borrow moneys where the moneys to be borrowed together with the moneys already
borrowed by the Company (apart from temporary loans obtained from the Company's bankers in the
ordinary course of business) will exceed the aggregate of the paid up capital of the Company and its
fees reserves that is to say, reserves not set apart from any specific purpose, or
5.
contribute to charitable and other funds not directly relating to the business of the
company or the welfare of its employees, any amounts the aggregate of which will, in any financial
year, exceed fifty thousand rupees or five percent of its average net profits as determined in
accordance with the provisions of Section 349 and 350 of the Act during the three financial years
immediately preceding, whichever is greater.
i.
provided that in respect of the matter referred to in clause (4) and (5) such consent
shall be obtained by a resolution of the company which shall specify the total amount upto which
money may be borrowed by the Board of Directors under clause (4) or as the case may be total
amount which may be contributed to charitable or other funds in any financial year under clauses (3).
ii.
Provided further that the expression "temporary loans'' in clause (4) above shall mean
loans repayable on demand or within six month from the date of the loan such as short term, cash
credit arrangements, the discounting of a seasonal character but does not include loans raised for the
purpose of financial expenditure of a capital nature.
176.

Certain powers to be executive by the Board only at meetings

Without derogating from the powers vested in the Board of Directors under these articles the
Board shall exercise the following powers on behalf of the Company and they shall do so only by
means of resolutions passed at the meeting of the Board:-

43

a.

the powers to make calls on share;

b.

the power to issue debentures;

c.

the power to borrow money otherwise than on debentures;

d.

the power to invest the funds of the company;

e.

the power to make loans;

Provided that the Board may by a resolution passed at a meeting delegate to any committee
of Directors, Managing Directors or any other principal officer of the company, the powers specified in
clause (c), (d) and (e) of this sub-clause to the extent specified below on such conditions as the Board
may prescribed.
2.
Every resolution delegating the power referred to in sub-clause (1) (c) shall specify the
total amount, outstanding at any one time, upto which moneys may be borrowed by the delegate.
3.
Every resolution delegating the power referred to in sub-clause (1) (d) shall specify
the total amount upto which the funds of the company may be invested and the nature of investments
which may be made by the delegate.
4.
Every resolution delegating the power referred to in sub-clause (1) (e) shall specify
the total amount upto which loans may be made by the delegates, the purpose for which the loans
may be made and the maximum amount of the loans which may be made for each such purpose in
individual cases.
177.

Certain Powers of the Board

Without prejudice to the general powers conferred by Article 160 and so as not in way to limit
or restrict those powers and without prejudice to the other powers conferred by these articles but
subject to the restrictions contained in the last preceding Article. It is hereby declared that the Director
shall have the following powers that is to say power :1.
to pay and charge to the Capital Account of the Company any commission or interest,
lawfully, payable there-out under the provisions of Section 76 and 208 of the Act.
2.
subject to provisions of Section 292 and 297 and other applicable provisions of the act
to purchase or otherwise acquire for the Company any property, right or privileges, which the company
is authorised to acquire or for such price or consideration and generally on such terms and conditions
as they may think fit and in any such purchase or other acquisition accept such title as the Directors
may be believe or may be advised to be reasonably satisfactory;
3.
at their discretion and subject to the provisions of the Act to pay for any property rights
or privileges acquired by or services rendered to the Company, either wholly or partially in cash or in
shares, bonds, debentures, mortgages or other securities of the Company, and any such shares may
be issued either as fully paid up or with such amount credited as paid up thereon as may be agreed
upon, and any such bonds, debenture, mortgages, or other securities may be either specifically
charges upon all or any part of the property of the Company and its uncalled capital or not so charged;
4.
to secure the fulfillment of any contracts or engagements entered into by the company
by mortgage or charge on all or any of the property of the company and its uncalled capital for the time
being or in such manner as they may think fit;
5.
to accept from any members so far as may be permissible by law, surrender of his
shares or any part thereof, on such terms and conditions as shall be agreed;

44

6.
to appoint any person to accept and hold in trust for the company property belonging
to the Company, or in which it is interested or far any other purposes, and to execute and to do all
such deeds and things as may be required in relation to any such trust, and to provide for
remuneration of such trustee or trustees;
7.
to institute, conduct, defend, compound or abandon any legal proceedings by or
against the company or its officer, or otherwise concerning the affairs of the company, and also to
compound and allow time for payment on satisfaction of any debt due, and of any claim or demand by
or against the company the company and to refer any difference to arbitration and observe the terms
of any awards made therein either according to Indian Law or according to foreign law and either in
India or abroad and observe and perform or challenge award made therein;
8.
to act on behalf of the company, in all matters relating to bankrupts and insolvents and
winding up and liquidation of companies;
9.
subject to the provisions of the Act, to execute in the name and on behalf of the
Company and indemnities and guarantees as may be necessary and to make and give receipts,
release and other discharges for moneys payable to the Company and for the claims and demands of
the Company.
10.
subject to the provision of Section 291, 292 (1), 295, 370, 372 and other applicable
provisions of the Act and other Articles to invest and deal with any moneys of the company not
immediately required for the purposes thereof, upon such security (not being the shares of his
company) or without security and in such manner as they may think fit, and from time to time to vary or
realise such investment, save as provided in section 49 of the Act, all investment shall be made and
held in the Company's own name;
11.
to execute in the name and on behalf of the Company in favour of any Director or
other person who may incur any personal liability whether as principal or surety, for the benefit of the
Company such mortgage of the Company's property (present and future) as they think fit, and any
such mortgage may contain a power of sale and other powers provisions, covenants agreements as
shall be agreed upon;
12.
to open bank account and to determine from time to time who shall be entitled to sign,
on the company's behalf, bills, notes, receipts, acceptances, endorsement, cheques, dividend warrant,
release, contract and documents to give the necessary authority for such purpose;
13.
to distribute by way of bonus amongst the staff of the company a share in the profits
of the company and to give to any Director, office or other person employed by the Company a
commission on the profits of any particular business or transaction, and to charge such bonus or
commission as a part of working expenses of the Company.
14.
to provide for the welfare of Directors or ex-Director or employees or ex-employees of
the Company and the wives, widows, and families or the dependants or connection of such person by
building or contribution to the building of houses, dwellings or shawls or by grants of moneys,
pensions, gratuities, allowances, bonus or other payments, creating and from time to time subscribing
or by contributing to provident funds and other associations, institutions, and by providing or
subscribing or contributing towards places of instruction and recreation, hospitals, dispensaries,
medical and other attendance and other assistance as the Board shall think fit, and subject to the
provisions of Section 293 (1) (c) of the act to subscribe or contribute or otherwise to assist or to
guarantee moneys to charitable, benevolent, religious, scientific, national or other institution or objects
which shall have any moral or other claims to support or aid by the Company either by reason of
locality of operation or the public and general utility or otherwise.
15.
Before recommending any dividend, to aside out of the profits of the Company such
sums as they may think proper for depreciation or the depreciation fund or to insurance fund, or as a

45

reserve fund or sinking fund, or any special or other fund or funds or account or accounts to meet
contingencies or to repay redeemable preference shares, debenture or debenture stock or for special
dividends or for equalising dividends or for repairing, improving, extending and maintaining any part of
the property of the company and for such other purposes (including the purposes referred to in the
preceding clause) as the Board may in their absolute discretion think conductive to the interest of the
Company, and subject to Section 292 of the Act, to invest the several sums so set aside or so much
thereof as required to be invested upon such investments (other than share of this Compound) as they
may think fit, and from time to time deal with and very such investment and dispose of and supply and
expend all or any part thereof for the benefit of the Company, in such manner and for such purpose as
the Board in their absolute discretion think conductive to the interest of the Company notwithstanding
that the matters to which the Board apply or upon which they expend the same or any part thereof
may be matters to or upon which the capital moneys of the Company might rightly be applied or
expended; and to divide the General Reserve or Reserve Fund into such special funds as the Board
may think fit; with full power to transfer the whole or any portion of a Reserve Fund or Division of a
Reserve Fund to another Reserve Fund and/or division of a Reserve Fund and with full power to
employ the assets constituting all or any of the above funds including the depreciation fund, in the
business of the Company or in purchase or repayment of redeemable preference shares, debenture or
interest on the same with power however to the Board at their discretion to pay or allow interest on the
same with power however to the Board at their discretion to pay or allow to the credit of such funds
interest at such rates as the Board may think proper.
16.
to appoint and at their discretion remove or suspend such general managers,
secretaries, assistants, supervisors, scientists, technicians, engineers, consultants, legal, medical or
economic advisers, research workers, labourers, clerks, agents and servants for permanent,
temporary or special services as they may from time to time think fit and to determine their powers and
to fix their salaries or emoluments or remuneration and to require security in such instances and to
such amounts as they may think fit and also from time to time to provide for the management and
transaction of the affairs of the Company in specified locality in India or elsewhere in such manner as
they think fit;
17.
from time to time an any time to establish any local board for managing any of the
affairs of the Company in any specified locality in India or elsewhere and to appoint any person to be
members of such local Board or Manager or agencies and to fix their remunerations;
18.
subject to Section 292 of Act, from time to time, and at any time to delegate to any
person so appointed any of the powers, authorities and discretion for the time being vested in the
board, other than their powers to make calls or to make loans or borrow moneys; and to authorise the
member for the time being of any such local board or any of them fill up any vacancies therein and to
act notwithstanding vacancies and such appointment or delegation may be made on such terms
subject to such conditions as the Board may think fit, and the Board may at any time remove any
person so appointed and may annual or very any such delegation;
19.
at any time and from time to time by Power of Attorney under the Seal of the
Company to appoint any person or persons to be the Attorney or Attorneys of the Company for such
purposes and with such powers, authorities and discretion (not exceeding those vested in or
exercisable by the Board under these presents and excluding the power to make calls and excluding
also except in their limits authorises by the Board the power to make loans and borrow moneys) and
for such period and subject favour of the members or any of the members of any local board
established as aforesaid or in favour of any company, or the shareholders, Directors, nominees or
manager of any or firm or otherwise in favour of any fluctuating body of persons whether nominated
directly or indirectly by the Board and any such powers of Attorney may contain such powers for the
protection or delegated attorneys as aforesaid to sub-delegating all or any other powers, authorities
and discretion for the time being vested in them.
20.
Subject to Section 294, 297, 300 and other applicable provisions of the Act, for or in
relation to any of matters aforesaid or otherwise for the purpose of the Company to enter into all such

46

negotiation and contract and rescind and vary all such contracts, and execute and do all such acts,
deeds and things in the name and on behalf of the Company as they may consider expedient;
21.
From time to time to make, vary and repeal bye-law for the regulation of the business
of the Company, its officer and servants;
22.
To purchase or otherwise acquire any lands, buildings, machinery, premises,
hereditaments, properties, effect, assets, right, credits, royalties, business and goodwill of any joint
stock company carrying on the business which the Company is authorised to carry on in any part of
India.
23.
To purchase, take on lease, for any term or terms of years, or otherwise acquire any
factories or any land or lands, with or without buildings and out-houses thereon, situate in any part of
India, at such price or rent and subject to such terms and conditions as the Directors may think fit and
in any such purchase lease or other acquisition to accept such title as the Directors may believe or
may be advised to be reasonable satisfactory;
24.
To insure and keep insured against loss or damage by fire or otherwise for such
period and to such extent as it may think proper all or any part of the buildings, machinery goods,
stores, produce and other movable property of the Company, either separately or jointly; also to insure
all or any portion of the goods, produce, machinery and other articles imported or exported by the
Company and to sell, assign, surrender or discontinue any policies of an insurance effected in
pursuance of this power;
25.
To purchase or otherwise acquire to obtain licence for the use of, and to sell,
exchange or grant licence for the use of any trade mark, patent, invention or technical knowhow.
26.
To sell from time to time any articles, materials, machineries, plants, stores and other
articles and things belonging to the Company as the Board may think proper and to manufacture,
prepare and well sell waste and by-product.
27.
From time to time extend the business and undertaking of the Company by adding to,
altering or enlarging all or any of the buildings, factories, workshops, premises, plant and machinery,
for the time being the property of or the possession of the Company, or by erecting new or additional
buildings, and to extend such sum of money for the purpose aforesaid or any of them as may be
thought necessary or expedient;
28.
To undertake on behalf of he Company any payment of all rents and the performance
of the convenient, conditions and agreement contained in or reserved by any lease that may be
granted or assigned to or otherwise acquired by the Company, and to purchase the reversion or
reversions, and otherwise to acquire the free-hold-simple of all or any of the lands of the company for
the time being held under lease or for an estate less than free-hold estate;
29.
To improve, manage, develop, exchange, lease sell, re-sell and re-purchase, dispose
of, deal otherwise turn to account, any property (movable or immovable) or any rights or privileges
belonging to or at the disposal of the Company or in which the company is interested;
30.
To let sell or otherwise dispose of subject to the provisions of Section 293 of the Act,
and of the other Articles any property of the Company, either absolutely or conditionally and in such
manner and upon such terms and conditions in all respect as they think fit and accept payment of
satisfaction for the same in cash or otherwise as they think fit.

47

MINUTES
178.

Minutes to be made

1.
The Company shall cause minutes of all proceedings of every general meeting of all
proceedings of every meeting of the Board of Directors are of every committee of the Board to be kept
by making within thirty days of the conclusion of every such meeting concerned entries thereof in
books kept for that purpose with their pages consecutively numbered.
2.
Each page of every such book shall be entitled or assigned and the last page of he
record of proceedings of each meeting in such books shall be dated and signed.
a.
in the case of minutes of proceedings of a meeting of the Board or of a Committee
thereof, by the Chairman of the said meeting or the chairman of the said meeting of the chairman of
the next succeeding meeting.
b.
in the case of minutes of proceedings of a general meeting by the Chairman of the
same meeting within the aforesaid period of thirty days or in the event of the death or inability of that
Chairman within that period by a Director duly authorised by the Board for the purpose
3.
In no case the minutes of proceedings of a meeting shall be attached to any such
books as aforesaid by pasting or otherwise
4.
The minutes of each meeting shall contain a fair and correct summary of the
proceeding thereof
5.
All appointments of officers made at any of the meetings aforesaid shall be included in
the minutes of the meeting
6.
In the case of meeting of the Board of Directors or a committee of the Board the
minutes shall also contain :a.

the name of the Directors present at the meeting and

b.
in the case of each resolution passed at the meeting the names of the Directors, if
any, dissenting from or not concurring in the resolution
7.
Nothing contained in clause (1) to (6) hereof shall be deemed to require the inclusion
in any such minutes of any matter which in the opinion of the Chairman of the meeting:a.

is, or could reasonably be regarded as defamatory of any person;

b.

is irrelevant or immaterial to the proceeding; or

c.

is detrimental to the interest of the Company

The Chairman shall exercise an absolute discretion in regard to the inclusion or noninclusion of any matter in the minutes not he ground specified in this sub-clause
179.

Minutes to be evidence of the proceedings

The minutes of proceedings of every general meeting of the proceedings of every meeting of
the Board of every committee kept in accordance with the provisions of Section 193 of the Act shall be
evidence of the proceedings recorded therein.

48

180.

Presumptions

Where the minutes of the proceedings of any general meeting of the Company or of any
meeting of the Board or of a committee of Directors have been kept in accordance with the provisions
of Section 193 of the Act then until the contrary is proved, the meeting shall be deemed to have been
duly called and held, and all proceeding thereat to have been duly taken place, and particular, all
appointment of Directors or Liquidators made at the meeting shall be deemed to be valid.
THE SECRETARY
181.

Secretary

The Directors may, from time to time appoint, and their discretion, remove any individual,
(hereinafter called "The Secretary'') to perform any functions, which by the Act and these Articles are
to be performed by the Secretary, and to execute any other ministerial or administrative duties, which
may, from time to time, be assigned to the Secretary by the Directors. The appointment of Secretary
shall be made according to the provisions of the companies (Secretary's qualifications) Rules, 1975.
182.

The seal its custody and use

1.
The Board of Directors shall provide common seal or the purpose of the company and
shall have power from time to destroy the same and substitute a new seal in lieu thereof, and the
Board shall provide or the safe custody of the seal, or the time being, under such regulations as the,
Board may prescribe.
2.
The seal shall not be fixed to any instrument except by the authority of the Board of
Directors or a Committee of the Board previously given and in presence of at least one Director and
the Secretary or any other person duly authorised by the Board, both of whom shall sign every
instrument to which the seal is affixed. Provide further that the certificates of share, debentures shall
be sealed in the manner and in conformity with the provisions of the Companies (Issue of Share
Certificates) Rules, 1960, and their statutory modification for the time being in force.
Provided nevertheless, that any instrument bearing the seal of the Company and issued for
valuable consideration shall be binding on the company notwithstanding any irregularity touching the
authority by the Board to issue the same.
DIVIDEND WARRANTS
183.

Division of profits

Subject to the rights of person if any entitled to shares with special rights as to dividends, all
dividends shall be declared and paid according to the amounts paid or credited as paid on the shares
in respect whereof the dividends are paid, but if and so long as nothing is paid upon any of shares in
the Company, dividends may be declared and paid according to the amounts of the shares.
2.
No amount paid or credited as paid on a share in advance of calls shall be treated for
the purpose of this regulation as paid on the share.
184.

The Company in general meeting may declare dividends

The company in general meeting may declare dividends, to be paid to members according to
their respective rights and interest in the profits and may fix the time for payment and the Company
shall comply with the provisions of Section 207 of the Act, but no dividends shall exceed the amount
recommended by the Board of Directors, but the Company may declare smaller dividend in general
meeting.

49

185.

Dividend out of profit only

No dividends shall be payable except out of profits of the company arrived at in the manner
provided for in Section 20 of the Act.
186.

Interim dividend

The Board of Directors may from time to time, pay to the members such interim dividends as
in their judgement the position of the Company justifies.
187.

Debts may be deducted

The Director may retain and dividend on which the company has a lien and may apply the
same in or towards the satisfaction of the debts, liabilities or engagement in respect of which the lien
exists.
188.

Capital paid-up in advance at interest not to earn dividend

Where the capital is paid advance of the calls upon the footing that the same shall carry
interest, such capital shall not, whilst carrying interest, confer a right to dividend or to participate in
profits.
189.

Dividends in proportion to amount paid up

All dividends shall be declared and paid proportionately to the amount paid or credited as paid
on the shares during any portion or portions of the period in respect of which the dividends is paid but
if any shares is issued on terms, providing that it shall rank for dividends as form a particular date
share shall rank for dividend accordingly.
190.
No number to receive dividend whilst in deeded to the company and the company's right of
reimbursement thereof
No member shall be entitled to receive payments of any interest or dividend or bonus in
respect of his share or shares, whilst any money may be due or owing from him to the Company in
respect of such share or shares (or otherwise however either alone jointly with any other person or
persons) and the Board of Directors may deduct from interest or dividend to any members all such
sums of money so due from him to the company.
191.

Effect of transfer of shares

A Transfer of shares shall not pass the right to any dividends declared there in before the
registration of the transfer.
192.

Dividend to joint holders

Any one of several persons who are registered as joint holders of any share may give
effectual receipts for all dividends bonus and payment on account of dividends in respect of such
share
193.

Dividend how remitted

The Dividend payable in cash may be paid by Cheque or warrant sent through post direct to
registered address of the share-holder entitled to the payment of the dividend or in case of joint
holders to the registered address of that one of the joint holder which is first named on the register of
member or to such person and to such address as the member in writing direct. The Company shall
not be liable or responsible for any Cheque or warrant or pay slip or receipt lost in transmission or far
any dividend lost, to the member or person entitled thereto by endorsement of any cheque or warrant

50

or forged signature or any payslip or receipt or the fraudulent recovery of the dividend by any other
means.
194.

Notice of dividend

Notice of the Declaration of any dividend whether interim or otherwise shall be given to the
registered holder of share in the manner herein provided
195.

Reserves

The Directors may, before recommending or declaring any dividend, set aside out of the
profits of the Company such sums as they think proper as a reserve or reserves which shall at the
discretion of the Directors be applicable for meeting contingencies or for any other purposes to which
the profits of the Company may be property applied and pending such application may, at the like
discretion, either be employed in the business of the Company or be invested in such investments
(other than shares of the Company) as the Directors may from time to time think fit.
196.

Dividends to be paid within forty two days

The Company shall pay the dividends or send the warrant in respect thereof to the
shareholder entitled to the payment of dividend, within forty-two days from the date of the declaration
unless;
1.

Where the dividend could not be paid by reason of the operation of any way;

2.
Where a shareholder has given discretion regarding the payment of the dividends and
those directions cannot be complied with;
3.

Where there is dispute regarding the right to receive the dividend.

4.
Where the dividend has been lawfully adjusted by the Company against any sum due
to it from share holder, or
5.
Where for any other reason, the failure to pay the dividend or to post the warrant
within the period aforesaid was not due to any default or on the part of the Company.
197.

Unclaimed dividend

No unclaimed dividend shall be forfeited by the Board and the Director shall comply with
provision of the Section 205 A of the Companies Act, 1956 as regard unclaimed dividends
198.

No Interest on dividends

Subject to the provisions of Section 205A of the Companies Act, 1956 no dividend shall bear
interest as against the Company
199.

Dividend and call together

Any general meeting declaring a dividend may on the recommendations of the Directors make
a call on the members of such amount as the meeting fixes but so that the call on each member shall
not exceed the dividend payable to him, and so that the call be made payable at the same time as the
dividend, and the dividend may, if so arranged between the company and the members, be set off
against the calls.

51

200.

Dividends in cash

No dividend shall be payable except in cash provided that nothing in this Articles shall be
deemed to prohibit the capitalisation of the profits or reserves of the Company for the purpose of
issuing fully paid up bonus shares or paying up any amount for the time unpaid on any shares held by
members of the Company.
CAPITALISATION
201.

Capitalisation
1.

The Company in General Meeting may, upon the recommendation of the Board,

resolve;
a.
that is desirable to capitalise any part of the amount for the time being standing to the
credit of any of the Company reserve accounts or to the credit of the profit and loss account otherwise
available for the distribution; and
b.

that such sum be accordingly set free for distribution in the manner specified in clause

c.
Amongst the members who would have been entitled thereto, if distributed by way of
dividend in the same proportions
2.
The sum aforesaid shall not be paid in cash but shall be applied, subject to the
provisions contained in the Clause (3) either in or towards;
i.
paying up any amounts for the time being unpaid on any shares held by such
members respectively;
ii.
paying up in full unissued shares of the company to be allocated and distributed,
credit as fully paid up, to and amongst such members in the proportions aforesaid; or
iii.

partly in the way specified in sub-clause (i) and partly in that specified in sub-clause

3.

A share premium account and a capital redemption reserve account may, for the
purpose of this articles, only be applied in the paying up of unissued share to be
issued to members of the Company as fully paid bonus shares

(ii)

Fractional Certificate
4.
The Board shall give effect to the resolution passed by the Company in pursuance of
this Article 202.
1.

Whenever such a resolution as aforesaid shall have been passed, the Board shall;

a.
make all appropriations and applications of the undivided profits resolved to be
capitalised thereby and all allotments and issues of fully paid shares, if any; and
b.

generally do all acts and things required to give effect thereto

2.

The Board shall have full power

a.
to make such provisions, by the issue of fractional certificates or by payment in cash
or otherwise as it thinks fit in the case of shares becoming distributable in fraction; and also

52

b.
to authorise any person to enter, on behalf of all the members entitled thereto, into an
agreement with the Company providing for the allotment of them respectively credited as fully paid up
of any further shares to which they may be entitled upon such Capitalisation, are (as the case may
require) for the payment by the Company on their behalf, by the application thereto their respective
proportions of the profits resolved to be capitalised of the amounts remaining on their existing shares.
3.
members

Any agreement made under such authority shall be effective and binding on all such

4.
That for the purpose of giving effect to any resolution, under the preceding paragraph
of this articles, the Directors may give such discretion as may be necessary and settle any question or
difficulties that may arise in regard to any issue including distribution of new equity shares and
fractional certificates as they think fit.
ACCOUNT
203.

Books to be kept

1.
The Company shall keep at its registered office books of account as would give a true
and fair view of the state of affairs of the Company or its transaction with respect to; (a) all sums of
money received and expended by the Company and the matters in respect of which the receipt and
expenditure take place
b.

all sales and purchase of goods by the Company

c.

the assets and liabilities of the Company; and

d.
if so required by the Central Government, such particular relating to utilisation of
materials or labour or to other items of cost as may be prescribed by that Government
Provided that all or any of the books of account aforesaid may be kept at such other place in
India as the Board of Directors may decide and when the Board of Directors so decides the Company
shall within seven days of the decision file with the Registrar a notice in writing giving the full address
of that other place.
2.
Where the Company has a branch office, whether in or outside India, the Company
shall be deemed to have complied with the provisions of sub-clause (1) if proper books of account
relating to the transaction affected the Branch are kept at that office and proper summarised returns
made upto date at interval of not more than three months are sent by the branch office to the
Company at its registered office or the other place referred to in sub-clause (1)
3.
The book of accounts and other books and paper shall be open to inspection by any
Director during business hours.
204.

Inspection by members

1.
The directors shall from time to time determine whether and to what extent and at
what times and place and under what conditions the book of accounts of the Company or any of them
shall be open to the inspection of members not being Directors.
2.
No members (not being a Directors) shall have any right of inspecting any books of
account or documents of the Company except as followed by law or authorised by the Board.
205.

Statements of accounts to be furnished to general meeting

The Board of Directors shall from time to time in accordance with Section 210, 211, 212, 216
and 217 of the Act cause to be prepared and laid before each annual general meeting a profit and loss

53

account for the financial year of the Company and a Balance Sheet made to as at the end of the
financial year which shall be a date not preceding the day of the meeting by more than six months or
such extended period as shall have been granted by the registrar under the provisions of the Act.
206.

Right of members to copies of Balance Sheet and Auditors Report

Any members of holder of debenture of the Company whether he is or is not entitled to have
copies of the Company's Balance Sheet sent to him shall, on demanded be entitled to be furnished
without charge, an any person from whom the company has accepted a sum of money by way of
deposit, shall on demand accompanied by the payment of a fee of one rupee, be entitled to be
furnished, with a copy of the Balance Sheet of the Company and of every document required by law to
be annexed or attached thereto including the profit and loss account and the auditor's report.
AUDIT
207.

Accounts to be audited

Once at least in every year the account of the Company shall be examined, balance and
audited and the correctness of the profit and loss account and balance sheet ascertained by one or
more Auditor or Auditors.
208.
Auditors shall be appointed and their qualifications, rights and duties regulated in accordance
with Section 619 read section 224 and other applicable provisions of the Act.
209.
Account when audited and approved to be conclusive except as errors discovered within 3
months
Every account when audited and approved by a general meeting shall be conclusive except
as regards any error discovered therein within three months next after the approval thereof.
Whenever any such error is discovered within that period the account shall be corrected and
thenceforth shall be conclusive.
DOCUMENTS AND NOTICES
210.

To whom documents must be served or, given

Documents or notice of every meeting shall be served or given or to (a) every members, (b)
every person entitled to a share in consequence of the death or insolvency of a member and (c) the
auditor or auditors for the time being of the Company PROVIDED that when the notice of the meeting
is given by advertising the same in newspaper circulating in the neighbourhood of the office of the
Company under Article 93 a statement of material facts referred to in article 94 need not be annexed
to the notice, as is required by that Article, but it shall merely be mentioned in the advertisement that
the statement has been forwarded to the members of the Company.
211.

Members bound by documents or notices served on or given to previous holder

Every person who, by operation of law, transfer or other means whatsoever, shall become
entitled to any share be bound by every document or notice in respect of such share, which prior to his
name and address being entered on the Register of Members, shall have been duly served on or
given to the person from whom the derived his title to such share.
212.

Service of document on company

A document may be served on the Company or an officer thereof by sending it to the

Company or officer at the Registered office of the Company by post under a certificate of posting or by
Registered post or by leaving it at its registered office

54

213.

Authentication of documents & Proceedings

Save as otherwise expressly provided in the Act, a document or proceeding requiring

authentication by the company may be signed by a Director, the Managing Director or the Secretary or
other authorised officer of the Company and need not be under the common seal of the Company
REGISTER AND DOCUMENTS
214.

Register and documents to be maintained by the Company

The Company shall keep and maintain Register Books and documents required by the Act or
these Articles, including the following :
1.
Register of investment made by the Company but not held in its own name, as
required by Section 49 (7) of Act.
2.
Register of mortgages and charges as required by Section 143 of the Act and copies
of instruments creating any charge requiring registration according to section 136 of the Act.
3.
Register and index of members and Debenture holders as required by Section 150,
151 and 152 of the Act.
4.

Foreign Register, if so thought fit, as required by Section 157 of the Act.

5.
Register of contract, with Companies and firms in which Directors are interested as
required by Section 301 of the Act.
6.

Register of Directors, and Secretary etc as required by Section 303 of the Act.

7.
Register as to holding by Director of shares and/or debenture in the Company as
required by Section 307 of the Act.
8.
Register of investment made by the Company in shares and debentures of the bodies
corporate in the same group as required by Section 372 of the Act.
9.
Copies of annual return prepared under section 159 of the Act together with the
copies of certificates and documents required to be annexed thereto under Section 161 of the Act.
10.
Register of loans, guarantees or securities given to other companies under the same
management as required by section 370 of the Act.
215.

Inspection of Register

The register mentioned in clause 6 and 9 of the foregoing article and the minutes of all
proceedings of general meeting shall be open to inspection and the extracts may be taken therefrom
and copies thereto may be required by any member of the company in the same manner to the same
extent and on payment of the same fees as in case of the Register of members of the Company
provided for in clause 3 thereof. Copies of entries in the register mentioned in the foregoing article
shall be furnished to the persons entitled to the same on such days during such business hours as
may consistently with the provisions of the act in that behalf be determined by the Company.
WINDING UP
216.

Distribution of Assets

If the Company shall be wound up and the assets available for distribution among the
members as such shall be insufficient to repay the whole of the paid up capital, such assets shall be

55

distributed to that, as nearly as may be, the losses shall be borne by the members in the proportion to
the capital paid up or which ought to have been paid up at the commencement of the winding up, on
the shares held by them respectively, and if in a winding up the assets available for distribution among
the members shall be more than sufficient to repay the whole of the Capital paid up at the
commencement of the winding up, paid up or which ought to have been paid up on the shares held by
them respectively but this Article is to be without prejudice to the rights of the holder of shares issued
upon special terms and conditions.
217.

Distribution in specie or kind

1.
If the Company shall be wound up, whether voluntarily or otherwise the liquidator
may, with the sanction of a special resolution, divide amongst the contributories in specie or kind any
part of the assets of the Company and may with the like sanction, vest any part of the assets of the
Company in trustees upon such trust for the benefit of the contributories or any of them, as the
liquidator, with the like sanction shall think fit.
2.
If thought expedient any such division may subject to the provision of the Act be
otherwise than in accordance with the legal rights of the contributions (except where rights of the
unalterably fixed by the Memorandum of Association) and in particular any class may be given
preferential or special rights or may be excluded altogether or in part but in case may division
otherwise than in accordance with the legal rights of the contributories shall be determined upon any
contributory who would be prejudicial thereby shall have a right to dissent and acciliary rights as if
such determination were a special resolution passed pursuant to section 494 of the Act.
3.
In case any shares to be divide involve a liability to calls or otherwise any person
entitled under such division to any of the said shares may within ten days after the passing of the
special resolution by notice in writing direct the Liquidator to sell his proportion and if pay him net
proceeds and the Liquidator shall if practicable act accordingly.
218.

Rights of share holders in case of sales

A special resolution sanctioning a sale to any other Company duly passed pursuant to section
494 of the Act may subject to the provisions of the Act in like manner as aforesaid determine that any
shares or other consideration receivable by the liquidator be distribution against the member otherwise
than accordance with their existing rights and any such determination shall be binding upto all the
members subject to the rights of the descent and consequential rights conferred by the said sanction.
INDEMNITY
219.

Directors and other rights to indemnity

Subject to the provisions of section 201 of the Act, every Director or officer, or employee of the
Company or any person (whether an officer of the Company or not) employed by the Company out of
the assets of the Company as auditors shall be indemnified by the company out of the assets of the
company against all liabilities incurred by him as such Director, Officer or auditor and it shall be the
duly of the Directors out of the funds of the Company to pay all cost, charges, losses and damages
which any such person may incur or become liable to, by reason of any contract entered into or any
act deed matter or thing (except such if any as he shall incur or sustain through or by his own wrongful
act neglect or default including expenses and in particulars and so as not limit the generality of the
foregoing provisions against all liabilities incurred by him as such directors, officer or auditor or other
officer of the company in defending any proceedings whether civil or criminal in which judgment is
given in his factor, or in which he is acquitted or in connection with any application under section 633
of the Act in which relief is granted to him by the court.

56

220.

Director officer not responsible for acts of other

Subject to the provisions of Section 201 of the Act no Director, Auditors or other officer of the
Company shall be liable for the acts, receipts, neglects or defaults or any other Director or officer or for
joining in any receipts or other act for conformity or for any loss or expenses happening to the
Company through the insufficiency or deficiency of the title to any property acquired by order of the
Directors for or on behalf of the Company or for the insufficiency or deficiency of any security in or
upon which any of the moneys of the Company shall be invested or for any loss or damages arising
from the insolvency or tortuous act of any person, firm or company to or which whom any moneys
securities of effects shall be entrusted or deposited or any loss occasioned by any error of judgement,
omission, default or oversight on his part of for any other loss damages or misfortune whatever shall
happen in relation to execution of the duties of his office or in relation thereto unless the same shall
happen through his own dishonesty.

SECRECY CLAUSE
221.

Secrecy Clause

Every Director, Manager, Auditor, Treasurer, Trustee, Member of a Committee, Officer,

Servant, Agent, Accountant or other person employed in the business of the Company shall if so
required by the Director, before entering upon his duties, sign a declaration pledging himself to
observe a strict secrecy respecting all transaction and affairs of the Company with the customers and
the state of the accounts with individual and in matter thereto and shall by such declaration pledge
himself not to reveal any of the matters which may come to his knowledge in the discharge of his
duties except when required to do so by the Directors or by law or by the person to whom such matter
relate and except so far as may be necessary in order to comply with any of provisions in these
presents contained.
222.

No member to enter the premises of the Company without permission

57

We the several person whose name description and address are subscribed herein below
are desirous of being formed into a company in pursuance of this Memorandum of
Association and we respectfully agree to take the number of shares in the capital of the
Company set opposite our respective name:Sl.
No.

Name, Fathers name address

occupation and description of the
subscriber

No.
of
Shares
taken
by
the
subscriber
10

Signature

1.

Amitabh Agarwal
S/o Shri S.G. Agarwal
Near Agarwal Bhavan Purani
Basti Raipur (M.P)
(Business)

2.

Narayan Prasad Tekriwal

S/o Late Nathmal Tekriwal
Indrawati Colony
Raipur
(Business)

10

Sd/Narayan
Prasad
Tekriwal

3.

Krishna Kumar Agarwal

S/o Late Shri Mangiram Agarwal
A-1 Skylark Appartment
Anna Nagar East, 3rd Road,
Madras
(Business)

10

Sd/Krishna
Kumar
Agarwal

4.

Sushil Kumar Pansari

S/o Late Sripal Pansari
A-1 Skylark Appartment
Anna Nagar East, 3rd Road,
Madras
(Business)

10

Sd/Sushil Kumar
Pansari

5.

Ansuya Devi Agarwal

W/o K.K. Agarwal
A-1 Skylark Appartment
Anna Nagar East, 3rd Road,
Madras
(Business)

10

Sd/Ansuya Devi
Agarwal

6.

Sanjay Choudhari
S/o Late Shri S.S. Choudhary
C-122 Devendra Nagar, Raipur
(Business)

10

Sd/Sanjay
Choudhari

7.

Vivek Agarwal
S/o Shri Hari Mohan Agarwal
A-1 Skylark Appartment
Anna Nagar East, 3rd Road,
Madras

10

Sd/Vivek Agarwal

70
========

58

Name of witness
address
occupation and
description

Sd/Amitabh
Agarwal

Witness for
subscribers Sl.
No. (1 to 7)
Sd/Sunil Johri
S/o Late Shri
R.S. Johri
Nathani Building
Shastri Chowk
Raipur
Chartered
Accountants