Minutes of a General Meeting: Section 118

Minutes of a general meeting are governed by section 118 of the Companies Act, 2013, which does more than tell a company to keep a record. It fixes a deadline, names the only three grounds on which the chairman may leave something out, gives the minutes an evidentiary effect that runs until the contrary is proved, and makes tampering with them an offence carrying imprisonment. Section 119 then decides who may read them, and the answer is narrower than most readers expect. This is not investment advice.

What must minutes of a general meeting contain?

Section 118(1) sets the scope wider than the heading suggests. Every company must cause minutes to be prepared for:

• every general meeting of any class of shareholders or creditors
• every resolution passed by postal ballot
• every meeting of its Board of Directors
• every meeting of every committee of the Board

They must be prepared and signed in such manner as may be prescribed, and kept within thirty days of the conclusion of the meeting or of the passing of the resolution by postal ballot, in books kept for that purpose with their pages consecutively numbered. The consecutive numbering is a tamper control, and it pairs with sub-section (12) below.

Sub-section (2) sets the standard of the content: a fair and correct summary of the proceedings. Not a transcript. Sub-section (3) adds that all appointments made at any such meeting shall be included.

Sub-section (4) adds two items only for a meeting of the Board or of a committee of the Board:

• the names of the directors present at the meeting
• in the case of each resolution passed, the names of the directors, if any, dissenting from, or not concurring with the resolution

That second item is the most informative line in a set of board minutes, and it does not apply to general meeting minutes.

The three grounds for leaving something out

Section 118(5) is exhaustive. There shall not be included in the minutes any matter which, in the opinion of the Chairman of the meeting:

1. is or could reasonably be regarded as defamatory of any person; or
2. is irrelevant or immaterial to the proceedings; or
3. is detrimental to the interests of the company

Section 118(6) then gives the Chairman absolute discretion in regard to the inclusion or non-inclusion of any matter on those grounds. The discretion is absolute, and it is bounded: it is absolute in regard to the grounds specified in sub-section (5), not at large.

What the minutes prove

Two sub-sections do the evidentiary work, and they are not the same rule.

Section 118(7) is the simple one. Minutes kept in accordance with the section shall be evidence of the proceedings recorded in them.

Section 118(8) is the presumption. Where minutes have been kept in accordance with sub-section (1), then until the contrary is proved:

• the meeting is deemed to have been duly called and held
• all proceedings at it are deemed to have duly taken place
• resolutions passed by postal ballot are deemed to have been duly passed
• and in particular, all appointments of directors, key managerial personnel, auditors or company secretary in practice are deemed to be valid

This is a rebuttable presumption, not a conclusive one, and it is conditional on the minutes actually having been kept in the manner sub-section (1) requires.

Two more obligations that get overlooked

Section 118(9) bars a company from circulating or advertising, at the expense of the company, any document purporting to be a report of the proceedings of a general meeting unless it includes the matters required by the section to be contained in the minutes. A selective summary paid for by the company is inside this sub-section.

Section 118(10) requires every company to observe the secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India, constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government. The approval limb matters: the standard binds through the Act only once the Central Government has approved it.

The penalties, and why one of them is different

The first two are penalties on the company and its officers. The third is different in kind. Sub-section (12) reaches a person, not an officer in default, it carries imprisonment, and the fine has a floor as well as a ceiling. It is the only limb of the section where the record itself, rather than the keeping of it, is the subject.

Who can actually read them

Section 119 is where most of the practical questions land, and it is worth reading closely because of what it leaves out.

Section 119(1) applies to the books containing the minutes of the proceedings of any general meeting of a company, or of a resolution passed by postal ballot. Those books shall:

• be kept at the registered office of the company; and
• be open, during business hours, to inspection by any member without charge, subject to such reasonable restrictions as the company may impose by its articles or in general meeting, so however that not less than two hours in each business day are allowed for inspection

Section 119(2) gives a member the right to be furnished with a copy of any such minutes within seven working days after making a request, on payment of the prescribed fees.

Section 119(3) makes a refusal of inspection, or a failure to furnish a copy in time, a penalty of twenty-five thousand rupees on the company and five thousand rupees on every officer in default, for each such refusal or default. Section 119(4) lets the Tribunal, without prejudice to that penalty, by order direct an immediate inspection or direct that the copy be sent forthwith.

Notice what section 119 does not cover. It runs to minute books of general meetings and postal ballot resolutions. Board and committee minutes are inside section 118 but outside the section 119 member inspection right. A shareholder who wants to know which directors dissented has no route to it through section 119.

What an outside reader can use instead

Because Board minutes are not open to members, the practical trail for a listed company runs through the exchange filings rather than the minute book.

• What is a voting results filing covers the disclosure that carries the actual vote counts from a general meeting.
• How to track shareholder voting results is the practical route to finding them.
• How to read board meeting intimation covers what a company must say before a board meeting.
• Section 179 board powers covers the decisions that can only be taken at a board meeting, and so can only be recorded in board minutes.
• What is a postal ballot covers the resolutions that section 118 brings inside the minute keeping duty without a meeting having been held.

Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.