Resolution Requiring Special Notice: Rule 23

A resolution requiring special notice is one that members cannot simply move at a meeting. Where the Companies Act, 2013 or a company's articles require special notice, section 115 makes qualifying members give the company advance notice of their intention to move the resolution, and makes the company pass that on to all its members. The section states the threshold but delegates both the prescribed amount and the manner, and rule 23 of the Companies (Management and Administration) Rules, 2014 is where the working timetable lives.

What is a resolution requiring special notice, and who may give it?

A resolution requiring special notice is one the Act or the articles will not let members move without warning the company first. Section 115 provides that where special notice is required of any resolution, notice of the intention to move it shall be given to the company by such number of members holding not less than one per cent of total voting power, or holding shares on which such aggregate sum not exceeding five lakh rupees, as may be prescribed, has been paid up.

Read that second limb carefully, because the statute is not stating a threshold there. Five lakh rupees is a ceiling on what the rules may prescribe, not the qualifying figure itself. The words are "not exceeding five lakh rupees, as may be prescribed". Until a figure is prescribed, the section supplies none, and the figure it supplies even then is whatever the rules say, capped at five lakh.

Rule 23(1) prescribes it, and it prescribes the maximum the section allows:

A special notice required to be given to the company shall be signed, either individually or collectively by such number of members holding not less than one percent of total voting power or holding shares on which an aggregate sum of not less than five lakh rupees has been paid up on the date of the notice.

So the operative test is the ceiling. Three things the rule adds to the section are worth noting:

1. The notice must be signed, either individually or collectively, which the section does not say.
2. The paid-up test is measured on the date of the notice, which fixes a date for a question the section leaves open.
3. The rule states the paid-up limb as not less than five lakh rupees, where the section states the prescribable amount as not exceeding five lakh. The two phrases point in opposite directions because they are doing different jobs: the section limits what may be demanded of members, and the rule sets the floor a member must clear.

The timetable in rule 23

Section 115 says only that the company "shall give its members notice of the resolution in such manner as may be prescribed". Rule 23 supplies both ends of the timetable.

The members' window, rule 23(2). The notice shall be sent by members to the company not earlier than three months but at least fourteen days before the date of the meeting at which the resolution is to be moved, exclusive of the day on which the notice is given and the day of the meeting. So there are two boundaries, not one: a notice served four months ahead is too early, and one served ten days ahead is too late.

The company's obligation, rule 23(3). The company shall, immediately after receipt of the notice, give its members notice of the resolution at least seven days before the meeting, exclusive of the day of dispatch of the notice and the day of the meeting, in the same manner as it gives notice of any general meetings.

Put the two side by side with concrete numbers, because the second has to fit inside the first. For a meeting on the 30th of a month, the members' notice is in time if it is given on the 15th, since the 15th and the 30th are both excluded and fourteen clear days remain. The company must then dispatch its own notice leaving at least seven clear days, so no later than the 22nd. A company served at the very last permissible moment therefore has roughly a week of margin, and rule 23(3)'s word for the timing it actually wants is "immediately".

The fallback, rule 23 second sub-rule (3) and (4). Where it is not practicable to give the notice in the same manner as notice of a general meeting, the notice shall be published in the English language in an English newspaper and in the vernacular language in a vernacular newspaper, both having wide circulation in the State where the registered office of the company is situated, and shall also be posted on the website, if any, of the company. That publication must be at least seven days before the meeting, exclusive of the day of publication and the day of the meeting.

On the numbering of rule 23. In the copy of the rules read for this page, rule 23 carries two sub-rules numbered (3): the first is the company's duty to notify members in the same manner as a general meeting notice, and the second is the newspaper and website fallback, followed by a sub-rule (4) on the seven day publication period. The duplication is in the text as served, not a transcription error here, and it is the reason this page describes the fallback by what it says rather than only by its number.

On the rules cited here. The rule text on this page comes from the copy of the Companies (Management and Administration) Rules, 2014 that thc.nic.in serves, and that copy is a notification text rather than a consolidation. Its body is the 27 March 2014 notification, unnumbered as served. Bundled into the same file is a later amendment notification, G.S.R. 279(E) dated 6 April 2022, the Companies (Management and Administration) Amendment Rules, 2022, whose own footer records the principal notification as G.S.R. 260(E) dated 31 March 2014 and lists the ten amendments before it. That number and date are second-hand: the file carries them only in that 2022 footer, never on the principal text itself, so the source lines on these pages cite them on the authority of that footer. So the file evidences eleven amendments in all, and the most recent one it carries is the 2022 notification, not the 5 March 2021 one its table ends on. Check the amending notifications before relying on any rule text here for a filing. The section text on this page is the Companies Act, 2013 as consolidated on India Code, with each amendment footnote resolved on its own page.

Which resolutions require special notice?

Section 115 is a machine with no subject matter of its own. It applies wherever "any provision contained in this Act or in the articles of a company" requires special notice. Two provisions of the Act are the ones an outside reader meets most often:

• Section 140(4), where special notice is required for a resolution at an annual general meeting appointing as auditor a person other than the retiring auditor, or providing expressly that a retiring auditor shall not be re-appointed. Auditor removal section 140 covers that route, including the exception where the retiring auditor has completed the tenure section 139(2) sets.
• Section 169(2), where special notice is required of any resolution to remove a director, or to appoint somebody in place of a director so removed, at the meeting at which he is removed. Removal of a director, section 169 covers that one.

And the articles can add to the list, which is why the section names them alongside the Act.

One thing special notice is not: a class of resolution. A resolution requiring special notice is still, when it reaches the meeting, either an ordinary or a special resolution, and section 114 decides which majority it needs. Ordinary resolution vs special resolution covers that distinction.

Why an investor reads rule 23

Special notice is the gate on the two contested items the Act reserves to it, replacing an auditor and removing a director, and it is members rather than the board who open that gate. The rule 23 timetable is therefore the answer to a set of practical questions about any such item: when the members' notice had to have been given, whether the company circulated it in time, and whether it fell back on newspaper publication. It is not the only members' route to a general meeting agenda, and section 100's requisition procedure is the other one an outside reader meets. For a listed company the resolution itself reaches the exchange with the meeting notice, and the outcome reaches it again as a voting results filing.

Where this sits in the disclosure picture

• Removal of a director, section 169 is the resolution section 169(2) subjects to special notice.
• Auditor removal section 140 is the other Act provision that requires it.
• Ordinary resolution vs special resolution covers why special notice is not itself a class of resolution.
• What is an explanatory statement, section 102 covers what else must accompany the notice of a special-business item.
• What is a voting results filing is where the outcome becomes public.
• What is section 117, filing of resolutions covers the resolutions that then have to reach the Registrar.

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.