Whether it is mandatory to give prior intimation for participating in the e-board meeting under rule 3 (3)(e) Companies (Meetings of Board and its Powers) Rules, ?

Whether it is mandatory to give prior intimation for participating in the e-board meeting under rule 3 (3)(e) Companies (Meetings of Board and its Powers) Rules, ? 

An interesting case was decided by NCLT recently on participation of directors in the video-conferencing board meeting. 

  

Rule 3 (3)(e) Companies (Meetings of Board and its Powers) Rules states that the director, who desire, to participate may intimate his intention of participation through the electronic mode at the beginning of the calendar year and such declaration shall be valid for one calendar year.

In Rupak Gupta v. U.P. Hotels Ltd, it was held by  NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH( NCLT) that for conducting e-board meeting under rule 3 (3)(e) is directory, not mandatory.

Directors can attend board meeting via video-conferencing without intimating at beginning of calendar year as prior intimation required for conducting.

 e-board meeting under rule 3 (3)(e) is directory, not mandatory

• Rule 3(3)(e) of the Companies (Meeting of the Board and its Power) Rules, 2014 provides that if intimation is given at the beginning of the calendar year such declaration shall be valid for one calendar year. 

It is not said anywhere that if intimation is not given at the beginning of the year, video-conferencing is not to be provided in that calendar year. 

Therefore, it does not mean that the directors are not entitled to video- conferencing if intimation is not given at the beginning of the calendar year.