Liquidator has power to call for Extraordinary General Meeting (EGM) of a Subsidiary Company of the Corporate Debtor in terms of the proviso to Section 98(1) and 100 of Companies Act, 2013 read with Section 36(3)(d) of IBC – Mr. Velayudham Jayavel, Liquidator of IDEB Projects Pvt. Ltd. Vs. IDEB Buildcon Pvt. Ltd. and Ors. – NCLT Bengaluru Bench
Hon’ble NCLT Bengaluru Bench held that the shares of the Corporate Debtor in the Subsidiary Company is a part of the Liquidation estate under Section 36(3)(d) of the IBC and hence power is vested to the Liquidator to take such measures to protect and carry on the business for the benefit of the Corporate Debtor. As such since the Corporate Debtor is a shareholder of the Subsidiary Company, and under Section 100 of the Companies Act, 2013 entitled to call for EGM, the same can be called by the Liquidator who is only acting on behalf of the Corporate Debtor. Under Section 98 of the Companies Act, NCLT has limited power to adjudicate the calling of the EGM and cannot decide on the agenda of calling such EGM.