Worked Solution
✓ VerifiedAnswer: (B) Only III and IV are correct
Analysis of each statement:
Statement I — Incorrect. Under Section 101(1) of the Companies Act, 2013, a general meeting requires not less than 21 clear days' notice. The notice was posted on September 5, 2022, and the meeting was on September 27, 2022. When notice is sent by post, under Rule 18 of the Companies (Management and Administration) Rules, 2014, it is deemed received after 48 hours of posting — i.e., deemed received on September 7, 2022. Counting clear days (excluding both the date of deemed service and the date of the meeting): September 8 to September 26 = 19 clear days only, which falls short of the required 21 clear days. Therefore, Modern Limited did not observe the required notice length.
Statement II — Incorrect. Under Section 101(3)(a) of the Companies Act, 2013, notice is to be given to the assignee of an insolvent member, not to the insolvent member himself. The law does not require notice to be served on a member who has been adjudged insolvent — the assignee steps into that role. Statement II incorrectly asserts that notice must be given to the member regardless of insolvency status; this is contrary to the statutory provision.
Statement III — Correct. As established above, Section 101(3)(a) requires notice to be sent to the assignee of an insolvent member. Mr. Ashok is declared insolvent but undischarged. Modern Limited correctly served notice on his assignee. This is in full compliance with the Act.
Statement IV — Correct. Section 101(4) of the Companies Act, 2013 provides that an accidental omission to give notice, or non-receipt of notice, shall not invalidate the proceedings. This protection is expressly limited to accidental omissions. A wilful omission — as is the case with Ms. Anjum — is not protected under this provision and will therefore invalidate the proceedings of the meeting. Modern Limited's deliberate non-service on Ms. Anjum renders the proceedings of the 18th AGM invalid.
Conclusion: Only Statements III and IV are correct. The answer is (B).
Write it like this
1The skeleton
- Attack Statement I first with the date math — write out September 5 (posted) → September 7 (deemed received, +48 hrs by post rule) → count clear days September 8–26 = 19 days < 21 required; showing the arithmetic visually is what gets you the mark, not just saying 'notice was short'.
- Cite the two-layer rule for postal notice — one rule for the 21-day requirement (Section 101(1)) and a separate rule for the 48-hour deemed service (Rule 18, Companies Management & Administration Rules, 2014); examiners look for both citations together on Statement I.
- Flip Statement II by contrasting it with Statement III — your answer gains elegance if you say 'Section 101(3)(a) requires notice to the assignee, NOT the member himself' when disposing of II, then immediately confirm III as correct for the same reason; linking the two shows you read the Act, not just the textbook.
- Nail Statement IV by drawing the accidental vs wilful line explicitly — write: 'Section 101(4) protects only accidental omission; a wilful omission is outside that safe harbour and therefore invalidates proceedings'; if you just say 'wilful omission invalidates' without contrasting with the accidental exception, the examiner has no proof you know the provision.
- State your conclusion as a labelled line — end with 'Therefore, only Statements III and IV are correct. Answer: (B)'; a bare answer letter without a conclusion sentence leaves the examiner unsure whether you reasoned or guessed.
2Examiner-rewarded phrases
3Common trap
The killer trap here is counting clear days wrong — most students start counting from September 5 (the date of posting) and land on 22 days, concluding Statement I is correct, when the 48-hour postal deemed-service rule pushes day-zero to September 7, leaving only 19 clear days. Lock in the Rule 18 step before you even touch the calendar.