Rescinding or Cancellation of the Board or General Meeting Resolution
The Resolution passed at any Meeting of Board of Directors of a Company or at the meeting of Shareholders/Members of the Company, may be rescinded i.e. cancelled at any Subsequent meeting (but cannot be rescinded at the Same Meeting). This amendment or rescinding can be by way of passing a fresh Resolution only at any Subsequent Meeting.
In some situation, Resolution(s) passed as such initially cannot be reversed, if such reversal would lead to a fraudulent activity by the Company or in case if the reversal is done with a primarily avoid itself from a possible non-compliance of any law.
The Rescinding Resolution cannot be given a retrospective effect. It will come into effect on the date of passing of resolution. And therefore during the period from the passing of original resolution to the date on which rescinding done, the resolution will still deemed to be valid and any action taken by the Company on the original, will make it responsible for that.
There is no specific Section under Companies Act, 1956 for such right to rescind earlier passed resolution, however the same can be taken as an right of the Board of Directors/Members.
Resolution to be passed at the Subsequent meeting for Rescinding:
1. Rescinding Resolution in Board Meeting:
The Chairman informed the Board that in the previous Board Meeting held on (Date) a Resolution no. __ was passed for approval of ______. Now it is proposed that the same be rescinded considering the fact that the resolution was passed considering some necessity, which the Management of the Company now thinks it fit that the same can be adjusted with. The Board discussed the same and
Upon motion duly passed, it was:
“RESOLVED THAT the resolution no. __ passed at the Meeting of Board of Directors held on (Date) be and is hereby rescinded.”
2. Rescinding Resolution in EGM/AGM:
“RESOLVED THAT the resolution no. __ passed at the Extraordinary General Meeting / Annual General Meeting held on (Date) be and is hereby rescinded.”
It is proposed that the resolution no. __ passed at the Extraordinary General Meeting held on (Date) be rescinded in view of the fact that the expenditure involved in implementation of the said resolution is not viable considering the current financial situation of the Company and the same can be adjusted.
For the ready reference of the members, the Resolution passed at the Extraordinary General Meeting held on (Date) reads as under:
“RESOLVED that _____________________.”