1. No resolution shall be deemed to have been duly passed by the Board or by a committee thereof by circulation, unless the resolution has been circulated in draft, together with the necessary papers, if any, to all the directors, or members of the committee, as the case may be, at their addresses registered with the company in India by hand delivery or by post or by courier, or through such electronic means as may be prescribed and has been approved by a majority of the directors or members, who are entitled to vote on the resolution:
Provided that: where not less than one-third of the total number of directors of the company for the time being require that any resolution under circulation must be decided at a meeting, the chairperson shall put the resolution to be decided at a meeting of the Board.
2. A resolution under sub-section (1 ) shall be noted at a subsequent meeting of the Board or the committee thereof, as the case may be, and made part of the minutes of such meeting.
Legal Commentary & Landmark Judgments: Section 175
Section 175 of the Companies Act, 2013 establishes the statutory procedure and safeguards for the Board of Directors or its committees to adopt resolutions by circulation without convening a formal physical or audio-visual meeting, conditioning legal validity upon universal dispatch and requisite majority approval.
In proceedings challenging circular resolutions before the NCLT under Section 241, call for the transmission logs, electronic read receipts, and courier tracking receipts to establish whether the draft resolution and all supporting materials were concurrently delivered to all directors. If one-third of the board demanded a physical meeting before the voting closure date, plead that the circular resolution was extinguished by operation of law and seek an immediate interim stay of its implementation.