Company is an artificial person that cannot act by itself and it needs the device of natural persons to act, manage business and take decisions thereon. Directors of the company have been conferred with power to act on behalf of the company and entrusted with responsibility to discharge that duty with due care. Company law in its various provisions stipulates guidelines for carrying out of the duties conferred upon directors so that the actions taken by board of directors of a company do not conflict the law of land, charter documents of the company and further reconcile the interests of all the stakeholders including shareholders and creditors. Directors exercise the power vested in them by coming together, deliberating on matters relevant to the company and taking decisions thereon collectively. Sections 285 to 292 govern the meetings of the directors and as per these provisions directors have to exercise most of their powers through board meetings. There was a time when there was no way of holding meetings other than by way of physical presence of all the directors at one place. However with advent of technology it is possible to carry out meetings of directors via modern modes of communications such as tele-conferencing and video-conferencing. These modes are also in sync with the need of the present time when it is not always possible for all directors or for the quorum to be physically present at one place for various reasons.

Company law in its original form did not give any recognition to technological advancements and conduct of meetings of directors via advance methods of communication. Over the years the approach is shifting towards becoming pro technological advancements, which is evident from the fact that ministry of corporate affairs has explicitly allowed conduct of meeting of board of directors via mode of tele/video conferencing. However before the issuance of the circulars in year 2011 by ministry of corporate affairs paving way for virtual meetings provisions contained in companies act and judicial interpretation given to the terms such as meeting and notice was wide enough to encompass holding of virtual meetings of board of directors.

Though the term meeting has not been defined in the company law, the ordinary meaning of the word requires coming together of people to discuss or decide something however that coming together in the present scenario may also be by means of virtual modes of communication. UK Court of Appeal in as early as 1989 interpreted the word meeting and held that a meeting can be held if an assembly of members is seated at three different levels connected by audio-visual links. Company law does not anywhere provide the place where meeting of board of directors should be held in contrast to the provisions on annual general meetings of members which are required under section 166(2) to be held at the registered office of the company. Thus a board meeting may be held anywhere, the only requirement is that there must be a meeting. Barring few occasions company law does not mandate physical presence of the directors. Section 301 requires directors to be physically present, however this requirement is limited to the cases where company has entered into a contract in which one or more directors are interested. Requirement of affixation of common seal in physical presence of two directors and the company secretary may also be overcome by incorporating a different scheme for affixing common seal in articles of association. Stipulation of section 292 requiring certain decisions to be made only at meeting may also be interpreted to mean that these decisions cannot be decided by resorting to resolution by circulation.

Provisions contained in Sections 4 and 5 of the Information Technology Act confer legal recognition on electronic records and digital signatures. Both the above sections contain the non-obstante clause and override the provisions of all existing laws and in present context the stipulation of section 286 for notice to be in writing and to be signed by person sending it is overridden by provisions of sections 4 and 5 of the Information Technology Act. Thus a notice for convening a board meeting may be digitally signed by the person sending it and may be sent by e-mail or fax.

It may be seen from the above that though there is no explicit enabling provision in Companies Act for holding of meetings of board via tele/video conferencing, the Act does not prohibit virtual meetings. Ministry of Corporate affairs has clarified and settled the position a great deal on holding of meetings of board via tele/video conference by issuing circular 28/2011 and 35/2011 the debate shall be put to absolute rest upon enactment of Companies Bill 2012 which incorporate explicit provisions on meetings ssvia tele/video conferences.