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NCLT MUMBAI - REMOVAL OF DIRECTOR BY MAJORITY AFTER DUE-COMPLIANCE WITH REQUISITE PROCEDURE NOT OPPRESSIVE

NCLT dismisses cross petitions, dismisses the first petition wherein the Petitioners alleged siphoning of funds, misappropriation of immovable property, use of company premises for personal gains of the Respondent and removal of Petitioner without due notice as baseless. Note that removal of the director for carrying out competing business with that of the Company was done after due compliance of law and procedure holds that it did not suffer from procedural lacuna and thus was not oppressive. With regards to the counter petition, rejects prayer seeking restraint of Respondent from carrying out competing business as the Respondent (the ousted director) in the said petition would no more be connected with the Company. Stress on the need of proving allegation of oppression with the aid of corroborative evidence as mere allegations does not suffice the purpose. Observes that if a decision is taken by majority shareholders keeping in mind stakeholders'/ Company's  business interest and welfare, then the director if in majority, has the statutory power to regulate the Company's affairs and for that reason can also pass resolution for removal of another director.

NCLT DELHI - COMPOUNDING OF OFFENCES

Where defaults by Managing Director were incurable and not done due to any bona fide omission and offences committed if compounded, would demolish and prejudice prosecution, Managing Director would not be entitled to compounding of offences.

NCLT MUMBAI

Where petitioner kept bank account of company to himself and not allowed his own mother (wife of progenitor of family business) to take money for her treatment, mother (R2) being 98 per cent shareholder and brother R3 who looked after her would continue to manage respondent-company and petition under sections 397 and 398 was to be dismissed.

NCLT CHENNAI

Company alleged that the Chartered Accountant did not act with due diligence while certifying forms filed with ROC and did with malafide intention by colluding with director for personal gain.  Based on the arguments been submitted by both the parties, the Bench direct the Institute of Chartered Accountants of India to investigate into the allegations levelled against the applicants, if found correct, appropriate action to be taken against them.

NCLT BANGALORE - ALLOWS COMPOUNDING OF OFFENCE FOR DELAY IN APPOINTMENT OF WOMEN

Where there was delay in appointing woman director and prosecution against company and its officers was instituted by ROC before Special Court for said violation on Company's Application for compounding of offence same was to be permitted by levying compounding fees even though prosecution launched against company and its directors was pending before Special Court for said violation.

NCLT ALLAHABAD

Mere increase in share capital of Company without any attempt to dilute shares of other members would not be oppression for purposes of section 397. Where name of company was illegally changed same would not amount to oppression or mismanagement unless it prejudicially affected interests of members. of company.

Interest free loan raised by a director of company from his brother-in-law was to be regarded as loan-in-trust and not deposit.

Where acts of directors of company taken cumulatively amounted to oppression and mismanagement instead of ordering liquidation of company and removal of directors, appropriate orders in interest of company could be passed.

NCLT AHMEDABAD - MANDATES CONVENING OF SHAREHOLDERS MEETING FOR APPROVING AMALGAMATION DESPITE RECEIPT OF CONSENT LETTERS.

Ahmedabad Bench of the NCLT dismisses plea of Aditya Birla Financial Services Ltd. ("ABFSL"), Applicant, for dispensing with the meeting of equity and preference shareholders for approving the proposed scheme of arrangement.

The proposed arrangement was between ABFSL, Aditya Birla Nuvo Ltd. ("ABNL") and Grasim Industries Ltd. ("Grasim") for amalgamation of ABNL with Grasim and upon amalgamation becoming effective, demerger of the financial services business of Grasim and its transfer to ABFSL, ABNL along with its wholly owned subsidiary, ABNL Investments Ltd. held 100% share capital in ABFSL, hence, consent letter were provided by these two shareholders approving the scheme in case of the Applicant. Notes that the scheme was approved by Board of Directors of all the three companies and the Competition Commission of India, dismissing applicant's plea holds that in view of the complexities involved in the proposed scheme  it is just an expedient to have a meeting of the equity shareholders and preferential shareholders in spite of consent letters given by all the equity shareholders and preference shareholders. Thus, directs applicant to convene meeting of equity and preference shareholders.

The author can also be reached at vagheladeep@gmail.com.


 

Published by

Deep Vaghela
(Company Secretary )
Category Corporate Law   Report

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