COMPANY HAVE SEPARATE LEGAL EXISTENCE
First Respondent doctor was managing director of
second Respondent Company. Second Respondent
Company owned a car which was insured with
appellant insurance company. First Respondent
sustained multiple injuries while he was travelling
in that car. He filed a Petition claiming a sum
as compensation before Motor Accidents Claims
Tribunal. Appellant-insurance company resisted
claim on ground that first respondent was owner
of car and was not covered under insurance
policy. Tribunal held that first Respondent was
not owner of car and, hence, he was entitled to
compensation. First Respondent was a person
different from that of second Respondent and,
therefore, he could not be construed as owner of
car purchased by second Respondent. Therefore,
appellant-insurance Company was liable to
pay compensation for injuries suffered by first
Respondent, while he travelled as an occupant of
car. – NATIONAL INSURANCE CO. LTD. vs. DR.
BALAKRISHNAN [2011] 108 SCL 31 (MAD.)
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CIRCUMSTANCES IN WHICH A COMPANY MAY
BE WOUND UP
Petitioner-company had supplied certain goods to
Respondent-company. Petitioner filed a Petition
for winding up of Respondent on ground that
in spite of repeated demands and request to
clear outstanding dues, Respondent had failed to
discharge debt it owed to Petitioner. In counteraffidavit it had been stated that goods supplied
by Petitioner were of inferior quality and that
Petitioner was demanding price of goods supplied
at higher rates. No material had been placed on
record in support of defence as set out in counteraffidavit to show that any bona fide dispute had
been raised by Respondent. Since Respondent not
been able to clear its admitted liability despite
repeated opportunities, winding up Petition against
Respondent was to be admitted. – RAHUL INTERDYES (P.) LTD. vs. ANAND TISSUES LTD. [2010]
99 SCL 80 (ALL.)
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FAILURE TO ACT IN TERMS OF CONTRACT –
DOES IT AMOUNT TO BE EITHER OPPRESSION
OR MISMANAGEMENT – SECTION 397/398 READ
WITH SECTIONS 402 AND 403
A commercial contract stands outside the ambit
of section 397/398. Failure to act in terms of
the contract cannot be said to have amounted
to either oppression or mismanagement. Until
conduct of the majority of shareholders is found
to be oppressive under section 397/398, the
Company Law Board is not competent to invoke
its jurisdiction under section 402 to set right or
put an end to such oppression. – INCABLE NET
(ANDHRA) LTD. vs. A. P. AKSH BROADBAND
LTD. [2010] 97 CLA 158 (SC)
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ARTICLES OF ASSOCIATION PROVIDING
FOR PRE-EMPTIVE RIGHT IN SHAREHOLDER
TO PURCHASE SHARES – DUTY OF COURT
TO DETERMINE IF TRANSFER OF SHARES
TO OUTSIDER IS ILLEGAL – SUIT ARISING
OUT OF RIGHT OF PRE-EMPTION – WHO ARE
NECESSARY PARTIES – SECTION 108
Unless the Articles of Association impose
restriction on the transfer of shares, there can
be no restriction on the transfer of shares.
Consequently, where the Articles of Association
do not give any absolute or inflexible pre-emptive
right to purchase shares to the shareholder of
a company, it becomes the duty of the court to
determine if transfer of the share to an outsider
is illegal. In other words, the exception to the
restriction in transferring must be liberally
construed. In a suit arising out of right of preemption given by the Articles of Association,
both the shareholders whose share is sought
to be purchased by the plaintiff as well as
the company would be necessary parties. –
RADHABARI TEA CO. (P.) LTD. vs. MRIDUL
KUMAR BHATTACHARJEE [2010] 97 CLA 214
(GUJ.)
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TENABILITY OF NAME BEING STRUCK OFF
FROM REGISTER OF MEMBERS WHERE
MANDATORY REQUIREMENTS UNDER SECTION
560 HAVE NOT BEEN COMPLIED WITH
Where a company failed to file Annual Return
and the Registrar of Companies (ROC) struck off
the name without publishing notice in Official
Gazette and sending it by registered post which
is mandatory requirement under sub-section (3)
of section 560, the ROC would not be justified
in striking off the name by publishing of notice
issued under sub-section (5) of section 560 and
name of the company is liable to be restored. –
SITARAM SINGH CONSTRUCTION (P.) LTD. vs.
UNION OF INDIA [2010] 98 CLA (SNR) 9 (PATNA)
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