Prevention of oppression & mismanagement

The requirement of filing a petition/application u/s 397/398  of Companies Act, 1956are as under:-

1.     The petitioners must satisfy the requirement of section 399 of the Companies Act, 1956 i.e. for a company Ltd. by shares the petitioners must constituted either 100 members or one-tenth of the total number of the members of the company whichever is less or the petitioners must hold one-tenth of the issued share capital of the company and in the case of a company not having a share capital the petitioners must constitute one-fifth of the total number of its members.

2.     in case where the number of the persons required to satisfy 1. above and to be made petitioners is large, any one or more of them having obtained the consent in writing of the rest may make the petition/application on behalf and for the benefit of all of them. 

3.     in case the members complaining do not satisfy 1 above they may apply to the Central Government who may, if in its opinion circumstance exist which make it just and equitable to do so, authorize the members of the company to apply to the Company Law Board u/s 397/398 notwithstanding that the requirement of 1. above are not fulfilled.

4.     the petition/application has to be drawn on substantial paper of full scape as required under regulation 11 and 16 of the Company Law Board Regulation 1991.

5.     the petition has to be drawn in form No.1. as prescribed under Company Law Board Regulation 1991.

6.     Requisite fee towards a petition i.e.  Rs. 5,000/- , and Rs. 50/- towards application by way of demand draft drawn in favour of “Pay & Account Officer, Department of Company Affairs, New Delhi/ Chennai” has to be remitted.

7.     Petition/ Application has to be accompanied by affidavits verifying the petition/\application from all the petitioners drawn on non-judicial stamp paper of requisite value duly attested by  Notary public/ Oath Commissioner in accordance with regulation 14(8) & (9) of the Company Law Board Regulation 1991.

8.     The petition/application has to be served on the concerned Registrar of Companies and Regional Director, Department of Company Affairs and on all the respondents.

9.     The petition/application alongwith annexures duly page numbered with proper index are required to be properly bound in a paper book.