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Comparison of provisions of
oppression & mismanagement under
both Acts .
COMPARATIVE ANALYSIS
SECTION 241 OF THE 2013 ACT : CORRESPONDING TO
SECTIONS 397, 398, 401,402, 403, & 404 OF 1956 ACT
Under the 1956 Act, the CLB was empowered to grant relief
against oppression and mismanagement . The 2013 Act has
transferred these functions to NCLT & NCLAT.
The 1956 Act did not cover past aspects of oppression but acts
oppression that have happened in the past and the same are
continuing till the date of filing petition. The 2013 Act in Section
1( Part A) expanded the scope of agitating past concluded actions.
COMPARATIVE ANALYSIS
Under the 2013 Act, members can seek relief against conduct
of affairs in a manner prejudicial to public interest or oppressive
to him or any member or members or prejudicial to the interests
of the company even though it may not amount to oppression.
This was combined in S. 397 & 398 under 1956 Act.
The caveat shall remain valid for a period of ninety days from
the date of its filing.
NCLT Rules, 2016 (PART III)
INSTITUTION OF PROCEEDINGS, PETITION, APPEALS
ETC.
RULE 26: ENDORSEMENT AND VERIFICATION
Preparing a case, knowing the law and the precedents are not
sufficient to present the case before the Tribunal. This requires a
lot of human skills apart from technical and procedural skills.
• Face the bench and bow from the waist whenever you enter or
•Formulate issues/points.
•Submit a list of citations to the Tribunal & hand over the Xerox
counsel.
Practical & Procedural Aspects Of
Drafting Petition /Pleading
KNOWING THE LEGAL MAXIMS
Ubi jus ibi remedium: No right without remedy
Stare decisis : To stand by decisions (precedents)
Ratio decidendi: Reason for deciding
Audi alteram partem: Hear the other side
Nemo debet esse judex in propria causa: No one can be a judge in
his own cause.
Volenti non fit injuria: An injury is not done to one that consents to
it.
Verbatim : Word by word, exactly.
KNOWING THE LEGAL NOMENCLATURE
PETITIONER/APPELLANT
REPLY
PETITION / RESPONDENT
APPLICATION/
APPEAL
REJOINDER PETITIONER/APPELLANT
SUR-REJOINDER
(WITH PERMISSION RESPONDENT
OF COURT)
PREPARATORY POINTS
• Take minute facts from the client.
1. Dressing Etiquettes
2. Handshake Etiquettes
3. Communication Etiquettes
CONDUCT AND ETIQUETTE
DUTY TO THE TRIBUNAL - Conduct yourself with dignity
and self-respect.
• Drafting is a burden.
In the present case , the major point of dispute raised by Appellant i.e.
Shanti Prasad Jain is that the affairs of the Company were being
conducted in a manner oppressive to him and his group of members.
Contd...
NOTEWORTHY RULINGS
Court held, undoubtedly, there has to be a oppressive conduct
of the majority shareholders over minority .However , acts of
oppression must be continuous acts on the part of the majority
shareholders, continuing up to the date of petition.
Contd...
NOTEWORTHY RULINGS
Sangramsinh P. Gaekwad & Ors. Vs Shantadevi P. Gaekwad
In the present case, Apex Court set aside the judgement of the
Board that allowed the appellant to buy the shares, hence giving
him a chance to benefit from his own wrong and getting the
control of the company. Therefore, a proper remedy was given
to the respondents and the allotment of shares to the appellant
was set aside , on the principle i.e. ‘wrongdoer should not be
enabled by law to take any advantage from his actions.
NOTEWORTHY RULINGS
Dale and Carrington Invt. (P) Ltd. v. P.K. Prathapan and
Ors.
It was observed that the appellant had neither placed on record
anything to justify issue of further share capital nor proper
procedure was followed in allotting the additional share capital.
Therefore, neither the allotment of additional shares in favour of
Ramanujam was bonafide nor it was in the interest of the
company nor a proper and legal procedure was followed to make
the allotment. The motive for the allotment was malafide, the
only motive being to gain control of the company. Therefore, the
court set aside allotment of shares to the appellant.
NOTEWORTHY RULINGS
M S D C Radharamanan Vs. M S D Chandrasekara Raja
The CLB opined that there exists a deadlock in the affairs of the
company. It directed the appellant to purchase 2,84,000 shares held by
the first respondent at a value to be determined by a chartered valuer.
NOTEWORTHY RULINGS
M S D C Radharamanan Vs. M S D Chandrasekara Raja
The Observation laid down in Gaekwad & Ors vs
Shantadevi P. Gaekwad were reiterated. It was therefore
held that the Company Law Board is at liberty to pass such
further orders under Section 402 of the Act, for the smooth
running of the company.
It is true that there was some factual controversies and the
allotment of shares is different from receipt of share application
money but the conduct of the parties and their understanding
of the situation largely determines the basic issue and upheld
decision of CLB of valid allotment.
NOTEWORTHY RULINGS
Cyrus Investments Pvt. Ltd. v. Tata Sons Ltd.