Law relating to Prevention of Oppression and Management of Companies

Author: D P Mittal

Year: 2023

The book deals with measures as an alternative to winding up of a company to prevent mismanagement and oppressive conduct of majority shareholders which is burdensome, harsh and wrongful, lacking probity, unfair to the member, and causing prejudice to him in the exercise of his legal and proprietary rights as shareholder and the Tribunal regulating, overseeing and supervising the working of the company and making such orders as it thinks fit, relieving the minority shareholders from acts of oppression and mismanagement or preventing its affairs being conducted in a manner prejudicial to public interest. It consists of 13 chapters

• Chapter 1 is an introduction explaining the concept of corporate governance, the genesis and the scheme of the Chapter XVI of the Companies Act, 2013 “ Prevention of Oppression and Mismanagement” and also explaining that doctrines and concepts routinely applicable to dealing with other civil cases are not normally applicable;

• Chapter 2 deals with making application to the Tribunal seeking relief from oppression and mismanagement;

• Chapter 3 and Chapter 4 explain concepts respectively of “Oppression” and “ Mismanagement” with illustrations drawn from decisions of Indian and foreign courts;

• Chapter 5 deals with the Tribunal investigating a person guilty of fraud, misfeasance, persistent negligence or default in carrying on the business and debarring him for five years, if found guilty, to hold the post of a director or a post of responsibility;

• Chapters 6 to 10 deal with Tribunal powers to make orders as it considers think fit as also orders on particular matters providing for regulation of company in future, sale of shares, removal and appointment of directors, orders on just and equitable grounds, power to issue injunction, etc;

• Chapter 11 deals with qualification of members making application to Tribunal for prevention of oppression and mismanagement;

• Chapter 12 deals with concept of class action or derivative claim which allows for the initiation of a class action suit by a member or a depositor on behalf of the members or depositors against directors for conducting affairs of the company in a fraudulent, unlawful or wrongful manner;

• Chapter 13 deals with penalty for fraud by delinquent directors, liability for fraudulent conduct of business, assessment of damages against them, etc.