Find A Law Firm

PREVENTION OF OPPRESSION AND MISMANAGEMENT



          PREVENTION OF OPPRESSION AND MISMANAGEMENT

Meaning of oppression and mismanagement

These words not defined in co. law but meaning for the purpose of co. law should be used in broad sense and not in strict literal sense and can be derived from following case laws:

1.       

·         Oppression involves atleast an element of lack of fair dealing to the member of his propriety right as shareholder.

·         Persons concerned with management of the co. affairs must, in connection therewith, be guilty of fraud, misfeasance or misconduct towards the members.

2.            Oppression must be of a continuous process. Hence isolated acts of oppression or mismanagement will not give rise to an action u/s 397

3.            An attempt to force new and more risky object upon an unwilling minority, May, in circumstances, amount to oppression.

4.            A person can complain of oppression only in his capacity as a member and not in capacity as a director or a creditor.

5.            The legal representatives of a deceased member, whose name is still on the register of members, are entitled to file a petition under section 397 for relief against oppression or mismanagement.

Person claiming relief on the ground oppression has to prove on the part of majority:

a.       Lack of probity (honesty) OR

b.      Unfair conduct OR

c.       Prejudice to him in the exercise of legal and propriety rights as a shareholder.


Conditions to be satisfied before filing petition u/s 397of the companies act

1.            conditions for claiming relief from oppression

The remedy is available u/s 397 only if following conditions are satisfied

a.      Oppression or prejudice to the public int.

It must be established that the affairs of the company are being conducted:

                                                             I.      In manner oppressive to any member OR

                                                          II.      In a manner prejudicial to public int.

Meaning of oppression as per last question


b.      Oppression in the capacity of a member

Relief claim only person in his capacity of member

c.       Continuity of oppression

d.      Justification of winding up

The application must make out prima facie case that degree of oppression is so severe that there is just and equitable ground for winding up of company.


2.      Eligibility to make an application

An application u/s 397 can be made only by the members of the company. Further such members must meet the eligibility requirements as prescribed u/s 399.


3.      order by the company law board (CLB)

Where an application is made to CLB complaining oppression, if it is satisfied that the affairs of the co are being conducted in a manner which is oppressive to any member or prejudicial to public int. , it may make necessary orders ending the matters complained.

Conditions which must be satisfied before filing a petition u/s 398 for the prevention of management. (Twice)

 

1.      conditions for claiming relief from mismanagement

Section 398 will be invoked in either of the following two conditions:

a)      the affairs of co being conducted in a manner which is

·         prejudicial to public int. OR

·         prejudicial to the int. of company


b)      that due to “material change” that has taken place in the management or the control, it is likely that the affairs of the co will be conducted in the manner:

·         prejudicial to public int. OR

·         prejudicial to the int. of company


Meaning of material change:

It will deem to have taken place in following cases:

·               alteration in BOD OR

·               change in manager OR

·               alteration in ownership of the co shares

·               Alteration in the membership of co in case of no share capital.


                  c) Continuity of mismanagement is required.

              

2.      Eligibility to make an application

An application u/s 398 can be made only by the members of the company and must meet the eligibility requirement under section 399


3.      Orders by the CLB

Where an application is made to CLB complaining mismanagement, if the CLB is satisfied that the conditions prescribed in section 398 are satisfied. It may make the necessary orders for ending the matters, complained of.

 

Who can apply to the CLB for relief in case of oppression and mismanagement?

As per section 399

This provision has been enacted to discourage frivolous (useless) application.

1.      eligibility to make an application:

a.      members

·         in case of co having share capital

Members eligible to apply shall be the lowest of the following

Ø  100 members OR

Ø  1/10 of total members OR

Ø  Members holding not less than 1/10 of total issued share capital.

·               Co having no share capital

Application shall be made by atleast 1/5 of total number members.

The CG may (even if the above requirements is not complied) allow any member to apply, if in its opinion, circumstances exist which make it just and equitable to do so.

 

2.      conditions to be fulfilled for valid application

a.       The applicant must have paid all the calls and others sums due on their shares.

b.      Condition of holding requisite number of shares to be fulfilled at the time of application.

c.       Joint holder of shares to be counted as one member only.

d.      Shares concerned here can be ES/PS


     3. Imp issues:

·         Members ceasing to be members-consequences

The requirement as to minimum shareholding is to be satisfied only at the time of filing application. If some of the members who consented to the application ceased to be member by selling their shares, the application is still maintainable.

·         The consent must be given prior to making of application otherwise ineffective.

·         Withdrawal of consent-consequences.

The consent to be given by shareholder is reckoned at the beginning of the proceedings. The withdrawal of consent by a shareholder during the course of proceedings does not affect the maintainability of the application.

Comments
AntonSondids January 15, 2017
Alesse cheap cialis Cialis 5mg Taglich Fluoxetine Pronil In Internet No Prescription Amex Accepted Viagra Farmacias Online Bentyl 20mg Usa Visa Accepted prostate propecia 1 mg Worldwide isotretinoin by money order in usa price Bluepharma Kamagra Cialis Y Enalapril Beta Zithromax Chlamidia online pharmacy Amoxicillin 500mg Ingredients Buy Synthroid Online No Prescription Ciproflaxin Viagra Bringt Nichts Acheter Priligy Thaр“р‡lande cialis Levitra Posologie Forum Comprar Cialis Por Internet Foro cialis 30 anos Where To Buy Lasix Water Pill Levitra Zerkauen Cialis Indicaciones Contraindicaciones
Byronhit May 29, 2017
corpuscula articularia aponeurorrhaphy Cuvier ducts anthrax Barnes dystrophy Cooper frontoethmoidal suture paxil coupon foraminal herniation butamben hypamnion acetylase anular band ligamentum interfoveolare deme
MichaelWhemn July 8, 2017
wh0cd50624 toradol price nexium 40 mg medrol 16mg
BillyExcit August 24, 2017
wh0cd161580 diclofenac sodium 75 AUGMENTIN 875 MG
Mikefrala September 11, 2017
Continue
Mikefrala September 13, 2017
payday loans online payday loans for bad credit
Aaronbuh September 13, 2017
plavix 75 cialis generic cheap order amoxicillin online
MichaelWhemn September 14, 2017
triamterene buy advair
Mikefrala September 15, 2017
free xxx webcams online payday loans direct lenders
Jamesget September 16, 2017
payday loans online no credit check
Jamesget September 16, 2017
payday loans online
Jamesget September 17, 2017
online payday loans
JohnBruch September 19, 2017
https://paydayloans.us.org/ - personal loans
JohnBruch September 19, 2017
https://paydayloans.us.org/ - payday loans
JohnBruch September 20, 2017
https://paydayloans.us.org/ - payday loans online
JohnBruch September 21, 2017
https://paydayloans.us.org/ - payday loans online
JohnBruch September 22, 2017
https://paydayloans.us.org/ - loans for bad credit
JohnBruch September 22, 2017
https://freesexchat.us.com/ - sex chat https://onlineloans.us.com/ - as an example
JohnBruch September 23, 2017
https://onlineloans.us.com/ - payday loan online
JohnBruch September 24, 2017
https://essaywritingservices.us.com/ - essaywritingservices.us.com https://freesexchat.us.com/ - dildo show
JohnBruch September 24, 2017
https://freesexchat.us.com/ - free sex chats
JohnBruch September 25, 2017
https://essaywritingservices.us.com/ - essay writing service review https://essayonline.us.com/ - online essay writing service
JohnBruch September 26, 2017
https://essayonline.us.com/ - buy essay papers online https://essaywritingservices.us.com/ - admission essay writing service
JamesBruch September 30, 2017
more my homework help write essay https://writemyessay.us.com - my homework now
Online Payday Loans October 10, 2017
paydayloan 10 top loan companies bad credit payday loans direct lenders helpful hints
Fake Essay Writer October 15, 2017
help with my essay pay to write essays write my essay essay online
Buy Essay Online October 16, 2017
write my essay custom essay online essay write my papers
JamesBruch October 16, 2017
payday loans bad credit payday loans for bad credit here i found it http://LoansForBadCredit.us.com/
Payday Loan Online October 16, 2017
loan cash direct lenders for bad credit payday loans for bad credit paydayloan
Payday October 17, 2017
https://loansforbadcredit.us.com/ bad credit payday loans direct lenders More hints payday bad credit loan
Speedy Cash October 17, 2017
paydayloans.us.org payday loans online payday loans online no credit check payday loans online direct lenders only
JamesBruch October 25, 2017
webcam porn live webcam sex webcam sex https://webcamsex.us.com - porn cams
JoeBruch November 4, 2017
payday loans direct lender bad credit personal loans unsecured money loans short term loan lenders
Pay Day Loans November 4, 2017
bad credit payday loans personal loans bad credit long term loans for bad credit no guarantor bad credit loan no guarantor
Write Essays November 7, 2017
buy essay buy essays buy essay buy essay
Web Assign Utah November 8, 2017
buy an essay buy essay online cheap essay buy help with college essays
JamesBruch November 9, 2017
payday loan direct lenders direct loan lenders online loans no credit check instant approval direct payday lenders essay help online essay online essay application essay online loan payday loan direct lenders payday loan direct lenders direct payday lenders online free live sex chat sex chat room free web cam sluts live free sex chat lesbian show lesbian show camsluts lesbian show payday lenders direct direct payday lenders online lenders payday advance direct online lenders direct lenders of loans direct loan lenders cash advance payday loan research paper write essay for me online homework solutions do my homework for me
Online Payday Loan November 9, 2017
personal loans bad credit personal loans with bad credit personal loans unsecured best place to get a personal loan with bad credit
Payday Loan Online November 10, 2017
loans short term no credit check unsecured personal loans bad credit best loans for bad credit short term loans no credit check
Loan Cash November 10, 2017
quicken loans personal loans quick quick loans online quick personal loans
Best Online Loans November 13, 2017
short term loans with bad credit short term fast cash loans best personal loan rates credit loans
JeffOrarty November 13, 2017
Pharmacy Express Canada buy cialis Nizagara Order Online
Buy An Essays November 16, 2017
buy essay online writing the college essay college essays help college essay writers
Paper Writer Free November 17, 2017
need help writing an essay college essay services help me write a essay writing the college essay
Online Lenders November 18, 2017
fast loans fast loans online quick loan bad credit same day quick personal loans for poor credit
Online Loan November 19, 2017
payday loans quick cash payday loans quickly quick personal loans quick cash no credit check
Bad Credit November 19, 2017
short term loan no credit check short term loans short term loan no credit check short term loans online
PamBruch November 20, 2017
research writing research paper research writing research writing lesbian sex show hot webcam girls webcam pussy live webcam porn payday loans no credit check loan cash getting a loan getting a loan direct lender loans payday loans for bad credit loans with no credit check direct lenders of loans english assignment help help with finance homework need help writing a research paper buy an essay advance cash payday loan payday advance loan payday advance loan advance cash payday loan slut cams webcam slut girl cams webcam amateur
JoeBruch November 24, 2017
personal loans quick quick personal loans online quick personal loans in new york personal loans quick approval
PamBruch November 26, 2017
girls chat erotic chat girls chat girls chat getting a loan payday loans online direct lenders direct lenders payday loans payday loans direct lenders research paper writing an essay for college admission mla research paper uk dissertation writers the best online payday loans easy payday loan direct payday loans advance payday loans online payday advance check into cash getting a loan payday advance college essay college essays college paper college paper same day payday loans online direct payday lenders direct payday lenders direct payday lenders essay writing custom essay writing writing my essay writing my essay online lenders payday loans for bad credit loans online bad credit loans online bad credit
JamesBruch November 26, 2017
online payday loans payday loans online for more https://onlineloans.us.com/ - spotloan
Payday Loan Online December 2, 2017
quick payday loans direct lenders loans quickly fast easy cash loans quicken loans
Money Loan December 4, 2017
cash advance cash advance cash advance payday advance online
amica car insurance February 9, 2018
cheap auto insurance in california cheap auto insurance quotes cheap auto insurance online cheap full coverage auto insurance
Help My Essay February 10, 2018
research essay research essay purchase argumentative essay writing essays for college
insurance companies February 10, 2018
cheapest car insurance cheapest car insurance car insurance quotes online comparison cheapest car insurance
nj auto insurance February 11, 2018
cheap car insurance in florida car insurance companies 2018 esurance triple a auto insurance
Getting A Loan February 11, 2018
loans with low interest emergency loans emergency loans emergency loans
(Please Enter the code above shown on image)