Prevention of Oppression and Mismanagement

Prevention of Oppression and Mismanagement

CoAo (Final) Past Examinations Questions (SCANNER)

10 MRJ Company Limited, a closely held company comprised of two groups of shareholders - one foreign and the other Indian. The foreign group held 55% and the Indian 45% of the shares of the company. The Articles of AssociatioI1 of the company provided all the matters of the mutual understanding of both the groups. The Articles also contained the provisions enabling the two groups to enjoy equal amount of managerial power. The relationship between the two groups could not last for a long time and differences arose between them. The two groups could not co-operate leading to a deadlock. The Indian group, therefore, complained to the Company Law Board for action against the foreign group for oppression.
Referring the provisions of the Companies Act, 1956, decide:
(i) Whether the contention of the Indian group that the foreigngroup is acting
in a manner oppressive to the Indian group will sustain?
(ii) What relief can the Company Law Board grant to the petitioners in the case.
[May, 19961
2. What is meant by' oppression'? State whether the aggrieved party would succeed
in obtaining relief from the Company Law Board on the ground of oppression
in the following cases:
(i) The majority of the Board of Directors override the minority Directors and
the minority Directors apply to the Company Law Board complaining
oppression by majority Directors.
(ii) A petition by majority shareholders complaining oppression by minority
shareholders. [November, 1995]
3. "The Courts do not, in general, intervene at the instance of shareholders in
matters of internal administration of the companies." Discuss. [November, 1993]
4. Can majority of shareholders apply to the Court for relief against oppression by
the minority shareholders? If so, when? [November, 1993]
50 Law intends relieving minority shareholders from oppression and mismanage
ment without resorting to winding up of the company. Discuss. [May, 19931
6. "Majority will have its way but the minority must be allowed to have its say."
Explain this statement in detail with remedies available to the minority members.
[November, 1993]