section 398

CLB’s power to set-aside Agreements/Contracts under section 397/398?

Income Tax - There can be disputes between majority group and minority shareholders in any Company and these disputes come very frequently in closely held companies or Private Limited Companies. The Companies Act, 1956 provides certain rights to the shareholders ...

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CLB's power and responsibility under section 402 of Companies Act, 1956?

Income Tax - In any litigation, the Court or the authority adjudicating the matter can pass interim orders and the matter will get finally disposed of. Once the matter is dispose of finally, there ends the litigation and the final order can be executed. If there is a provision for review having limited scope, the court can review its order. This is th...

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How to look at the issue of ‘membership’ under section 399 of Companies Act, 1956?

Income Tax - Section 397/398 of the Companies Act, 1956 provides a relief to the minority against the majority if the majority indulges in the oppressive acts and the acts of mismanagement. It is not that every shareholder can avail the remedy available under section 397/398 of Companies Act, 1956 and section 399 specifically deals with the issue as q...

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How to ascertain 'oppression' under section 397 of Companies Act, 1956?

Income Tax - The study of various judgments of High Court and Supreme Court under section 397/398 of Companies Act, 1956 speak volumes about the complications in dealing with the cases of ‘oppression and mismanagement’ under section 397/398 of Companies Act, 1956. There were many judgments under section 397/398 explaining the powers of Company Law...

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Minority Shareholders In A Company – the protection?

Income Tax - I have been continuously focusing at the complications in the corporate world and especially about the protection to the shareholders in a Company. I have seen cases where the majority does everything in order to deny the rightful share of the minority shareholders or the group; or to make the company a shell company. ...

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HC may sanction non tax neutral demerger

The contention urged by the Applicant that the Scheme of Demerger must necessarily comply with Section 2(19AA) which is meant for availing tax concession cannot be read as a mandatory requirement for all schemes of amalgamation / arrangement/de-merger under Sections 391/392/394 of 1956 Act . The sai...

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In case of disagreement by minority, remedy lies u/s 397 & 398 and not in Civil Court

Radhabari Tea Co. Pvt. Ltd. Vs. Mridul Kumar Bhattacharjee (Guwahati High Court) - Decision of a company has to rest on views of majority; in case of disagreement by the minority, remedy lies u/s 397 & 398 and not in Civil Court. When a case falls within four corners of section 397 and/or section 398, ordinary civil court's jurisdiction would stand barred to deal with such a dispu...

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CLB judgment on non issue of further shares to existing shareholders

Satish Chandra Sanwalka & others Vs M/s Tinplate Dealers Association Pvt Ltd & others (Company Law Board- Principal Bench, New Delhi) - The petitioners claiming to hold 4132 partly paid ordinary shares of Rs.100/-each and 3065 fully paid preference shares of Rs.100/-each in M/S Tinplate Dealers Association Private Limited ( the company) have filed this petition under Sections 397/398 and Section 111(4) of the Companies Act, 1956 (th...

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Recent Posts in "section 398"

HC may sanction non tax neutral demerger

The contention urged by the Applicant that the Scheme of Demerger must necessarily comply with Section 2(19AA) which is meant for availing tax concession cannot be read as a mandatory requirement for all schemes of amalgamation / arrangement/de-merger under Sections 391/392/394 of 1956 Act . The said provision cannot be read and interpret...

Read More

CLB’s power to set-aside Agreements/Contracts under section 397/398?

There can be disputes between majority group and minority shareholders in any Company and these disputes come very frequently in closely held companies or Private Limited Companies. The Companies Act, 1956 provides certain rights to the shareholders ...

Read More
Posted Under: Company Law |

CLB's power and responsibility under section 402 of Companies Act, 1956?

In any litigation, the Court or the authority adjudicating the matter can pass interim orders and the matter will get finally disposed of. Once the matter is dispose of finally, there ends the litigation and the final order can be executed. If there is a provision for review having limited scope, the court can review its order. This is th...

Read More
Posted Under: Company Law |

How to look at the issue of ‘membership’ under section 399 of Companies Act, 1956?

Section 397/398 of the Companies Act, 1956 provides a relief to the minority against the majority if the majority indulges in the oppressive acts and the acts of mismanagement. It is not that every shareholder can avail the remedy available under section 397/398 of Companies Act, 1956 and section 399 specifically deals with the issue as q...

Read More
Posted Under: Company Law |

How to ascertain 'oppression' under section 397 of Companies Act, 1956?

The study of various judgments of High Court and Supreme Court under section 397/398 of Companies Act, 1956 speak volumes about the complications in dealing with the cases of ‘oppression and mismanagement’ under section 397/398 of Companies Act, 1956. There were many judgments under section 397/398 explaining the powers of Company Law...

Read More
Posted Under: Company Law |

Minority Shareholders In A Company – the protection?

I have been continuously focusing at the complications in the corporate world and especially about the protection to the shareholders in a Company. I have seen cases where the majority does everything in order to deny the rightful share of the minority shareholders or the group; or to make the company a shell company. ...

Read More
Posted Under: Company Law |

In case of disagreement by minority, remedy lies u/s 397 & 398 and not in Civil Court

Radhabari Tea Co. Pvt. Ltd. Vs. Mridul Kumar Bhattacharjee (Guwahati High Court)

Decision of a company has to rest on views of majority; in case of disagreement by the minority, remedy lies u/s 397 & 398 and not in Civil Court. When a case falls within four corners of section 397 and/or section 398, ordinary civil court's jurisdiction would stand barred to deal with such a dispute...

Read More

Is It Possible to Lay A Hard and Fast Rule on Powers of CLB U/s. 397/398 of Companies Act, 1956?

It is known to the corporate professionals that there are so many complications in getting the disputes resolved among shareholders in the Company. The disputes among the shareholders or the groups tend to come in closely held companies as the largely held Public Limited Companies should follow SEBI (DIP) regulations while allotting share...

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Posted Under: Company Law |

397/398 – Difficulties with Issue of Amendment of Company Petition– Companies Act, 1956?

The procedure prescribed in Company Law Board regulations is not too technical like the provisions of Civil Procedure Code, and the procedure is based on the logic and reason. I did personally feel that even the Company Law Board normally do not rely on technicalities and I personally feel that substance is to be looked into over technic...

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Posted Under: Company Law |

Role of Books of Account While Dealing With Mismanagement U/s. 397 of Companies Act, 1956?

The provisions of Companies Act, 1956 makes it very clear that every company should maintain proper books of accounts and should record all the transactions of the Company pertaining to sales, purchases, expenses, receipts, liabilities and Assets. Not only recording the transactions, every Company is also supposed to maintain the documen...

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Posted Under: Company Law |
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