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Majority Shareholders Power And Minority Sharholder’s Right: An Analysis
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MAJORITY SHAREHOLDERS POWER AND MINORITY SHARHOLDER’S
RIGHT: AN ANALYSIS
AUTHORED
BY - ANURAG SINGH[1]
ABSTRACT
In the day-to-day operations of a
corporation, decisions impacting the administration of the business must be
made, and these decisions are often decided by the majority of members. The
interests of the majority stakeholders may sometimes conflict with those of the
minority stockholders throughout this decision-making process. If the decisions
taken in such a situation only serve the interests of one group and not the
organization's overall larger interests, the minority members whose rights may
have been violated may protest the action. How to protect minority stakeholders
within the framework of commercial activity is one of the most difficult topics
in modern company law. The objective would be to strike a balance between the
company's actual control and the minuscule individual shareholders' interests.
Palmer accurately said that, in terms of shareholder rights, "a proper
equilibrium of the privileges of majority and minority shareholders is
quintessential for the smooth functioning of the company." It is
reasonable to anticipate that any choices made in a company's affairs would be
made with the ideals of natural justice and fair play in mind. Minority
shareholders' interests must be safeguarded in the event that this is not done.
This study attempts to analyze the acts of majority shareholders which in turn
resulting to oppression and mismanagement towards minority. Additionally, this
study also examines the exception given in Landmark ruling of English court in
Foss vs. Horbottle,1934. This study concludes with resorting solutions for
minority shareholders against the oppressive acts of major stakeholders in the
corporate set up.
Keywords:
Majority, minority, oppression, mismanagement, company, balance, etc
[A] INTRODUCTION
"You do, in a democracy, have to
win by a majority." Similar to a large group of people, a company
similarly adheres to the decisions made by the majority of its members. The
dissident minority must comply with any such rulings unless and until he can
show that the majority's authority has been abused. The basic guideline guiding
how a company's operations are conducted is "the will of those in power
prevails or the majority is supreme." A company's majority owners often
have the authority to impose their choices on the minority shareholders. They
occasionally abuse their authority to violate minority rights. In the seminal
decision of Foss. v. Harbottle[2], the court established
the fundamental rule of not interfering with a company's internal management. By
a simple majority or a three-fourths vote, the members approve resolutions on a
variety of topics. A resolution becomes enforceable after it has received the
necessary majority of votes from the company's members. Because each member
implicitly consents to bowing down to the will of the majority of the
company members upon joining, the court will often not interfere to
safeguard the minority interest impacted by the resolution. Since the company
is a separate legal entity with its own personality, its shareholders
(members) alone do not have the right to sue the offender in the event that the
business is damaged. The objective must be to strike a balance between the
company's effective control and the small individual shareholders' best
interests[3].
In the opinion of Palmer[4]: "A
proper balance of the rights of majority
and minority shareholder's is essential for the smooth functioning of the company”[5]. Therefore,
there are many measures for safeguarding of the rights of investors in
corporations in the current corporations Acts. The purpose of these laws is to
compel persons in charge of a firm to execute their authority in accordance
with specific equitable treatment and fair play principles.[6]
[B] STATEMENT OF THE PROBLEM
1. A person is regarded as the majority
shareholder if they own over fifty percent of the company's shares. With a
majority ownership position in the company comes great power, especially if
those shares come with voting privileges.
2. A minority shareholder, on the other
hand, is a person who has no more than fifty percent of the company's equity. A
minority holder is not eligible for the advantages enjoyed by a majority
holder. Rarely do minorities have the opportunity to benefit from a company's
activities, such as via dividends or the potential to resale their shares at a
profit. Minority shareholders may not be given the right to vote and might not
be given any administrative authority over the business.
3. Let's construct a simple scenario to
act as a controlling shareholder. In another universe, Mr. Stark, who owns
approximately 55 percent of the Galaxy Company's stock, is present. Mr. Star
Lord owns 8% of the business, Miss Black Widow 9%, Mr. Roger 13%, and Miss Pott
possess the remaining shares, with Mr. Thor holding 7% of the total.
4. In this case, Mr. Stark has the bulk
of the stocks in comparison to the other stockholders, as can be shown. He may
have a big effect on the company. Since they own less than fifty percent of the
company's equity, the remaining people are regarded as minority shareholders.
Since Mr. Stark may have significant influence over The Galaxy Company,
especially if the shares he holds are voting shares, Mr. Stark is consequently
primarily in charge of managing it.
5. 5. As a consequence, the participants
as a whole have good influence over how the organization exercises its rights
and generally manages its business, and the minority stakeholders are obligated
to obey the majority's decision. However, there is a danger that individuals
with the majority vote will also have a predisposition to oppress the minority
shareholders by abusing their disproportionately large authority.
6. Are the present companies Act, 2013
is enough to safeguard the privileges of Minority Shareholders in Company?
[C]
RESEARCH HYPOTHESIS
The study's fundamental assumption is
that while if majority and minority shareholders interact in a similar way to
how they do in the corporate world, all democratic choices are made and an
organization is governed according to the majority rule, which is accepted as
true and justifiable. The decision-making process, which is governed by the
majority rule, typically disregards the views of minority investors. The
majority rule is crucial to a corporation's governance, and courts "now
usually are unlikely to intervene at the instance of the stakeholder in
issues concerning internal administration."
[D] SIGNIFICANCE OF THE STUDY
Every person who has a share of
equity has the right to vote on every issue that is presented before the
company, according to Section 47 of the Companies law of 2013. The
acknowledgment of the member's right to cast a vote is influenced by both the
right to assets and the shareholder's flexibility in exercising that right in
line with his or her interests and preferences. To be approved by the meeting,
a special resolution has to get support from 3/4 of these votes. Consequently,
whether the legislation or the articles ask for a special resolution for any
reason, a 3/4th majority is required and a mere majority is inadequate.
Any decision taken by the majority of
stakeholders at a duly convened and held annual general meeting with respect to
an issue which may lawfully be discussed by the business shall be binding upon
the minority and the company. A Shareholders Agreement can be used to control
and address any decisions made by anybody that would jeopardize the interests
of the firm. Similar to any contract, it is crucial to have all discussions
open before signing one in order to prevent issues later on. The Shareholder’s
Agreement is a two-sided contract that benefits the Company as well as both of
its partners.
When a business can achieve a healthy
balance between its main and minority owners, business operations function more
smoothly, which boosts revenue. Both of these shareholders are internal
stakeholders who support the operation of the entire business. Therefore, a
company's internal environment must be maintained for it to run effectively.
[E] RESEARCH OBJECTIVES
The study has the following stated
objectives:
1. To Identity the vitality and
relevance of majority shareholders power and study its co- relation to minority
shareholders right.
2. To highlight significance of
company’s democratic structure in the Indian scenario and look into the issues
and challenges in protection of minority shareholder’s rights.
3. To analyze best legal practices
existing to prohibit oppression and mismanagement in company caused by majority
shareholders.
4. To identify ways by which the
interest of minority shareholders can be protected in the corporate world.
[F] RESEARCH METHODOLOGY
The methodology suggested shall be
basically Doctrinal in nature. The objectives of the research shall be explored
using analytical methods. The study mainly relies on national laws,
international agreements, and policy documents. The pertinent laws and regulations
that are in effect throughout India and other countries must also be carefully
reviewed. Using a modified version of the doctrinal research methodology, the
conclusion will be reached by looking at and analyzing legal concepts and
principles. In order to recommend and determine if a model law suited for
safeguarding of outnumbered rights in India may be introduced in India, it
is also necessary to examine various legislations relevant to the safeguarding
of minority rights in other nations. Additionally, this study examines the
company's democratic structure, the Foss v. Harbottle case, the
exception to this rule, and the law that safeguards the interests of the
company's minority owners.
[G] LITERATURE REVIEW
STATUTORY PROVISIONS
The Company Act of 2013 makes an
effort to preserve a good balance between the interests of the minority and
majority stakeholders, and it does so occasionally by establishing a
number of clearly defined minority rights that serve to safeguard the minority
shareholders. However, the 2013 Act[7]
provides a number of rights to shareholders that safeguard minority
stockholders. Here are some of them-
Section 48 - variation of class rights[8]:
The rights attached to the issued shares may be altered with the consent of a
3/4th majority of the class's owners when the issued shares are divided into
various classes in line with MOA/AOA. In situations where the classes are
created and the rights are changed with the approval of the necessary majority,
the holder of at least 10% of the originally issued shares of that class who
has not consented to the variations can apply to the tribunal for an annulment
of the variation under section 48(2) of the act. A corporation faces a minimum
punishment of $25,000, a maximum fine of $5 lakh, a corporate officer serving a
minimum of 6 months in jail, or both, if it disobeys a court decision.
Section 213- Request for investigation[9]:
The tribunal may be asked by the following parties to investigate the company's
affairs: a) Businesses with stock capital i) a minimum of 100 members; ii) a
minimum of one-tenth of the voting power inside the company; and b) in the
absence of share capital: i) Applications may be submitted by at least
one-fifth of the members.
Section 230- Scheme of compromise or
arrangement: It
permits negotiations with creditors and members and protects the
minority. A tribunal ruling may also include an exit offer to dissident
shareholders in order to fully carry out the conditions of the C & A,
according to section 230(7)(c) and (e). If the C & A results in a variation
of a shareholder's rights, section 48's provisions must be followed.
Section 241-Oppression &
Mismanagement[10]: Where section 241 is relevant, the
majority rule principle is not applicable. If a shareholder claims that the
company's business activities are being run unfairly to some shareholders,
including himself, or against the well-being of the public, he may file a
petition with the tribunal under section 241 to make his complaint.
Section 235-Rights of dissentient
shareholders under take-over bids: 90% of the shareholders have accepted the offer for the
acquisition of the shares, and the offer's maker may take the remaining 10% on
the same terms. Dissenting stockholders will get notice outlining the
conditions. They have the right to petition a tribunal not to allow the
acquisition of their shares under these conditions. Tribunal has the right to
issue any orders it sees suitable.
Class Action; Section 245: A specific request for relief
submitted to the tribunal by a set of individual members on the basis that the
organization's affairs are being handled in a manner that is harmful to the
best interests of the business and its members. The Tribunal may make whatever
directions it deems appropriate[11].
A holistic study on minority right
protection in India with reference to all major legal, regulatory and civil
society initiatives is yet to be made more stringent. In addition, available
literature has not made a comprehensive study of India’s efforts to protect
minority rights with reference all existing related international regimes.
[H] CHAPTERISATION
The research is divided into the
following seven parts excluding the present introduction:
Chapter 1: Introduction
Chapter 2: Majority Rule and Minority Rights
Chapter 3: Does the Companies Act 2013 balances
the equation?
Chapter 4: An examination of the best legal
procedures in each country for defending the rights of minority shareholders.
Chapter 5: Issues and Challenges associated with
protection of Minority Shareholders Right in India.
Chapter 6: Judicial responses on Minority rule
and Minority Rights
Chapter 7: Conclusions and Suggestions
CHAPTER 1: INTRODUCTION
Decisions about a firm are frequently
made with the majority of shareholders' interests in mind. All decisions,
whether they relate to management or money, are made using the majority. The
judgements made by the majority are seen to be just, fair, and beneficial to
the business. The viewpoints of minority shareholders, however, are not always
taken into consideration. They have little influence over how the corporation
is operated, thus their rights and interests are often disregarded. By
defending the best interests of minority shareholders, the business world
strives to preserve a balance between effective and efficient control over the
organization.
A corporation can only be successful
if all of its workers accept one another's viewpoints and methods of operation while
working together to realize a common objective. The majority of shareholders
may sometimes take over the interests and rights of the minority stakeholders,
which may lead to biased management inside the organization. Minority
shareholders' rights and interests are safeguarded under the 2013 Companies
Act. The regulations enacted to safeguard minority shareholders' interests are
designed to ensure that companies utilize their authority in a manner that is
compatible with the principles of fairness and equality.
In the opinion of Palmer[12]: "A
proper balance of the rights of majority
and minority shareholder's is essential for the smooth functioning of the company”[13].
Therefore, there are many measures for the safeguarding of the rights of investors
in corporations in the current corporations Acts. The purpose of these laws is
to compel persons in charge of a firm to execute their authority in accordance
with specific equitable treatment and fair play principles[14].
CHAPTER 2: MAJORITY RULE
AND MINORITY RIGHTS
Under Companies Act, 2013 powers have been divide between two parts:-
DIVISION OF POWER
1.
Board of Director
2.
Shareholders
Stakeholders exercise their power during the annual general meeting,
whereas directors exercise their authority at BOD meetings. Even though the
general meeting is where the company's legal activities must be carried out,
the board of directors is actually given the majority of these rights by the
company's constitutional papers, the memorandum of association and the articles
of association. Therefore, rather than being actively engaged in the corporate
governance process, the members operate as passive investors.
The members may perform certain directorial tasks in specific situations.
a circumstance in which the board of directors is unable to resolve a
disagreement or when there is insufficient quorum at a meeting. In the
authority of Alexander Ward & Co. Ltd v. Samyang Navigation Co. Ltd,
the idea of residual authority "in its absence of an effective board"
was established. The directors in this case "may exert every authority of
the organization which are not by the Regulations or by these
rules required to be performed by the organization in general
meeting" shall be in charge of managing the company's affairs[15].
They claimed that the firm couldn't file a lawsuit since there were no
directors, but the House of Lords set aside this claim. Because it gives
shareholders the ability to override a director's decision, the notion of
residual authority is crucial[16].
In a similar case, Foster v. Foster, it was decided that in the absence of
directors, members might act as the company's agents to conduct business[17].
The notion of residual authority in this area of law was believed to be
difficult to support in the nineteenth century, but all of those beliefs have
been disproved by the more recent ruling in Barron v. Potter. In the case of
Baron, the absence of one of the directors resulted in the cessation of all
business activities. In the given circumstance, Warrington J's decision states
that the general meeting of the company has the power to choose a new director
as the directors lack the ability to do so[18].
THE MINORITY AND MAJORITY SHAREHOLDERS
A person is regarded as the majority
shareholder if they possess over fifty percent of the company's stock. With a
majority ownership position in the company comes great power, especially if
those shares come with voting privileges. a large majority Shareholders may now
take part in significant company decisions. For instance, selecting directors,
making corporate decisions, etc. They are able to control the corporation this
manner because they have the voting power to do so[19].
A minority shareholder is someone who owns
less than 50% of the company's shares, on the other hand. The benefits received
by the majority holder are not available to a minority holder. Minority
shareholders have little opportunities to profit from a company's activities,
such as getting dividends or being able to sell their shares at a profit. The
minority shareholder might not be able to vote and has no management authority
over the business.
For Instance:- Mr. John, who holds around 55% of the Galaxy Company's stock.
Mr. David owns 7% of the company, Mr. Stan owns 8%, Miss Black Widow holds 9%,
Mr. Roger owns 13%, and Miss Pitt owns the remaining shares. We can observe
that Mr. John owns the majority of the shares in this case relative to the
other shareholders. He might have a significant impact on the business. The
remaining individuals are considered minority shareholders since they possess
less than 50% of the company's stock.
RULE OF MAJORITY & MINORITY RIGHTS
As a company has no actual existence, it is an artificial entity. It is
managed by the directors, but they follow the majority's wishes. The
administration of corporate affairs now complies with the majority rule
principle. The decision adopted by a large majority of the members is accepted
by the directors. The majority members are in charge and are in charge of the
organization. The members can approve resolutions on a variety of topics with a
simple majority vote or a three-fourths vote. A resolution is enforceable
against all of the company's members after it has been approved by a majority.
If the company is wronged, the shareholders (members) personally do not have
the right to file a lawsuit against the perpetrator since the company is the
legal entity with its own personality and can do so[20].
In view of Palmer[21]
“The term "the rule in Foss v. Harbottle" refers to two
separate but related legal doctrines. The first tenet is that if a firm can
approve or overlook an internal irregularity through its own internal system,
then the court will often not become involved. The second is that, initially,
the only legitimate plaintiff in cases where a tort is allegedly done to a
corporation is that firm itself. Jenkins LJ reiterated the ruling in Edwards
v. Halliwell in the following words[22] "This
is all that the Foss v. Harbottle ruling says. First off, the
corporation itself is in all likelihood the rightful plaintiff in regard to a
harm that is claimed to have been done to it. For the simple reason that if a
simple majority of the company's members approve of what has been done, cadit
quaestio, no individual member of the company is permitted to continue an
action in respect of that matter where the alleged wrong is a transaction that
could be made obligatory on the company by a simple majority of members.”
CHAPTER 3: DOES THE
COMPANIES ACT 2013 BALANCES THE EQUATION?
DEMOCRACY IN A CORPORATE SET UP
In a democracy, the majority rules
and decides, but the interests of the minority must also be upheld and
protected. As a result, democracy requires both minority rights and majority
control. In truth, the rights of the minority must be preserved under the
present definition of democracy regardless of how different or distant they are
from the society at large; otherwise, the liberties of the majority become
worthless. In a business, the majority also controls and makes choices, just as
in a democratic country. As a result, the shareholders' democracy, similar to
that of a democratic country, may significantly contribute to energising the
BODs, enhancing business performance, and ensuring that the general public is
more involved in the growth of industry. Democracy refers to government that is
run by, for, and by the people[23]. In
that context, the term "shareholder democracy" refers to the
governance of the shareholders, by the shareholders, and for the shareholders
in the corporate entity to which the shareholders belong.
CASE LAWS
FOSS V. HARBOTTLE[24]
Court: Court of Chancery
Quorum: Wigram VC, Jenkins LJ
Petitioner: Richard Foss and Edward Starkie
Turton
Defendants: Thomas Harbottle & Other’s
FACTS OF THE CASE
In September 1835, the Victoria Park
Company was founded to purchase 180 acres (0.73 km2) of land near to
Manchester. The business's directors and other parties participated in actions
that might result in the theft of corporate assets, such as property theft.
Richard Foss and Edward Starkie Turton, two small investors, gave illustrations
of the problem. The organization's five directors are Thomas Harbottle, Richard
Bealey, Henry Byrom, Joseph Adshead, and John Westhead, according to their
information. They constructed their case on the ground underneath. The first
defence was the dishonest embezzlement of business funds. The company lacked
enough qualified directors to fill up the board, which was the second reason,
and there was no office or clerk present, which was the third reason. Due to
these facts, the owners were compelled to sue the directors rather than
relinquish ownership of the property.
ISSUE IN THE CASE
The question was whether or not the
company's members could bring a lawsuit on the company's behalf and whether or
not the wrongdoers could be held responsible for their actions.
JUDGMENT OF THE CASE
In the present instance, Wigram VC
dismissed the shareholders' claim and came to the conclusion that no individual
shareholder or other third party may bring a claim against the business for
damages suffered by it since the company and its shareholders are both
recognised as separate legal entities. The business must file a lawsuit or take
other legal action against any members who have stolen the company's property
without permission since the company, not its shareholders, has suffered
injury. The two primary norms were therefore effectively established by the
court.
The first and most significant rule
was known as the "Proper Plaintiff Rule" and it stated that only an
organization could file a complaint against the directors or other third
parties to enforce its rights in the event the organization was wronged or
suffered loss as a result of the deceptive or careless acts of directors or any
other outsider. The corporation may only be sued or sued by the company itself
because of the "Separate Legal Entity" principle, which regards the
business as a separate legal entity from all of its members and forbids members
of the organization or other individuals from suing on the organization's
behalf.
The second rule, referred to as the
"Majority Principle Rule," declared that if the alleged injustice
could be confirmed or supported by a 1/3rd majority of members present at the
general meeting, the court would not become involved. Justice Mellish provided
a clear rationale for the aforementioned rule in another case, Macdougall v.
Gardiner[25]. The
norm should be observed, the court said, if the complaint pertains to an action
that the majority of the business is legally allowed to do, was taken
irregularly but within the parameters of that right, or was taken unlawfully
but the majority of the company is suing over it. The only method to settle
this is to hold a meeting, at the moment the desired result will be achieved.
In the case of Rajamundary
electric supply co. vs. Nageshwar Rao[26],
it was decided that the court would typically not get involved at the request
of a shareholder in internal management disputes and would not interfere with
the directors' management of the company as long as they were following the
authority granted to them by the company's articles of association.
Furthermore, the minority owners often have little redress if the directors are
given backing for their choices by the majority shareholders.
CRITICAL ANALYSIS OF THE CASE
Minority shareholders cannot bring
such a claim, the court said. It was determined that just one shareholder or
someone not connected to the business could not file a case against such
conduct against the corporation since the corporation and its stockholders are
separate legal entities. Company is a distinct legal entity that may be sued in
its own name. As a consequence, the company would be the proper plaintiff in
this instance since the tort took place against the corporation. When anything
goes wrong, the majority shareholders have the power to act on behalf of the
company and decide what legal action will be taken. This clause had a negative
impact on minority shareholders since it barred them from filing a lawsuit in
the event that anything went wrong. As a consequence, the two rules that the
court established were created. The first criteria is known as the
"suitable plaintiff rule," while the second is known as the
"majority principle rule." The company may file a lawsuit against a
particular person under the applicable plaintiff rule for wrongs done to it or
losses sustained as a consequence of carelessness or fraud on the part of
members or directors. The additional
rule, known as the majority principle rule, states that when a judgement can be
made or confirmed by a simple majority, the court will abstain from meddling in
the internal business of the organization.
JUSTIFICATION AND ADVANTAGES OF THE
RULE IN FOSS V. HARBOTTLE
The principle established in Foss
v Harbottle[27] that
the will of the majority triumphs serves as justification for the rule. A
shareholder commits to adhere to the majority's will when they join a firm. The
regulation really upholds the majority's authority to choose how the company's
operations will be managed. Only the organization itself, acting consistently
with its majority, and not a particular shareholder, may seek remedy if any
wrong is done to the firm. Additionally, a business is a person in law; as
such, it owns the action and cannot be initiated by a single stakeholder. The
sole and legitimate plaintiff in any case where a corporate body is allowed to
sue on its own behalf to recover property from its officers, directors, or any
other person is that corporate entity.
FOLLOWING ARE THE ADVANTAGES OF THE
RULE IN FOSS VS. HARBOTTLE CASE:
1. Need to protect the majority's decision-making
authority: According to the ruling in Foss v Harbottle[28],
the majority's decision-making authority is protected. It is just that the
majority's desires should be fulfilled.
2. Avoiding several useless lawsuits: Clearly,
there might be as many lawsuits as there are stakeholders if each individual
member was allowed to bring a claim against anyone who had harmed the firm via
a violation of duty. Legal processes would never end, wasting a great deal of
money and time.
3. Avoiding several pointless lawsuits: It goes
without saying that there may be as many lawsuits as there are stakeholders if
each individual member were allowed to bring a claim against anyone who had
harmed the firm via a breach of duty. Legal processes would never end, wasting
a great deal of money and time.
4. Recognition of the corporation's distinct legal
personality: If a company has been harmed, rather than the individual
members, the company should seek restitution.
5. Minority lawsuit litigation is
pointless if the majority opposes it: It is useless to file a lawsuit over an irregularity that
can later be approved by the majority unless the majority in a general assembly
agrees to it first. The articles in Mac Dougall v. Gardiner[29]
gave the chairman the authority to adjourn a meeting with the approval of the
meeting and also allowed for the holding of a poll if the shareholders so
requested. A vote was then required and the chairman rejected it. The
postponement was moved and then proclaimed to have been carried. A shareholder
filed a lawsuit seeking a ruling that the chairman's actions were unlawful.
According to the ruling, only the corporation may file a lawsuit if the
chairman made a mistake[30].
CHAPTER 4: AN EXAMINATION OF THE BEST LEGAL PROCEDURES IN EACH COUNTRY
FOR DEFENDING THE RIGHTS OF MINORITY SHAREHOLDERS.
EXCEPTION TO THE RULE IN FOSS V.
HARBOTTLE
The majority supremacy does not,
however, always win out. Foss v Harbottle[31]
rule is applicable in situations where businesses have the authority to approve
managerial transgressions. However, a majority of shareholders cannot accept or
confirm certain actions. In such circumstances, each and every stakeholder may
file a lawsuit to enforce the company's debts. He presents the acts in his
capacity as an agent for the business. A collective action of this type is
known as a “derivative action”[32]
in American literature.
01)
Illegal and Ultra Vires Acts :- When the act complained of is ultra vires the corporation[33],
the decision in Foss v. Harbottle does not apply because even a unanimous vote
of the stakeholders cannot ratify such an act. In these situations, it appears
that the plaintiff stockholder may file a personal action based on the
business's violation of its memoranda or a derivative action based on the harm
done to the organization by those who forced it to act outside of its authority[34].
02)
The complainant may file an individual or class action against the
company, and the directors may be added as co-defendants so that an injunction
may be made against them as well, if a complaining member seeks an order that
the organization shall recover compensation for an ultra vires act that has
already occurred, or shall recover property disposed of by an ultra vires
transaction[35].
03) In authority of Bharat
Insurance Co. Ltd. Vs. Kanhaiya Lal[36], The
Hon'ble Court held that as the company is the best judge of its own business,
the court should stay out of the matter. However, the usage of assets owned by
an organization extends beyond straightforward internal management. It is
alleged that the directors broke the law by utilising the company's cash. In
certain circumstances, an individual may launch a lawsuit to get a statement on
the precise composition of the in dispute item.
02) Fraud on Minority:
A single shareholder may impeach the
actions of a majority of a company's members if they use their influence to
cheat or mistreat the minority[37]. However,
it must entail an unjustifiable use of the majority's authority that results in
or is likely to result in financial loss or unjust or discriminating treatment
of the minority. Discrimination or fraud need not constitute a tort under
common law. A decision amending the company's memorandum or articles must also
be more severe than the majority's failure to act with the best interests of
the business as a whole for the court to declare it invalid[38]. Fraud
is defined as any circumstance where the wrongdoers "are attempting,
either explicitly or implicitly, to appropriate to themselves money, property,
or advantages which belong to the organization or in which the other
stakeholders are entitled to participate." The majority's authority must
be used honestly and in the best interests of the whole business. If they are
not so exercised, there has been a "fraud on the minority"[39]. The
phrase "benefit of the company as a whole" appears to have been
lifted from the ruling by Lindley MR in Allen v. Gold Reefs of West Africa
Ltd., where he said: "The authority for altering articles must, like
every other authority, be utilized subject to those fundamental tenets of
equity and law which are applicable to all powers granted on the majority and
allowing them to bind minorities. It must be used "bona fide" and for
the benefit of the whole organization[40]. The
Supreme Court declared in Brown v. British Abrasive Will Co. that the
minority shareholders' rights could not be taken away by the majority and that
the alteration of the articles may be prohibited.[41]
3) Acts requiring special resolution:
Only a general gathering of
stakeholders that passes a particular resolution may carry out such acts.
Therefore, if the majority plans to carry out any such act by passing just an
ordinary resolution or without adopting special resolution in the manner
required by law, any member or members may bring an action to restrain the
majority. In the cases Dhakeswari Cotton Mills Ltd v. Nil Kamal Chakravorty
and Nagappa Chettiar v. Madras Race Club, such proceedings were
permitted[42]. A
specific resolution is required, for instance, if the registered office is
moving from one city to another. However, if it is accomplished by a regular
resolution, the minority may decide to file a lawsuit.
4) Wrongdoers in control :-
The majority of the shareholders
might decline to enable legal action to be taken against the perpetrator, even
though the business has been manifestly injured. In some circumstances, any
shareholder or member may initiate a lawsuit on the company's behalf to
safeguard the interests of the business[43].
This was recognized in Foss v Harbottle[44]
itself: “One cannot help but believe that the principle so forcefully outlined
by Lord Cottenham in Wallworth vs. Holt[45]
and other cases would apply, and in the event that a corporation is harmed by
some of its members and there is no other viable course of action, the
corporators may file a lawsuit in their individual capacities, seeking to
protect the rights to which they are legally entitled under the company's legal
personality.”
5) Individual membership rights:
The only privileges to which the
majority rule notion applies are the privileges of membership in the
corporation that a member enjoys. If a member's personal rights, such as the
ability to vote and the right to dividends, are infringed, they are
nevertheless permitted to continue under their own names. Individual personal
rights are granted to each shareholder against the company and his fellow
shareholders. The majority of these rights were provided to shareholders by the
Act, however some may also be derived from the charter of organization. These
rights, which are more often known as "individual membership rights"
since they are honored, are not subject to the rule of majority. "If a
privilege like this is in question," Palmer stated, "an individual
shareholder can, on fundamental nature, defy an overwhelming majority
consisting of all the other stockholders."[46].
For instance, the court said in Nagappa Chettiar v. Madras Race Club[47]
that " a
shareholder has the right to defend their individual rights against the
corporation, including their right to vote, their right to have their vote
recorded, and their right to vote or run for office as a director of the firm."
6) Oppression and mismanagement:
if the controlling shareholder has
conducted improper business. In such cases, the majority rule will not apply,
and oppressive mismanagement may be stopped by filing a lawsuit by minority
shareholders. In Kanika Mukherji v. Rameshwar Dayal Dubey[48],
Sinha J. of the Calcutta High Court ruled that the fundamental tenet of the
sections of the Companies Act that prevent oppression and mismanagement is an
exemption to the rule in Foss v. Harbottle that establishes the inviolability
of the majority rule[49].
CHAPTER 5: ISSUES AND
CHALLENGES ASSOCIATED WITH PROTECTION OF MINORITY SHAREHOLDERS RIGHT IN INDIA.
Only when the dominant shareholders
recognize their legal responsibilities to all stakeholders and that they should
discuss the minority stakeholders before making decisions can the best
interests of the minority shareholders be really safeguarded.
A well-known concept in corporate law
is shareholder democracy, which includes the rule of majority as stated in Foss
V. Harbottle. This norm is still in effect, and courts often avoid
interfering with internal management when a company is doing business
legally. Addressing the concerns of
minority shareholders while properly taking into consideration the wishes of
the majority shareholders remains a significant point of debate in the context
of contemporary corporate governance. This is due to the fact that disputes
between majority and minority shareholders often arise throughout a company's
management and operation. Despite contractual and legal protections for the
minority shareholder, who holds more than fifty percent of the voting rights,
the controlling shareholder effectively governs the business.
Controlling owners often make choices
that are not in favor of the minority shareholders. This involves
soliciting existing customers and suppliers as well as conducting unauthorized
related party transactions, diverting corporate cash, starting a new business,
and creating a new one. Additionally, it entails paying out large salaries and
other benefits to the directors and other personnel picked by the controlling
owners as well as purposely reinvesting revenues to prevent minority
shareholders from receiving returns.
The Companies Act of 2013 now
includes a variety of provisions that safeguard the interests of minority
shareholders. If they feel that these concerns are being handled unfairly to
them or other shareholders, minority shareholders have the right to apply to
the National Company Law Tribunal for an investigation into the company's
activities. Even while the goal of these procedures is to protect the rights of
the minority shareholders, actually implementing them remains challenging. Due
to the fact that the majority owners continue to control the company's
management, it is possible that the minority shareholders won't have practical
access to sufficient evidence, such as information, accounts, or records, to
support their claim of wrongdoing.
Additionally, the 2013 Companies
Act's remedies are still being examined for efficacy, and traditionally,
litigation-based remedies have proven to be costly and time-consuming. In
addition, the stakeholder who makes the claim is responsible for covering the
whole expense of the legal procedures; yet, the shareholders only gains an
indirect benefit that is proportional to the success of the claim.
Promoters, who are often the main
owners in a firm, provide investors specific contractual rights when they buy a
minority position in it. These legally enforceable rights, which are often
outlined in the shareholders' agreement (or "SHA"), typically include
the right to proportionate board participation, the power to veto certain acts,
and access to records and information. Although these rights are crucial to
protecting the best possible interests of minority investors, the promoters
continue to have control over the firm's administration, and no one can
complain to bad management choices. The promoter's authority to choose the
majority of directors thus essentially voids the entitlement to board
representation. Minority shareholders may utilise their veto power as an
offensive strategy to oppose certain company decisions, albeit they do not
always have an affirmative right to control management.
The SHA also limits minority
investors' access to information and inspection rights to certain types of
records, including statutory records, periodic filings, and books of account;
in certain cases, these rights deny the investor access to evidence that could
be required to detect fraud.
The SHA also grants exit rights to
the minority investors. Minority investors' exit powers typically end up
existing just on paper since the SHA is seldom completely implemented in
reality. The promoter's desire and financial capacity are required for a
departure, and the only recourse that exists in the event that the sponsor
violates its commitments under the SHA is a drawn-out dispute resolution
procedure. Minority investors may find it difficult to withdraw if the promoter
and they do not get along. If the business is struggling, finding a third party
buyer becomes considerably more difficult. In many circumstances, a minority
investor may only be able to watch helplessly while the organization's value
declines.
The majority's power violates
shareholder democracy by ignoring the investments made by minority
shareholders. The absolute majority rule, as outlined in Foss v. Harbottle,
cannot be automatically applied in India, and the breach of fiduciary
responsibility by dominating shareholders would entitle minority owners to seek
redress from the dominant shareholders, in accordance with judicial precedents.
The shareholders in control must refrain from making any hidden profits from
the company, disclose all material information, exercise their authority in a
reasonable and equitable manner for the benefit of the company, and refrain
from abusing their position unfairly or fraudulently, according to judicial
precedents, even though the current regulatory system does not expressly state
their fiduciary responsibilities.
The Securities and Exchange Board of
India recognized the fiduciary duty owed by the controlling shareholder to the
minority shareholder in a 2012 consultative paper on the review of corporate
governance standards in India. The board also recommended that the dominant
shareholders of publicly traded enterprises enter into relationship agreements
with the publicly traded company and the minority shareholders that would
specify their obligations. The dominant
owners' fiduciary obligation to the minority shareholders has long been
established in many nations with developed capital markets.
When the dominant shareholders
understand their legal responsibilities to all shareholders and that they
should consult the minority shareholders before making decisions, only then can
the interests of the minority shareholders be really safeguarded. Minority
owners should be given an equal chance to resolve their disputes, according to
controlling shareholders. The board must use a more sophisticated approach,
aiming to maintain the firm's worth rather than meeting the needs of the
shareholders who own the business.
CHAPTER 6: JUDICIAL
RESPONSES ON MINORITY RULE AND MINORITY RIGHTS
The majority always rules in a
corporate democracy. Therefore, shareholder resolutions may be approved by a
simple majority in most countries or by a super/special majority of at least
three-fourths if the choice may have a significant impact on the operations or
future of a firm. All members and investors are bound by the majority decision
in this instance.
Insofar as the corporation's, the
majority shareholders', and the minority shareholders' interests are all
aligned, this is all well and well. But when a powerful promoter or management
group just thinks about (or is seen to be thinking about) its own gain, to the
cost of the firm and/or the minority shareholder(s), an executive room and
shareholder standoff may happen. What choices are there when the majority of
the management of the firm mismanages it to the disadvantage of both the
company and its minority stakeholders?
One of the main motivations for the
Companies Act, 2013, which enhanced procedures to guarantee that the majority's
influence is not abused via tyranny of the minority and poor management of the
firm, is shareholder protection. These steps guarantee that the existing power
structure remains intact and that minority' interests are safeguarded.
The original Companies Act of 2013
provided protection against majority mismanagement and exploitation, as well as
the ability to wind up the problematic corporation if it was deemed to be fair
and reasonable to do so. Even if the firm was otherwise bankrupt, the cure of
closing it down completely ended the abuse and bad management. The dissolution
also had an effect on the minority investors, who were the remedy's intended
beneficiaries.
However, if courts were convinced
that a winding up decision would not be fair, they might "make such order
in relation thereto as it thinks fit[50]"
under the Indian Companies (Amendment) Act, 1951, to stop the tyranny of the
majority.
The Companies Act of 1956[51]
(the "1956 Act") gave the previous Company Law Board
("CLB") wide jurisdiction to provide protection and reparation for
minority owners by dividing mismanagement and opresssion remedies
into separate clauses.
The Companies Act, 2013 (the
"2013 Act"), which among other things combined the provisions
relating to oppression and mismanagement as well as the Central Government's
ability to apply for redress in the public interest[52],
preserved the test for it being otherwise fair and just to wind up the company in
question, and fundamentally altered India's corporate law framework.
The 2013 Act also consolidated all
corporate jurisdiction into a single body, abolishing the CLB and establishing
the National Company Law Tribunal ("NCLT")[53]
and National Company Law Appellate Tribunal ("NCLAT")[54].
The NCLT/NCLAT were created with the intention of centralising, simplifying,
and assisting with the rapid settlement of business issues. Concerns about
oppression, bad management, and unjust bias claims are not arbitrable in India
as a result of this ban on civil court jurisdiction and arbitration[55]
(despite being arbitrable in other countries like Singapore and England and
Wales).
REMEDIES AGAINST OPRESSION, MISMANAGEMENT AND PREJUDICE
The 2013 Act's Sections 241-246
(subject to a minimum quota being met) provide assistance and security to
members of a company against inequality, poor management, as well as actions by
the majority or management of a company that are harmful to the interests of
the company or the public interest.
If the NCLT concludes after
evaluating an application that the circumstances justify the winding-up of the
business on just and reasonable basis but that such an order wouldn't be
entirely fair[56], it may
make whatever decisions it deems appropriate to put an end to the objections
presented. The NCLT has extensive power in this matter.
OPPRESSION
When a corporation's operations are
conducted against the interests of the public or the company, or when a few
members are subjected to unjust treatment, oppression has taken place[57].
Unless the abuse involves a shareholder nominee or appointed director and is
thus relevant to the shareholder himself, there would be no remedy under this
section for abuse of a person operating in a capacity other than that of a
member, such as a director.
In S.P., the Supreme Court outlined
the criteria used to define oppression. More than 50 years ago, in Jain v.
Kalinga Tubes Ltd[58].,
it was decided that behaviour involving a lack of probity or fair dealing with
a member in regards to his property rights as a shareholder must be oppressive,
severe, and illegal. Furthermore, unless a minority shareholder was being
oppressed by the majority in the management of the company's activities, a mere
lack of trust between the minority and majority shareholders would
not be adequate.
These concepts were developed upon
and used in different situations. Needle Industries India Ltd. v. Needle
Industries Newey (India) Holdings Ltd[59]
was decided by the Supreme Court. So unless it is done with malicious intent or
is extremely severe, onerous, and illegal, illegal behaviour won't be seen as
oppressed in and of itself. However, if several crimes have been committed
against the same individual, it would be reasonable to assume that they are all
part of the same oppressive target. The Needle Industries case was mentioned by
the Supreme Court in the V.S. Westfort Hi-Tech Hospital Ltd. v. Krishnan[60].
They came to the conclusion that the criteria for evaluating whether or not an
action is oppressive, whether it is illegal but rather if it involves a
lack of integrity, good moral character, or a conduct that was malicious,
severely onerous, incorrect, or for a secondary aim. Additionally, it was said
that although the eventual aim of such an action could be in the best interests
of the corporation, the immediate goal would favour certain stakeholders more
than others.
These events show how a single act
may not satisfy the criteria for tyranny. Typically, if numerous/continuous
actions by the majority shareholders persisted up to the petition date, it
would be shown that the business operations were being conducted in an
oppressive manner[61].
However, this is only a standard of reasonable judgement that judicial bodies
have established to avoid fruitless litigation so that a group of irate
shareholders won't interfere with the business as usual by complaining about
every little or isolated act of tyranny. It was deemed oppressive to give a
single member additional shares at a meeting without following the law and
without also offering them to other members on a pro rata basis[62].
However, even a single, heinous act of oppression may still be taken into
consideration[63],
particularly if its effects are long-lasting and the affected members are
completely devoid of any significant rights or privileges[64].
Using the same illustration, even if
the oppressive conduct complained of was more severe, it is not necessary for
gaining protection that it was unlawful. The remedy may still be applied even
though the conduct is legitimate[65].
Even if such action is entirely legal, such as an allocation of shares where
the distribution lowered the petitioners to a weak minority, it would
nevertheless be seen as oppressive[66].
Similar to this, measures that are legal but may be outlawed for being unjust
include rights disputes brought about specifically to lower minority holdings,
preferential distributions to certain shareholders at significant discounts,
etc. However, if the share distribution or issuance was legal and in the
company's best interests, oppression won't happen even if it unintentionally
leads to the majority shareholders losing control of the corporation or
becoming a minority[67].
Exemplary instances of oppression
include neglecting to support the appointment of the managing director despite
the shareholders' agreement's management management terms being broken[68].
MISMANAGEMENT
The word "mismanagement" is
used to indicate treatment of a company's operations that is seriously damaging
to its interests[69]. By
include changes that are harmful to shareholders or any class of shareholders,
the 2013 Act extended the definition of a change. The following scenarios may
occur: (a) the use of public money for improper or unwanted goals, which would
seriously impair the company's finances[70];
(b) gross negligence in managing business difficulties; and (c) inactivity[71].
Whether as a consequence of a change
in the company's membership, the board of directors, the manager, or the
ownership of the firm's shares, a major change in the management or control of
the organization may give rise to a mismanagement charge. This change results
in the actual mismanagement of the business or the danger that its affairs will
be managed in a way that is detrimental to the interests of the company, its
shareholders, or any class of shareholders[72].
Relief will only be granted if it can
be shown that the change will cause the company's affairs to be managed in a
manner that is harmful to the public interest or the company's interests[73].
Poor management practises include
selling the company's assets at a bargain while breaching the law, which
results in the loss of the company's foundation or ability to operate[74].
Poor management, however, cannot simply be characterised as making bad or
unsuccessful business choices, etc.
PRE-JUDICIAL ACTS
According to a new clause in the 2013
Act, Members now have remedies against a company conducting its operations in a
manner that is harmful to their interests.
Indian courts have not yet offered a
meaning of the term "prejudicial to the interest of its members or any
class of members" in the context of corporations since it is a relatively
new concept. A prejudiced conduct is one that has an adverse effect on the
petitioning shareholders' interests, as described by Black's Law Dictionary by
"prejudice" as "unfairly disadvantageous; inequitably
detrimental" and "prejudicial" as "tending to harm, injure
or impair; damaging or hurtful[75]."
For instance, the R.N. case was decided by the Andhra Pradesh High Court in
Deccan Enterprises Pvt. Ltd[76], the
petitioners shareholders' interests were harmed by the single action of issuing
extra shares with the express intent of altering the ownership pattern in the
benefit of certain shareholders and subsequently changing the composition of
the board of directors. Given that the company was profitable (and that
ordering its dissolution would not be appropriate in this case), the court
hired an interim administrator or special officer to take over and manage the
company's affairs in place of the board of directors.
JUST AND EQUITABLE GROUNDS FOR WINDING UP OF A COMPANY
The applicants must show that it
would be fair and reasonable to wind up the firm in question as a result of
such acts, but that the issuing of such an order would unfairly disadvantage
them in order to be eligible for relief for oppressive, negligent, or other
detrimental behavior[77].
The loss of the company's operational
foundation, functional paralysis, and utter lack of faith in the conduct and
management of the company's affairs are recognized as the reasons for a winding
up on fair and just terms (rather than just a lack of confidence between the
majority and minority shareholders[78].
Mr. Cyrus Mistry was stripped of his
responsibilities as Executive Chairman of Tata Sons Limited and directorships
in other businesses within the Tata Group by resolutions approved at several
board and shareholder meetings in the matter of Tata Consultancy Services
Ltd. v. Cyrus Investments (P) Ltd[79].
minorities Cyrus Investments Pvt. Sterling Investment Corporation Pvt. Ltd.
Ltd. (shareholders of the Tata Group of Companies, in whom Mr. Mistry had a
majority position), believed that the removal and the way it was conducted were
oppressive. So they complained about poor management, discrimination, and
prejudice to the NCLT. The minority group lost in the NCLT's decision. The
NCLAT found in favor of the minority group, stating that Mr. Mistry's removal
from his positions as Executive Chairman of Tata Sons and as a Director of
several businesses was oppressive and discriminatory. As a result, it required
Mr. Mistry's rehabilitation. When Tata Sons appealed the NCLAT decision, the
Supreme Court overruled it, concluding that Mr. Mistry's termination as
executive chairman of Tata Sons was not repressive nor harmful to the interests
of the minority group.
The court also pointed out that the
case's factual matrix did not satisfy the requirement for validating the
company's dissolution. The "just and equitable clause" is only used
in certain situations, such as
(a) where there is a functional deadlock—a failure of
members to cooperate paralyses the business from functioning—and
(b) when there is a legitimate loss of trust in the
behaviour of the directors. Minority shareholders would not be justified in
placing less trust in management than the majority of shareholders.
The NCLAT's finding that it was fair
and reasonable to wind up Tata Sons was incorrect since charity Trusts, not
persons or businesses, controlled the bulk of the shares of Tata Sons (Private)
Limited. If Tata Sons were to be dissolved, these trusts would starve to death.
NUMERICAL THRESHOLD
An oppression, mismanagement, or
prejudiced conduct claim must be maintained before the NCLT by a member who
owns at least 10% of the "issued share capital of the company" or
1/100th of its entire membership, whichever is less. In the alternative, the
member must own at least 1/5 of the whole membership if the firm does not have
a share capital[80]. This
protects the majority against obnoxious litigation brought by minuscule
minority.
However, if required, the numerical
criterion may be disregarded. When it decided that the minority group may keep
suing even if its membership fell below the 10% threshold, the NCLAT did so in
the Tata Sons case[81].
The NCLAT concluded that if unusual circumstances were shown to exist (which it
judged to be the case in that instance), it may grant a "waiver" and
proceed with the application. For instance, if the applicant(s) have a sizable
stake in the company, there is a fragmented minority shareholding cluster, and
the oppressive act for which the waiver is requested has reduced the number of
members below the 10% threshold, the waiver will be granted even though the
applicant(s) do not meet the 10% requirement.
In order to avoid the filing of
frivolous lawsuits, the NCLT is permitted to examine an action via a smaller
but adversely affected minority shareholder group while still maintaining this
criterion.
THE GRANT OF RELIEF
The NCLT/NCLAT has been given broad
latitude to impose remedies to protect minority interests in order to
"bring closure to the matters complained of." To do this, the NCLT is
allowed to interfere in the administration of the business for the benefit of
minority shareholders or the firm, including by appointing new management and
overseeing the company's activities. To temporarily or permanently assume
control of the firm, the NCLT may propose candidates for the board of
directors, name administrator(s), a special officer, or a committee of advisers[82]. The
Cyrus Mistry case, decided by the Supreme Court, made clear that this expansive
authority is not absolute or limitless, and it most definitely does not include
the power to force the reinstatement of a director or officer[83]. The
Court therefore overturned the NCLAT's decision to reinstate Mr. Mistry as the
Executive Chairman of Tata Sons on the grounds that it lacked legal backing and
had no basis in the pleadings.
The 2013 Act protects the rights of
minority shareholders in Indian businesses by empowering the NCLT to provide a
variety of reliefs to address oppression, management issues, bias allegations,
and minority interests. Even while it may seem challenging to show that the
business in question should be shut down, doing so strikes a balance between
the interests of the minority and the majority as well as the corporation to
achieve genuine justice.
CHAPTER 7: CONCLUSIONS
AND SUGGESTIONS
The dialogue makes it clear that in a
company, just as in a democratic country, choices are made and backed by the
majority. Similar to how a democratic country would safeguard its minority
shareholders when the majority breaches their rights, corporate law does the
same. However, in corporate matters, the size of an individual's shareholding
is significant and if one individual holds the majority of the shareholding and
votes in favor of a scheme of arrangement, that decision will be binding on
numerous people who make up the minority, even though their shareholding
amounts to a much smaller percentage than the majority shareholding of a single
person. The Court will not intervene at the request of shareholders in internal
administrative matters, and it won't get involved with a company's management
by its directors so long as they are acting in compliance with the power
granted to them by the company's articles of incorporation, according to the
rule established in Foss v. Harbottle. One may argue that the decision in the Foss
v. Harbottle case is a logical extension of the notion that a company is a
separate legal person. The majority rule suppressed minority shareholder voices
under the previous statute from 1956, but under the current law—the 2013
Companies statute—different procedures have been put in place to protect
minority shareholders' rights in the organization. The Companies Act of 2013
(the "Act") provides appropriate protection for the rights of
Minority Shareholders in the Company.
REFERENCES:
BOOKS:
Ø
Avtar
Singh, Company Law, Eastern Book Company.
Ø
Ramaiya,
Guide to Companies Act, Lexis Nexis Butterworths Wadhwa, Nagpur.
Ø
Gower
& Paul L. Davies, Principles of Modern Company Law, Sweet and Maxwell.
Ø
TAXMANN’S
Compan Law & Practice, 24th Edition.
Ø
Palmer,Palmer’s
Company Law, Stevans, London.
Ø
Robert
R. Pennigton, Company Law, Oxford University Press.
Ø
Principles
of Company, Professor Nicholas Bourne, 3rd Ed., Cavendish Publishing Limited
ARTICLES:
v
Majority
Rule and Minority Protection under Companies Act 1956 with special reference to
Foss vs. Harbottle, Dr. Sukhvinder Singh Dari, International Journal of
Research (IJR) Vol-1, Issue-9 October 2014 ISSN 2348-6848
STATUTES:
·
The
Companies Act, 1956
·
The
Companies act, 2013
ELECTRONIC SOURCE:
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[5] Clive M. Schmitthoff and Curry
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[7] The Companies Act, 2013
[13] Clive M. Schmitthoff and Curry
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[23] Majority Rule and Minority
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Harbottle, Dr. Sukhvinder Singh Dari, International Journal of Research (IJR)
Vol-1, Issue-9 October 2014 ISSN 2348-6848
[24] [1843] 67 ER 189
[47] (1949) 1 MLJ 662, 667: ILR1949 Mad
808.
[49] Jones v. HF Ahmanson& Co, 81
Cal Rptr 592
[50] Section
153C was inserted in Indian Companies Act, 1913 by the Indian Companies
(Amendment) Act, 1951
[51] Section
397 and Section 398 of the Companies Act, 1956
[52] Section
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[56] S.P.
Jain v. Kalinga Tubes Ltd. AIR 1965 SC 1535
[57] Section
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[59] 1981
3 SCC 333
[60] 2008
3 SCC 363
[62] K.
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[63] Tea
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[68] Vikram
Bakshi v. Connaught Plaza Restaurant Ltd. 2017 SCC Online NCLT 560
[69] Section
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[70] K.R.S.
Mani & Ors. v. Anugraha Jewellers Limited & Ors., (2000) 100 Comp Cas
665 (CLB)
[74] Malyalam
Plantation India Ltd Re 1991 5 Corpt LA 361 Ker; AIR Asia Ltd. Re 1994 3 Comp
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[76] R.N.
Jalan v Deccan Enterprises Pvt. Ltd, (1992) 75 Comp Cas 417, paragraph 26
[79] Tata
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[80] Section
244 of the Companies Act, 2013
[81] Cyrus
Investments Pvt. Ltd. v. Tata Sons Ltd. SCC OnLine NCLAT 261
Article Information
Majority Shareholders Power And Minority Sharholder’s Right: An Analysis
Authors: Anurag Singh
- Journal IJLRA
- ISSN 2582-6433
- Published 2024/06/17
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
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