CORPORATE MOOT 2013-2014

Before THE HONOURABLE COMPANY LAW TRIBUNAL, AHMEDABAD

PETITION NO. _____/2013 Pulkit !i"##########....................................

########... P$titi%"$& v. A'(i'( )u*!& +Di&$,t%&, P.A.-. P(!&*! P&i.!t$ Lt/0 ............. #......R$'1%"/$"t

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CORPORATE MOOT 2013-2014

TABLE OF CONTENTS

Index of Abbreviations..........................................................................................................................3 Index of Authorities............................................................................................................................45 Statement of Jurisdiction........................................................................................................................6 Statement of Facts................................................................................................................................. 7 Questions resented.............................................................................................................................. ! Summar" of #eadin$s..................................................................................................................... %&5 ra"er.................................................................................................................................................. &6

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INDEX OF ABBREVIATIONS
AI' Anr. )om. *+) *+. /+' 12A 1o3 2rs. S)I S* S** Sd53.S. v.5 v5s : : : , : , , , : , : : : : : A## India 'e(orter Another )omba" *om(an" +a- )oard *om(an" +a- .ribuna# /u0arat +a- 'e(orter 1emorandum of Association 1emorandum of 3nderstandin$ 2thers State )an4 of India Su(reme *ourt Su(reme *ourt *ases Si$ned 3nited States 6ersus

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INDEX OF AUTHORITIS 10 -TATUTE.he *om(anies Act7 &%56

20 CA-E 8ouse of +ords in Scottish *o-o(. 9ho#esa#e Societ" +td. v. 1e"er [1959] AC 324 [HL] In re 8armer +td [1958] 3 All E.R. 689 :#der v5s :#der (1952) S.C. 49 Shri )a#a0i .exti#e 1i##s vt. +td. v5s Asho4 ;av#e (1989) 66 Comp Cas 654 (Kar) (DB) )anford Investment +td. v5s 1a$adh S(un i(e +td.7 (1998) 93 Com as!s 685 'adhe" Sh"am /u(ta v5s ;ama# 2i# and A##ied Industries +td " (2##1) Comp Cas! 33$ (D!l) (DB) 'e7 A *om(an"7 (198$) BCLC 593 (C%.) 'e7 )S) 8o#din$s +td.7 (1993) BCLC 246 (C%.) S.1. 'ama4rishna 'ao v5s )an$#ore 'ace *#ub +td. (19$#) 4# Com Cas!s 6$4 (&'s) Ja$0it Sin$h *ha-#a v5s .irath 'am Ahu0a +td.7 (2##4) 119 Comp. Cas. 385 (CLB) <eed#e Industries =India> +td v5s <eed#e Industries <e-e" =India> 8o#din$s +td A(R 1981 SC 1298 'e7 :#$indata +td. =<o &>7(1991) BCLC 959 (C%.)

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CORPORATE MOOT 2013-2014

'e7 +ondon Schoo# of :#ectronics +td7 (1985) BCLC 2$3 (C%.) S.1. /an(atram v. Sa"a0i Jubi#ee *otton ? Jute 1i##s *o (1964) ) *LR 8#4 <ana#a#a @aver and another v. )omba" +ife Assurnnce *o. +td (195#) SCR 39#"394 a#a4 ;umar 1onda# v5s *ine ? Su((#" *or(n. ? +td (2##2) 35 SCL 6#3 (CLB+ D!l+,B) I; Securities vt +td v5s 3nited 9estern )an4 . +td (2##1) 4 Comp L- 81 Sorab Ains0ai Aastur v5s A. .'. *assad7 (1963) 33 Com as!s 3#6 *o#. ;u#dee( Sin$h Ahi##om v5s Comp. Cas. 19 (,.H) ara$aon 3ti#it" Financers '. +td.7 (1988) 64

30 BOO) A 'amai"a7 B*/01! 2o 2%! Compa3'4s A 2" ,ar2+3C7 &7th :dition7 DE&E +exis <exis )utter-oerths 9adh-a7 <a$(ur *.'. Aatta7 B*.'. Aatta 2n .he *om(an" +a-7 6o#ume-3C7 9adh-a and *om(an"7 <a$(ur

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STATEMENT OF JURISDICTION

.8: *23<S:+S ': ':S:<.I</ .8: PETITIONER 8A6: :<A2'S:A .8:I' +:AAI</S ):F2': .8: COMPANY LAW TRIBUNAL7 UNDER THE PROVISIONS OF SECTION 39 AND 39! OF THE COMPANIES ACT" 19#$%

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STATEMENT OF FACTS
.A.S. -as incor(orated -ith &E7EEE eFuit" shares of 's. &E5- on 6 th A(ri#7 DE&3. .he three directors -ere first subscribers to the memorandum and artic#es of association and -ere a#so the first directors of the com(an" as (er the artic#es of the association. 1r. u#4it Jain -as the 1A of the com(an" and Ashish ;umar -as a non-executive chairman (residin$ over meetin$s. BSharad harmaceutica#s +tdC (roducin$ dru$s and (harmaceutica#s -as under

mort$a$e of ;a#u(ur ban4 +td. 1r u#4it Jain ne$otiated -ith the directors of S + and terms of ta4eover -ere decided of 's. D *rore to be (aid b" com(an" -hich -ere reduced into -ritin$ of 1o3 on D3rd a(ri#7DE&3 and si$ned b" the directors of both the com(anies. .o ensure smooth im(#ementation of the 1o3 -ith S +7 1r. u#4it Jain ne$otiated -ith )an4 for one time sett#ement of the dues of S + to the said ban4 of (a"in$ a #um( sum amount of 's. &.5& *rore and ensured a 1o3 bet-een the com(an" and the ban4 dated &6th Ju#"7 DE&3. And ban4 issued no ob0ection certificate to S + for sa#e of its factor" to the com(an". In (ursuant to the to the 1o3 on &6th 0u#"7DE&3 1r (u#4it 0ain (aid amount of 's &E7EE7EEE b" cheFue from his (ersona# funds to the com(an" for on-ard (a"ment to S +. Furthur7 mr. u#4it 0ain (aid cash of 's 57EE7EEE to ban4 direct#" from (ersona# funds on beha#f of com(an". In tota#7 ban4 received 's. 4E7EE7EEE from on account of its 1o3 -ith S +. Since the tota# (a"ment cannot be met throu$h (ersona# funds7 u#4it Jain a((roached S)I for a #oan for the ta4eover and runnin$ of the factor" of S + as (er 1o3 dated D3rd A(ri#7 DE&3. 1r. Ashish ;umar $ot different desi$ns on com(an"Gs (ro0ect and he $ot a desi$n on the rea# estate of the factor" and decided to scutt#e the (ro(osed ta4eover in co##usion

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CORPORATE MOOT 2013-2014 -ith certain directors and the 1ana$er. And on % th Aecember7 DE&3 1r. Ashsish 4umar and the directors of the S + executed a deed for cance##ation of 1o3 dated D3rd A(ri#7 DE&3 -ith Sharad harmaceutica#s +td -ithout informin$ u#4it Jain and in connivance -ith the directors of S + and the mana$er of the )an4. )ecause of this cance##ation of 1o37 a## efforts and mone" invested b" 1r. u#4it Jain to start the (ro0ect of the com(an" b" ta4in$ over the factor" of Sharad reached a dead end.
.

A$$rieved b" this7 1r u#4it Jain fi#ed a (etition.

&UESTIONS PRESENTED

1%

WHETHER THE ACT OF OPPRESSION AND MISMANA'EMENT HAS BEEN COMMITTED(

2%

WHETHER THE ACTIONS OF THE TWO DIRECTORS PREJUDICED TO THE PETITONER(

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PLEADIN'S ADVANCED
1% WHETHER THE ACT OF OPPRESSION AND MISMANA'EMENT HAS BEEN COMMITTED( It is humb#" submitted before this honourab#e tribuna# that the act of o((ression and mismana$ement under Section 3%7 and 3%! has been committed b" the directors. .he conce(t of Ho((ressionH Section 3%7 of our *om(anies Act fo##o-s c#ose#" the #an$ua$e of section D&E of the :n$#ish *om(anies Act of &%4!. Since the decisions on section D&E have been fo##o-ed b" the *ourt7 the :n$#ish decisions ma" be considered first. .he #eadin$ case on Ho((ressionH under section D&E is the decision of the Ho/s! o5 Lor1s 03 S o220s% Co+op. 6%ol!sal! So 0!2' L21. 7. &!'!r1. In 8armerHsD case7 it -as he#d that Ithe -ord H o((ressive H meant burdensome7 harsh and -ron$fu#. 2((ression )*+ ,*-. /011.2.3, 142)5 and need not necessari#" be for obtainin$ (ecuniar" benefit. It ma" be due to a desire to obtain (o-er and contro#7 or be mere#" vindictive.C In this case7 1r Ashish had cance##ed the 1o3 dated D3 rd A(ri#7 DE&3 because of his (ersona# $rud$es -ith certain directors of S + and the )an4 1ana$er. Amon$ the im(ortant considerations -hich have to be 4e(t in vie- in determinin$ the sco(e of Section D&E7 the fo##o-in$ matters -ere stressed in :#derHs 3 case as summarised at (a$e 3%4 in 1e"erHs case, I=&> .he o((ression of -hich a (etitioner com(#ains must re#ate to the manner in -hich the affairs of the com(an" concerned are bein$ conducted J and the conduct com(#ained of must be such as to o((ress a minorit" of the members =inc#udin$ the (etitioners> Fua shareho#ders.

1 2

K&%5%L A* 3D4 K8+L K&%5!L 3 A## :.'. 6!% 3 =&%5D> S.*. 4%

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CORPORATE MOOT 2013-2014 =D> It fo##o-s that the o((ression com(#ained of must be sho-n to be brou$ht about b" a ma0orit" of members exercisin$ as shareho#ders a (redominant votin$ (o-er in the conduct of the com(an"Hs affairs. =3> A#thou$h the facts re#ied on b" the (etitioner ma" a((ear to furnish $rounds for the ma4in$ of a -indin$ u( order under the 0ust and eFuitab#eH ru#es7 those fact must be re#evant to disc#ose a#so that the ma4in$ of a -indin$ u( order -ou#d unfair#" (re0udice the minorit" members Fua shareho#ders. =4> A#thou$h the -ord Ho((ressiveH is not defined7 it is (ossib#e7 b" -a" of i##ustration7 to fi$ure a situation in -hich ma0orit" shareho#ders7 b" an abuse of their (redominant votin$ (o-er7 are H treatin$ the com(an" and its affairs as if the" -ere their o-n (ro(ert" H to the (re0udice of the minorit" shareho#ders--and in -hich 0ust and eFuitab#e $rounds -ou#d exist for the ma4in$ of a -indin$ u( order . . . but in -hich the H a#ternative remed" H (rovided b" Section D&E b" -a" of an a((ro(riate order mi$ht -e## be o(en to the minorit" shareho#ders -ith a vie- to brin$in$ to an end the o((ressive conduct of the ma0orit". =5> .he (o-er conferred on the court to $rant a remed" in an a((ro(riate case a((ears to envisa$e a reasonab#" -ide discretion vested in the court in re#ation to the order sou$ht b" a com(#ainer as the a((ro(riate eFuitab#e a#ternative to a -indin$-u( order.I FACTORS IN CONSIDERIN' MEMBERSHIP9here the membershi( of the (etitioner -as dis(uted because his name -as not borne out b" the com(an"Gs re$ister of members7 the *om(an" +a- )oard su$$ested the fo##o-in$ criteria for seein$ -hether membershi( shou#d be reco$nised for a (ur(ose of a (etition, &> 9hether the (etitioner is in (ossession of re#evant share certificatesJ D> 9hether there are inde(endent records to estab#ish membershi( and

3> 9hether the com(an" has been treatin$ the (etitioner as a member4
/oin$ b" these considerations7 1r u#4it Jain is a member of the com(an" and his (etition under Sec 3%7 and 3%! had a lo /s s2a310. 1r u#4it Jain is a share ho#der b" the virtue of Sec D=D7>.

)anford Investment +td. v5s 1a$adh S(un i(e +td.7 =&%%!> %3 *om cases 6!5

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CORPORATE MOOT 2013-2014 In the case of S%r0 Bala80 9!:20l! &0lls ,72. L21. 7;s As%o< Ka7l!5*ertain shareho#ders fi#ed a (etition under Sec 3%7 and 3%! of the *om(anies Act7 &%56 a$ainst the com(an". .he com(an" too4 the (#ea that the (etition -as not maintainab#e as the (etitioners did not a((#" for the shares in -ritin$ and such the" -ere not the members. It -as he#d that the com(an" had treated the (etitioners as shareho#ders and a##otted shares in their favour. In the 'e$ister of the name of the (etitioners a((eared. It -as he#d that the (etition -as maintainab#e as for the (ur(oses of Sec 3%77 3%! and 3%% as the definition of a 1ember as contained in Sec D=D7> is a((#icab#e. .he (ersons sho-n on the 'e$ister of 1embers and Annua# 'eturns as shareho#ders or members are (rima facie entit#ed to fi#e (etition for re#ief under Sec 3%7 and 3%! read -ith Sec 3%% of the *om(anies Act7 &%56.6 It -as a#so he#d that the circumstances must be such as to -arrant the inference that I there has been7 at #east7 an unfair abuse of (o-ers and an im(airment of confidence in the (robit" -ith -hich the com(an"Hs affairs are bein$ conducted7 as distin$uished from mere resentment on the (art of a minorit" at bein$ outvoted on some issue of domestic (o#ic"I. .he (hrase Io((ressive to some (art of the membersI su$$ests that the conduct com(#ained of I shou#d at the #o-est invo#ve a visib#e de(arture from the standards of fair dea#in$7 and a vio#ation of the conditions of fair (#a" on -hich ever" share ho#der -ho entrusts his mone" to a com(an" is entit#ed to re#"C In the $iven case7 there has been o((ression on 1r. u#4it Jain b" the ma0orit". .he actions of the ma0orit" have #ed to an unfair abuse of (o-ers on the minorit" b" ta4in$ decision -ithout even informin$ the minorit". .he actions of the t-o directors of the com(an" and directors of S+ and the ban4 mana$er sho- that the" have de(arted from the fair dea#in$. And a#so the" have not consu#ted the (etitioner -hi#e cance##in$ the 1o3 and he has a#so invested his (ersona# mone" for that ta4eover to ha((en. .o maintain a (etition for 2((ression and 1ismana$ement (ersona# (re0udice to the (etitioner is not essentia#. It the affairs of the com(an" are conducted in a manner o((ressive to an" member or the (ub#ic interest the a((#ication is maintainab#e.7

5 6

=&%!%> 66 *om( *as 654 =;ar> =A)> 'adhe" Sh"am /u(ta v5s ;ama# 2i# and A##ied Industries +td7 =DEE&> *om( *ase 337 =Ae#> =A)> 7 'e7 A *om(an"7 =&%!7> )*+* 5%3 =*h.>J 'e7 )S) 8o#din$s +td.7 =&%%3> )*+* D46 =*h.>

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CORPORATE MOOT 2013-2014 1r u#4it had done this dea# to benefit the com(an" as a -ho#e but acts of 1r Ashish did not #ed to the ta4eover of S + and instead it #ed to the #oss of 's &5 #a4hs to 1r u#4it due to the cance##ation of the 1o3 to ta4e over the S+ . 8ence it covers that o((ression has been done b" the mana$ement on the minorit" under Section 3%7 of the *om(anies Act7 &%56.

MISMANA'EMENT If the affair of the com(an" are bein$ conducted in a manner (re0udicia# to the interest of the com(an" or (ub#ic interest 7 or that b" reason of an" chan$e in the mana$ement of contro# of the com(an"7 it is #i4e#" that the affairs of the com(an" -i## be conducted in that manner it is ca##ed mismana$ement. It usua##" occurs -hen the ma0orit" shareho#ders7 -ho contro# the o(eration7 cannot run (ro(er#"7 in an effective -a"7 the affairs of the com(an" and is not ab#e to (rotect the ri$hts of a shareho#der and maintain a sound viab#e environment. 6io#ation of the conditions of the com(an"Gs memorandum b" those -ho are in char$e of com(an"Gs mana$ement ma" amount to mismana$ement.! In the (resent case7 1r. Ashish ;umar -as in char$e of the com(an". 8e -as res(onsib#e for mana$in$ the affairs of the com(an" and he a#so (resided over the meetin$s. Since he -as in char$e of the com(an" he too4 a ver" ma0or decision affectin$ the (ersona# funds of one of the shareho#der and cance##ed the 1o3. 8e did not even inform the shareho#ders about the meetin$ and the (etitioner $ot to 4no- about the meetin$ informa##". As he -as in char$e of the com(an"7 the (o-ers -ere in his hand to ta4e ma0or decisions affectin$ the mana$ement of the com(an". :ven thou$h the (etitioner did not (a" the subscri(tion (rice for the shares7 he cannot be exc#uded from mana$ement.

S.1. 'ama4rishna 'ao v5s )an$#ore 'ace *#ub +td. =&%7E> 4E *om *ases 674 =1"s>

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CORPORATE MOOT 2013-2014 In a c#ose#" he#d com(an" formed u(on the understandin$ that there sha## be eFua# (artici(ation in mana$ement and in fact mana$ement -as shared b" a## $rou(s for a #on$ time. .here arose a #e$itimate ex(ectation in shareho#din$ $rou( for inc#usion in mana$ement. For such a case exc#usion from mana$ement -ou#d amount to o((ression. In such a case the *ourt =*+)5.ribuna# =<*+.>> can $rant re#ief in a((ro(riate manner.% 9hen 1r Ashish ;unar cance##ed the 1o3 bet-een the com(an" and S + he did not inform 1r u#4it about the same. 1r u#4it had made enou$h efforts so that the dea# cou#d ta4e (+ace -hich -as for the benefit of the com(an". 1r u#4it had a#so invested &5 +ac 's from his (ersona# accounts -hich a#so reached a dead end. .his conc#udes the there -as a#so mismana$ement on the (art of the com(an" as (er Section 3%7 of the *om(anies Act7 &%56. 2% WHETHER THE ACTIONS OF THE DIRECTORS WERE PREJUDICED TO THE INTEREST OF THE PETITONER( In =!!1l! (31/s2r0!s ((310a) L21 7;s =!!1l! (31/s2r0!s =!>!' ((310a) Hol103?s L21 1# .he S* has observed that B.he true (osition is that an iso#ated act7 -hich is contrar" to #a-7 ma" not necessari#" and b" itse#f su((ort the inference that the #a- has vio#ated -ith a ma#a fide intention or that such vio#ation -as burdensome7 harsh and -ron$fu#. )ut a series of i##e$a# acts fo##o-in$ u(on one another can7 in the context7 #ead 0ustifiab#" to the conc#usion that the" are a (art of the same transaction7 of -hich the ob0ection is to cause or commit the o((ression of (ersons a$ainst -hom these acts are directed.C 1r. Ashish ;umar had done a series of acts -hich #ed to o((ression and mismana$ement. 8e did not serve a (ro(er notice to the members of the com(an" -hich -as c#ear#" vio#ative of the (rovisions of *om(anies Act. Accordin$ to *om(anies Act &%567 ever" member shou#d $et a notice -hen a decision is to be ta4en re$ardin$ ta4e over7 ama#$amation and other mer$ers and acFuisitions. 8ere7 1r Ashish cance##ed the si$ned 1o3 bet-een the com(an" and S + and 1r u#4it -as una-are about an" such activit" $oin$ in the com(an". 2n the other hand7 1r. u#4it had com(#eted the ban4 forma#ities b" (a"in$ the ban4 's 5 +ac cash and 's &E +ac to S + from his (ersona# funds.

10

Ja$0it Sin$h *ha-#a v5s .irath 'am Ahu0a +td.7 =DEE4> &&% *om(. *as. 3!5 =*+)> AI' &%!& S* &D%!

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CORPORATE MOOT 2013-2014 1r Ashish ;umar had si$ned the 1o3 dated D3 rd A(ri#7 DE&3 and he -as c#ear#" a-are about the ta4in$ over of S +. .he term #oan (rovided b" S)I -as on the basis of 1o3 -hich -as si$ned bet-een the com(an" and the S +7 vio#ation of such a c#ause -as vio#ation of 1o3. 1o3 is made in com(#iance of 12A of the com(an". Such actions of 1r Ashish ;umar over ride the 12A. For ouster from the 1ana$ement the (etitioner has to sho- that he had a #e$itimate ex(ectation to be consu#ted over the affairs of the com(an" and that his exc#usion from the mana$ement -ou#d de(ress the va#ue of its investments.&& 1r u#4it has invested &5 +ac 's from his (ersona# accounts so that the dea# -ith S + cou#d ta4e (#ace. 8e a#-a"s had a bona fide intension -henever it came to the matters of com(an". 1r u#4it -as una-are about the acts of 1r Ashish and his exc#usion from the decision of cance##ation of 1o3 -as vio#ative. 8e had a#-a"s (#a"ed a ma0or ro#e in com(an"Gs functionin$ and thus his o(inion -as essentia# for ta4in$ such a decision. 8e had a#so invested &5 +ac 's from his (ersona# funds and therefore he a#-a"s had a bona fide intention -ith res(ect to affairs of the com(an". .he Fuestion sometimes arises as to -hether an action in contravention of #a- is (er se o((ressive. It is said7 as -as done b" one of us7 <.8. )ha$-ati J. in a decision of the /u0arat 8i$h *ourt in S.&. *a3pa2ram 7. Sa'a80 -/@0l!! Co22o3 . -/2! &0lls Co.&D7 that Ia reso#ution (assed b" the directors ma" be (erfect#" #e$a# and "et o((ressive7 and converse#" a reso#ution -hich is in contravention of the #a- ma" be shareho#ders and the com(an"I. <either the 0ud$ment of )ha$-ati J. nor the observations in El1!r4s Cas!&3 are ca(ab#e of the construction that ever" i##e$a#it" is (er se o((ressive or that the i##e$a#it" of an action does not bear u(on its o((ressiveness. .here must be continuous acts on the (art of the ma0orit" shareho#ders7 continuin$ u( to the date of (etition7 sho-in$ that the affairs of the com(an" -ere bein$ conducted in a manner o((ressive to some (art of the members. .he conduct must be burdensome7 harsh and -ron$fu# and mere +ac4 of confidence bet-een the ma0orit" shareho#ders and the minorit"
11

in

the

interests

of

the

'e7 :#$indata +td. =<o &>7 =&%%&> )*+* %5% =*h.>J 'e7 +ondon Schoo# of :#ectronics +td7 =&%!5> )*+* D73 =*h.> 12 =&%64> 2 /+' !E4 13 Su(ra 3

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CORPORATE MOOT 2013-2014 shareho#ders -ou#d not be enou$h un#ess the +ac4 of confidence s(rin$s from o((ression of a minorit" b" a ma0orit" in the mana$ement of the com(an"Hs affairs7 and such o((ression must invo#ve at #east an e#ement of +ac4 of (robit" of fair dea#in$ to a member in the matter of his (ro(rietar" ri$hts as a shareho#der. It is in the #i$ht of these (rinci(#es that -e have to consider the facts.....-ith reference to section 3%7I. In =a3alala Aa7!r a31 a3o2%!r 7. Bom@a' L05! Ass/r33 ! Co. L2114.7 Aas J.7 in his se(arate but concurrin$ 0ud$ment deduced the fo##o-in$ (rinci(#e on the basis of the :n$#ish decisions, IIt is -e## estab#ished that directors of a com(an" are in a fiduciar" (osition 70s+B+70s the com(an" and must exercise their (o-er for the benefit of the com(an". If the (o-er to issue further shares is exercised b" the directors not for the benefit of the com(an" but sim(#" and so#e#" for their (ersona# a$$randisement and to the detriment of the com(an"7 the *ourt -i## interfere and (revent the directors from doin$ so. .he ver" basis of the *ourtHs interference in such a case is the existence of the re#ationshi( of a trustee and of !s2/0 C/! trust as bet-een the directors and the com(an"I. 9here there is no (roof of des(atch of notice and there -as (roof that items other than those mentioned in the notice -ere ta4en u( and (assed at the meetin$7 these acts -ere he#d to be insufficient to 0ustif" an a((#ication for (revention of o((ression and mismana$ement.&5 9here the chairman -ithdre- a s(ecia# reso#ution -hich -as introduced at an extraordinar" $enera# meetin$ and he did so -ithout ta4in$ members into confidence7 the *+) said that it -as an o((ressive conduct. It denied the members to ex(ress their o(inion on a matter (ut before them.&6 A com(osite (etition under both Sec 3%7 and 3%! ma" be fi#ed (rovided the re#iefs c#aimed are not conf#ictin$.&7 1r Ashish had 4e(t the meetin$ for cance##ation of 1o3 and 1r u#4it -as una-are about it. 8e did not even receive an" notice re$ardin$ the same. 8e had a#-a"s made such decisions -hich are for the -e#fare of the com(an" that is -h" even -hen 1r Ashish -as

14 15

=&%5E> S*' 3%E73%4 a#a4 ;umar 1onda# v5s *ine ? Su((#" *or(n. ? +td =DEED> 35 S*+ 6E3 =*+)-Ae#- )> 16 I; Securities vt +td v5s 3nited 9estern )an4 . +td =DEE&> 4 *om( +J !& 17 Sorab Ains0ai Aastur v5s A. .'. *assad7 =&%63> 33 *om cases 3E6

2MEMORIAL ON THE BEHAL3 O3 PETITIONER2 15 | P a g e

CORPORATE MOOT 2013-2014 tr"in$ to scutt#e the (ro(osed ta4eover he made efforts for additiona# directors so that the com(an" doesnGt #oses the o((ortunit" to $ro-. RESOLUTION MAY BE STRUC6 DOWN IF OPPRSSIVEIn exercisin$ 0urisdiction under Sec 3%7 and 3%!7 the *ourt =*+)5.ribuna#> ma" stri4e do-n a 'eso#ution of the )oard of Airectors thou$h #e$a# if it is o((ressive to the minorit" shareho#ders and (re0udicia# to the interests of the com(an". .he notice convenin$ the )oard 1eetin$ is reFuired to be sent to a## the Airectors. .-ent"-one da"s c#ear notice has to be $iven to convene a /enera# 1eetin$. A notice convenin$ a meetin$ in vio#ation of the mandator" (rovisions of Sec &7& of the *om(anies Act7 &%56 curtai#in$ the (eriod of notice -ou#d be inva#id.&! .he reso#ution (asses b" 1r Ashish ;umar is o((ressive in nature as it is (re0udicia# to the interests of the com(an". 1r u#4it Jain -anted the benefit of the com(an" that is -h" he a#so made efforts for additiona# directors to fu#fi# the reFuirements of S)I. PRAYER Whereof in the light of the issues raised, arguments advanced and authorities cited above, it is humbly prayed that this Tribunal may graciously be pleased:

To declare that the resolutions passed by the board on December 9, 2013 were null and void and were passed in the abuse of power and in oppression of the minority shareholders and the said resolutions be set aside.

To give directions to the an! to return the money paid by the petitioner.

To pass orders for investigation into the conduct of the affairs of the company and suitable directions be made with a view to regulating affairs of the company in future.

18

*o#. ;u#dee( Sin$h Ahi##om v5s ara$aon 3ti#it" Financers '. +td.7 =&%!!> 64 *om(. *as. &% = ?8>

2MEMORIAL ON THE BEHAL3 O3 PETITIONER2 16 | P a g e

CORPORATE MOOT 2013-2014

To pass any such further order/(s) as it may deem fit and proper in the facts and circumstances of the case and in the interest of "ustice. #$D %&' T()* #+T &% ,)$D$-** &% .&/' 0&'D*()1*, THE PETITIONER *(#00 #* )$ D/T. &/$D -2-' 1'#.. All of which is respectfully submitted

Sd/- ______________________ Counsels for Petitioner Place: Company Law Tri unal! "#me$a a$%

2MEMORIAL ON THE BEHAL3 O3 PETITIONER2 17 | P a g e