BUSINESS LAW ASSIGNMENT

Ujwala N Jagdale and Ors vs Jagdale Industries

Akash Gupta
BJ22112
Section C

Question 1: What were the main points of dispute between the parties?

Answer 1:
The 2 petitioners, petitioners 1 is the sister of the two respondents – Sri Rajesh Jagdale & Sri
Jayesh Jagdale, and the 2nd petitioner is the husband of the first petitioner, both of whom have
filed complaints against the two respondents mainly alleging acts of oppression and
mismanagement.
The petitioners state that upon the death of the father (late Shri R. Nagaraja Rao), the shares of
the company were distributed between petitioner 1 and respondents 2 and 3 (the three brothers
and sisters). However, when the mother transferred her shared to petitioner 1, the respondents
2 and 3 acted out of jealousy and performed oppressive acts i.e. removed her from the position
of the director of the company.
On the other hand, the respondents 2 & 3 are contending that they followed the full procedure
as per the companies act to remove the petitioners and respondent 6 (mother) as directors of
the company.

Question 2: Cite relevant portions of statutes determining the cause of action?

Answer 2:
Section 241 of the Companies Act, 2013: Section 241 states that an application to the Tribunal
for relief in cases of oppression, etc can be made. Any member of the company can file an
application under section 241 subject to fulfilling the requirement under section 244. The
complaint can be made when the company affairs have been conducted in a manner prejudicial
to the public interest or against the company’s interests, or oppressive to a particular member or
other members of the company.

Section 169 of the Companies Act, 2013 : As per Section 169 of the Companies Act, 2013, a
company may, by ordinary resolution, remove a director, not being a director appointed by the
Tribunal under section 242, before the expiry of the period of his office after giving him a
reasonable opportunity of being heard.

Question 3: What precedents were cited by the parties before the Court?

Answer 3:
- MANU/SC/0050/1981 – As per the decisions taken during this case, it has helped in
defining what is termed as oppression. Oppression is made out where the conduct is harsh,
burdensome or wrong. Whenever the action is against the probity and good conduct, it will
be considered as oppression.
- MANU/SC/7193/2008 : 2008(3) SCC 363 - In case the conduct is mala fide and for a
collateral purpose with ultimate objective in favour of the company, the immediate purpose
resulting in advantage to some shareholders. If the act is against probity, good conduct or
burdensome, harsh or wrong, it amounts to oppression.
The counsel for petitioners cited the following decisions:
(i) Decision of Hon'ble Apex Court reported in MANU/SC/0050/1981: AIR 1981 SC 1298
(ii) Decision of Hon'ble Apex Court reported in MANU/SC/7193/2008: (2008) 3 SCC 363

The counsel of the respondents cited the following decisions:

(i) Decision of Hon'ble Apex Court reported in MANU/SC/0368/1965: AIR 1965 SC 1535
(ii) Decision of Hon'ble Madras High Court reported in 1985 SCC Online Mad 151: (1987) 61
 Comp Cas 20
(iii) Decision of Hon'ble Madras High Court reported in MANU/TN/0596/2004: 2004 (3) CTC348
(iv) Decision of Hon'ble High Court of Karnataka reported in (1975) 2 Kant LJ428
(v) Decision of Hon'ble High Court of Karnataka reported in (2002) 110 Comp Cas 371
(vi) Decision of Hon'ble Apex Court reported in MANU/SC/0015/1985: (1986) 1 SCC 264
(vii) Comments of Buckley on the Companies Act, 14th Edition on Section 210 of the English
companies Act, 1948
(viii) Decision reported in (1966) 1 W.L.R. 745

Question 4: What was the final judgement?

Answer 4:
The final judgement was that the decision to remove respondent 6 (mother of respondents 2 and
3 and petitioner 1) was against probity, good conduct, harsh and wrong anf therefore, in opinion
of the judges it was an act of oppression and the decision needs to be changed by allowing the
the position of the petitioners and respondent no. 6 to status quo ante (as directors of the
company)

Question 5: What was your takeaway from the case?

Answer 5:
My takeaways from the case were:

In case of a closely held company among the family members, it is deemed that every
member of the family has a right to participate in the management of the company. It is
very much similar to running the company like a partnership firm.