9 Corporate Law Case Brief - Bennett Coleman vs Union of India - Notes For Free PDF

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19/06/2020

Corporate Law Case Brief - Bennett Coleman vs Union of India - Notes For Free

JANUARY 24, 2018 BY ADMIN

Corporate Law Case Brief – Bennett Coleman vs Union of India Spread the love

You can grab other case briefs on Corporate law from here. Facts: The appeals have been preferred by respondent 1 i.e. the company (represented by its shareholders) and respondent 8 and 10 in their capacity as the directors of the company; challenging the judgment and order passed on August 28, 1969 wherein the judge directed reconstitution of the board of directors for the said company in the manner done for seven years. This order has been challenged on certain grounds via appeal. Issues: Whether the appeal can be held to be maintainable? Reasoning & Analysis: It was contended that appellants had lost right to appeal on ground that it had submitted to Orders of Court. The order of the court specically meant that they would make such orders t as it thought based on the circumstances of the case and that no party would have any right of appeal against such order. Thus, the court dwelled into determining whether the right to appeal is lost to the party by laying down a test for the same which stated that the correct test for judging whether the right to appeal be lost is to ascertain what procedure the original court had followed because of the agreement. Should because notesforfree.com/2018/01/24/corporate-law-case-brief-bennett-coleman-vs-union-india/

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19/06/2020

Corporate Law Case Brief - Bennett Coleman vs Union of India - Notes For Free

of the agreement the procedure for reaching the decision be fundamentally different to that usually followed by courts, the right of appeal would be lost. The appellants challenged the reconstitution of the board of directors contending that it contravened provisions of Section 255 (Appointment of directors and proportion of those who are to retire by rotation) of the Companies Act of 1956. The order of the judge had immuned 2/3rd of directors from retiring by rotation and further the board had xed a period of seven years thus depriving the shareholders of the company a right in the management of the affairs of the company. The appellants contended that by appointing three directors by the Government was in violation of Section 408 (Powers of Company Law Board on application under sections 397 or 398) of the Companies Act of 1956 stating that the court was not entitled to frame a new article 95 contravening Section 255 which the judge by amendment modied article 95 of the articles of association to provide that at each general meeting, the directors elected by the shareholders would retire from ofce and there is no provision made for retirement by rotation in regard to the remaining directors. To answer the above contentions, the court distinguishes between the powers of the Government and the powers of the court by looking at Sections 408 and 402 of the Companies Act of 1956 by stating that while dealing with the prevention of oppression and mismanagement; some limitation has been set on the Government’s powers however no limitations or restrictions have been set on the court’s powers (Section 402 of the Companies Act of 1956) that may be required by the court to act upon for bringing about an end to the oppression and management complained of and to prevent any further oppression or mismanagement in the future. Under Section 397 read with Section 402 of the Companies Act of 1956, power has been conferred on the court to make such orders as it thinks t. This the court would judicially exercise with the objective of preventing the affairs of the company from being conducted in a way that may be prejudicial to public interest. Sections 397 and 398 (Application to Company Law Board for relief in cases of oppression & mismanagement respectively) of the Companies Act of 1956 are intended to avoid the winding up of the company and to keep it going while at the same time providing relief to the minority shareholders of the company from acts of oppression and mismanagement and this the court can only do so by interfering with the normal corporate management of the company. Held: While acting under Section 398 and Section 402 of the Companies Act of 1956, the court has ample jurisdiction and very wide powers to pass such orders and give directions as it thinks t to achieve the object and the same will not be violative of Section 255. notesforfree.com/2018/01/24/corporate-law-case-brief-bennett-coleman-vs-union-india/

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