SEBI AND CORPORATE LAWS
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Vol.
81, Part 1, for the week of January 7 – January 13, 2007 |
CONTENTS
circular/press note
sebi
- Introduction of Mini-derivative
(Futures and Options) Contract on Index (Sensex and Nifty) - circular no. dnpd/cir-33/2007, dated 27-12-2007
- Amendments to Equity Listing
Agreement - circular
no. cfd/dil/la/4/2007/27/12, dated 27-12-2007
- Change in Affiliation of
Sub-brokers - circular
no. mirsd-dr 1/mk/cir-15/111600/07, dated 20-12-2007
- Establishment of Connectivity
with both Depositories NSDL and CDSL - Companies eligible for shifting from
Trade for Trade Segment (TFTS) to Rolling Segment - circular no.
mrd/dop/se/cir-16/2007, dated 24-12-2007
rules/regulations
prevention of money laundering act
- Prevention of Money Laundering
(Appointment and Conditions of Service of Chair-person and Members of Appellate
Tribunal) Rules, 2007 - notification no. g.s.r. 519(e), dated 1-8-2007
- Prevention of Money Laundering
(Appointment and Conditions of Service of Chair-person and Members of
Adjudicating Authorities) Rules, 2007 - notification no. g.s.r. 520(e), dated 1-8-2007
SEBI
- Securities and Exchange Board
of India (Foreign Institutional Investors) (Second Amendment) Regulations, 2007
- Amendment in regulation 15 - NOTIFICATION F. No. 11/LC/GM/2007/31/12/2007, DATED
31-12-2007
reports
table of cases
Dolphin Investment (P.) Ltd. v. C. Pinto Trade Commerce (P.) Ltd.
(Bom.)
Kiran (K.R.) v. Vidya Pracharanam (P.) Ltd. (CLB - Chennai)
Muniswamappa Sonnegowda (P.) v. Mysore Lighting Works (P.) Ltd.
(CLB - Chennai)
Narendra Kumar Jain v. Ahimsa Mines and Minerals Ltd. (CLB - New
Delhi)
Peerless General Finance & Investment Co. Ltd. v. Poddar
Projects Ltd. (Cal.)
Polymermann (Asia) (P.) Ltd. v. Union of India (Bom.)
Thimme Gowda (M.) v. SPR Sugars (P.) Ltd. (CLB - Chennai)
subject index
Companies Act, 1956
Company Law Board
Enforcement of orders of
- Original authorized capital of
company consisted of 200 equity shares, which got subsequently enhanced to
1,200 equity shares - Paid-up capital before enhancement of capital accounted
for 162 shares and remaining 38 shares were not admittedly issued - CLB, by an
order, had directed company to issue shares in favour of petitioner Nos. 1 to 4
from and out of its unissued enhanced share capital in proportion to their
existing shareholding in accordance with principles approved by board of
directors - In compliance with said order, company allotted 110 shares to
petitioner Nos. 1 and 2 but no share was allotted to petitioner Nos. 3 and 4
(applicants herein) - On application filed by applicants under section 634A,
company contended that share capital was enhanced by 1,000 shares, out of
which, 110 shares alone remained unissued and in view of issuance of entire 110
unissued shares in favour of petitioner Nos. 1 and 2, company could not allot
any further shares to applicants - Whether when paid-up capital of company,
after issuance of 1,000 shares, accounted for 1,162 shares as against
authorized capital at 1,200 shares, thus, leaving 38 shares as unissued, plea
of company that there were no unissued shares for issuance in favour of
applicants, could be sustained - Held, no - Whether company was to be
directed to issue shares to applicants out of unissued 38 shares in ratio and
at price approved by board of directors - Held, yes - K.R. Kiran v.
Vidya Pracharanam (P.) Ltd. (CLB - Chennai)
Meetings and proceedings
Length of notice for calling meeting
- Whether requirement of giving
not less than twenty one days notice under section 171 is inapplicable to
private limited companies - Held, yes - P. Muniswamappa Sonnegowda v.
Mysore Lighting Works (P.) Ltd. (CLB - Chennai)
Oppression and mismanagement
- Petitioners filed petition
under section 397/398, alleging that company and its promo-ters did not comply
with MOU, in terms of which, petitioners were to get fifty per cent shares and
equal participation in financial management, and had mismanaged affairs of
company to detriment of petitioners and other shareholders - Petitioners
contended that loan advanced by them was siphoned off by respondents in
complete disregard to purpose for which it was advanced; that share
certificates were not endorsed despite handing over shares to company secretary
of company for endorsement; that company had closed bank account and changed
its registered office without any intimation or notice to them and without
following proper procedure - However, petitioners had failed to prove their
case and facts and circumstances of case revealed that respondents had
acquiesced to terms of MOU, and petitioners themselves had not endeavoured to
get it implemented in de facto; that they had not brought in required
funds, and by their conduct had acted contrary to interest of company -
Whether, on facts, equity was in favour of respondents as it were they who had
been nurturing company even while facing brunt of various cases against them
and it was conduct of petitioners which had been prejudicial to interest of
functioning of company - Held, yes - Whether since no act of oppression
or mismanagement in affairs of company could be established by petitioners,
petition filed by them was to be dismissed - Held, yes - Narendra
Kumar Jain v. Ahimsa Mines and Minerals Ltd. (CLB - New Delhi)
- Whether where entire grievances
and reliefs claimed by petitioners were found flowing from share purchase
agreement entered into between petitioners and respondents, no application
would lie before CLB under section 397/398 for any remedial measure - Held,
yes - Whether isolated grievance of petitioner that respondent No. 2 was
convening extraordinary general meeting of shareholders of company for
amendment of articles was enough for
claiming any relief under section 397 - Held, no - M. Thimme Gowda v.
SPR Sugars (P.) Ltd. (CLB - Chennai)
- Whether if directors of a
company exercise their power to issue further shares not for benefit of
company, but simply and solely for their personal aggrandizement and to
detriment of company, CLB will interfere and prevent them from doing so - Held,
yes - Whether if a member is deprived of his privilege and right, it will be
undoubtedly harsh, burdensome and wrongful and will necessarily be an act of
oppression to member concerned - Held, yes - Whether further issuance of
shares, which resulted in conversion of petitioners into minority, was nothing
but an act of oppression and, therefore, was liable to be set aside - Held,
yes - P. Muniswamappa Sonnegowda v. Mysore Lighting Works (P.) Ltd. (CLB
- Chennai)
- Whether petitioner having participated
in annual general meeting could challenge
minutes of meeting as invalid and unenforceable - Held, no -
Whether grievances arising out of contractual obligations between respective
contesting parties can be agitated in a section 397/398 proceeding - Held,
no - Whether mere non-filing of statutory returns would attract provisions of
section 397 - Held, no - P. Muniswamappa Sonnegowda v. Mysore
Lighting Works (P.) Ltd. (CLB - Chennai)
Share certificate
Limitation of time for issue of
- Whether right to get share
certificates within three months of allotment is an irrevocable right vested in
every allottee of shares and is enforceable through an order of CLB under
section 113(3) - Held, yes - P. Muniswamappa Sonnegowda v. Mysore
Lighting Works (P.) Ltd. (CLB - Chennai)
Transfer of shares
Power to refuse registration and appeal against
refusal
- Whether shares of public
companies are freely transferable between transferor and transferee and company
has nothing to do with same in case by virtue of sanction of scheme by Court,
certain shares are transferred from transferor-company to transferee-company;
in such a case, company is only obliged to record such rectification once
shares are lodged with it by person who is lawful person to do so - Held,
yes - Whether, in such a case, documentation contemplated in section 108 is
required to be done - Held, no - Whether once order of sanction is
passed by Court and same is indicated to company by way of application, company
should not refuse registration on plea of limitation - Held, yes - Peerless
General Finance & Investment Co. Ltd. v. Poddar Projects Ltd. (Cal.)
Rectification of register on
- Whether in terms of section
111A, in case of refusal of company to register transfer without sufficient
cause, transferee has to wait for two months to approach CLB; however, such two
months period is not an outer limit contemplated in said section - Held,
yes - Peerless General Finance & Investment Co. Ltd. v. Poddar
Projects Ltd. (Cal.)
Winding up
Circumstances in which a company may be wound
up
- In terms of an agreement,
petitioner advanced certain amount to respondent-company ‘S’ - ‘P’ respondent-company and one ‘R’ stood as
first and second guarantors - ‘S’ defaulted in repayment and petitioner issued
notices to all respondents - Since no repayment was made, petitioner filed
petitions under section 433(e) against
‘S’ and ‘P’ - During pendency of petitions, parties went for arbitration
and in terms of an award, ‘P’ and ‘R’ agreed jointly to pay certain amount to
petitioner - However, thereafter no payment was made, rather respondents
challenged maintainability of petitions on grounds that petitioner’s debt was
contingent and disputed, and that respondents were required to be given fresh
notice in terms of section 434, since under arbitral award, cause of action had
changed as well as liabilities inter se amongst respondents had also
changed - Whether since petitioner had called upon ‘S’ and ‘P’ and both had
failed to make payment due to petitioner under agreement, it could be said that
petitioner was a contingent creditor and there was any contingency to be met - Held,
no - Whether, on facts, parties went for arbitration due to differences between
respondents inter se and there was no dispute at all as regards
liability of respondents towards petitioner in terms of agreement in question -
Held, yes - Whether since notice was given to both respondents, it was
certainly not expected from petitioner to have given a fresh notice, after
award was filed and winding up petitions could not be dismissed on that ground
- Held, yes - Whether therefore, winding up petitions were to be
admitted - Held, yes - Dolphin Investment (P.) Ltd. v. C.
Pinto Trade Commerce (P.) Ltd. (Bom.)
Companies Act, 1956
- Section 111
- Section 111A
- Section 113
- Section 171
- Section 397
- Section 433
- Section 634A
Sick Industrial Companies (Special Provisions) Act, 1985
Suspension of legal proceedings, contracts, etc.
- Whether amount of dues of
central excise duty, collected by a company from its customers subsequent to
date of registration of its reference with BIFR, cannot be intended to be
within sweep of section 22, as that amount of duty in hands of company belongs
to revenue - Held, yes - Polymermann (Asia) (P.) Ltd. v. Union
of India (Bom.)
Sick Industrial Companies (Special Provisions) Act, 1985
- Section 22
MAGAZINE
features
companies act
l.v.v. iyer
- Your queries
corporate laws
Ankur sood and vardaan ahluwalia
- Corporate Criminal Liability :
A post Standard Chartered Bank’s case analysis
m. srinivas
- Industrial sickness in India