Compiled By: Pankaj Garg

Chapter 6 – Prevention of Oppression and Mismanagement ©www.altclasses.
in
Compiled by: Pankaj Garg

Page 1
Chapter 6 – Prevention of Oppression and Mismanagement ©www.altclasses.in
Chapter – 6
Prevention of Oppression & Mismanagement
"Marks Distribution of Past Exams (New Syllabus)"

4.5
4
3.5
3
Marks
2.5
2
1.5
1
0.5
0
May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21 -
Series1 0 3 4 0
Scanner of Past Exam Questions – New Syllabus
Attempt Q. Topic Suggested Answer / Marks

No. Hints
May 18 No Question asked 0
Nov. 18 3(a) Practical Illustration on Section Refer Answer of Q. 3

244 No. 9
May 19* 2(a) Practical Illustration on Section Refer Answer of Q. 4

244 No. 10
Nov. 19* No Question asked 0
*From May 19 Exam, marks are covered only for descriptive part of the paper as MCQ
paper was not issued in public domain by ICAI.

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Application to Tribunal for relief in cases of Oppression, etc. (Sec. 241)
Q.1 State the conditions which must be satisfied before filing an application
for the prevention of oppression.
Answer: Conditions to be satisfied before filing an application for

prevention of oppression:
The conditions which are required to be satisfied before filing an

application for the prevention of oppression can be enumerated as
follows:
(i) Required number of members: As per Sec. 244 of Companies

Act, 2013, in the case of a company having a share capital, not
less than 100 members of the company or not less than 1/10th
of the total number of its members, whichever is less, or any
member or members holding not less than 1/10th of the issued
share capital of the company, subject to the condition that the
applicant or applicants has or have paid all calls and other
sums due on his or their shares, shall have the right to apply
u/s 241.
In case of a company not having share capital, atleast 1/5th of
the total number of its members can apply for relief.
(ii) Complaints against which application may be made by
members to Tribunal:
Any member of a company may apply to Tribunal, if he
complains that -
(a) the affairs of the company have been or are being
conducted in a manner prejudicial to public interest or
prejudicial or oppressive to him or any other member or

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members or prejudicial to the interests of the company; or

(b) the material change has taken place in the management or
control of the company, whether by an alteration in the
Board of Directors, or manager, or in the ownership of the
company’s shares, or if it has no share capital, in its
membership, or in any other manner whatsoever, and that
by reason of such change, it is likely that the affairs of the
company will be conducted in a manner prejudicial to its
interests or its members or any class of members.
Q.2 The profits of ABC Limited for the financial year 2017-2018 fell
considerably due to recession. The Board of directors of the company,
therefore, bonafide did not recommend any dividend for the year. At the
Annual General Meeting of the company, a group of members objected
to the Board's decision and wanted the Board to make recommendation
for dividend.
On refusal by the Board, the members, who feel oppressed by the

Board's decision to skip the dividend, move to the Tribunal and
complain against the Board on the ground of oppression and
mismanagement.
Examining the provisions of the Companies Act, 2013, decide:
(a) Whether the members contention shall be tenable?

(b) Whether the act of Board of Directors not to recommend any
dividend shall amount to oppression and mismanagement?
Answer: Oppression and Mismanagement:
• Terms Oppression and Mismanagement has not been defined

under the Company law.

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• Oppression involves an element of lack of fair dealing to the

member of his propriety rights as shareholder.
• Oppression does not include mere domestic disputes between
directors and members, or lack of confidence between one set of
members and others.
• Bona fide decisions consistent with the company’s
memorandum and articles are not to be equated with
mismanagement even if they turn out to be wrong in the
circumstances or these cause temporary losses.
• Directors’ bonafide decision not to declare dividend and to
accumulate available profits into reserves is not
mismanagement. (Thomas Vettom (V.J.) vs. Kuttanad Rubber Co.
Ltd.)
• In the present case, due to fall in profits, Board of directors of
the company, did not recommend any dividend for the year. At
the AGM of the company, a group of members objected to the
Board's decision and wanted the Board to make
recommendation for dividend. On refusal by the Board, the
members, who feel oppressed by the Board's decision to skip
the dividend, move to the Company Law Board and complain
against the Board on the ground of oppression and
mismanagement.
Conclusion:
(a) Contention of members shall not be tenable.

(b) The act of the Board of directors who acted bona fide, not to
recommend any dividend shall not amount to oppression or
mismanagement.

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Q.3 A group of shareholders holding 20% of the issued share capital of DEF
Limited have filed a petition before the Tribunal alleging the following:
(i) Various acts of illegal, invalid and irregular transactions entered

into the name of the company.
(ii) Losses incurred due to mismanagement by the board of directors.
(iii) Non-declaration of dividend despite having sufficient profits in the
past years.
Examine the merits of the above petitions made under Section 241 of
the Companies Act, 2013 in the light of the judicial pronouncements
made in this regard. [May 17 (4 Marks)]
Answer: Oppression and Mismanagement:
• As per Sec. 244 of the Companies Act, 2013, in the case of a

company having a share capital, not less than 100 members of
the company or not less than 1/10th of the total number of its
members, whichever is less, or any member or members holding
not less than 1/10th of the issued share capital of the company,
subject to the condition that the applicant or applicants has or
have paid all calls and other sums due on his or their shares, shall
have the right to apply u/s 241.
• In the instant case, group holds 20% of the issued share capital,
hence, they are entitled to file a petition before the Tribunal u/s
241 of the Companies Act, 2013.
Validity of Grounds on which petition is being filed:
(i) Mere illegal, invalid or irregular transactions entered into in

the name of the company do not constitute a ground for
invoking the provisions of section 241 unless it is proved that

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they are oppressive to any shareholder or prejudicial to the

interest of the company or to the public interest. (Sheth
Mohanlal Ganpatram vs. Shri Sayaji Jubilee Cotton and Jute Mills
Company Ltd.)
(ii) Losses incurred due to mismanagement by the board of
directors, cannot, by itself, be regarded as oppression (Ashok
Betelnut Co. P. Ltd. vs. M.L. Chandrakanth).
(iii) Directors’ bona fide decision not to declare dividend and to
accumulate available profits into reserves is not
mismanagement. (Thomas Vettom (V.J.) vs. Kuttanad Rubber Co.
Ltd.).
Conclusion: Petition filed by the group of shareholders will fail

unless they can prove to the satisfaction of the Tribunal that the
acts complained of in the petition are oppressive and prejudicial to
the interest of the company and the public interest.
Right to apply u/s 241 (Sec. 244)
Q.4 What is meant by oppression’? State whether the aggrieved party

would succeed in obtaining relief from Tribunal on the ground of
oppression in the following cases:
(a) The majority of the Board of directors override the minority

directors and the minority directors apply to Tribunal
complaining oppression by majority directors.
(b) A petition by majority shareholders complaining oppression by
minority shareholders.
Give your answer according to the provisions of the Companies Act,

2013.

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Answer: Meaning of Oppression:
• Term Oppression has not been defined under the Company

law. Oppression involves an element of lack of fair dealing to
the member of his propriety rights as shareholder.
• Oppression does not include mere domestic disputes between

directors and members, or lack of confidence between one set
of members and others. It was observed in Rao (V.M.) vs.
Rajeshwari Ramakrishnan that the oppression complained off
must affect a person in his capacity as a member of the
company; harsh or unfair treatment in other capacity, e.g., as
a director or a creditor is outside the purview of this chapter.
• There must be a continuous act constituting oppression up to

the date of the petition. The events have to be considered not
in isolation but as a part of a continuous suffering.
(i) Oppression of a member as a director: Oppression

dealt with by Sec. 241 of the Companies Act, 2013, is only
oppression of members in their character as such. The
harsh treatment, for instance, of a member who is a
director or other officer or employee, by the Board of
directors or management does not come within Sec. 241.
Conclusion: The minority directors will not succeed in
getting relief from Tribunal on the ground of oppression.
(ii) Right not confined to minority: As per Sec. 244, the
right to apply for relief u/s 241/242 is given to 100
members or 1/10th of the total number of members or
any member or members holding not less than 1/10th of
the issued share capital of the company. There is nothing

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in this section which suggests even indirectly that unless

the application is made by minority shareholders it is not
maintainable. The right to apply is, therefore, not
confined to oppressed minority of the shareholders
alone.
Q.5 ABC Private Limited is a company in which there are eight

shareholders. Can a member holding less than one-tenth of the share
capital of the company apply to the Tribunal for relief against
oppression and mismanagement? Give your answer according to the
provisions of the Companies Act, 2013.
Answer: Members right to apply for relief against oppression and

mismanagement:
• As per Sec. 244 of Companies Act, 2013, in the case of a

members, whichever is less, or any member or members
holding not less than 1/10th of the issued share capital of the
company, subject to the condition that the applicant or
applicants has or have paid all calls and other sums due on his
or their shares, shall have the right to apply u/s 241.
• In the given case, there are eight shareholders. As per above

conditions, 10% of 8 i.e. 1 member can present a petition to
the Tribunal, regardless of the fact that he holds less than
1/10th of the company’s share capital.
Conclusion: A single member can apply for relief against

oppression and mismanagement.

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Q.6 The issued and paid up capital of MNC Limited is ₹5 crores consisting
of 5,00,000 equity shares of ₹100 each. The said company has 500
members. A petition was submitted before the Tribunal signed by 80
members holding 10,000 equity shares of the company for the
purpose of relief against oppression and mismanagement by the
majority shareholders.
Examining the provisions of the Companies Act, 2013, decide whether

the said petition is maintainable.
Also explain the impact on the maintainability of the above petition, if

subsequently 40 members, who had signed the petition, withdrew
their consent. [MTP-April 18, RTP-May 18, MTP-March 19]
Answer: Validity of Petition filed for relief against oppression and

mismanagement:

• In the present case, petition was signed by 80 members out of

500 members. Group of Applicant hold 10,000 shares out of
5,00,000 shares.
Conclusion: Petition made by 80 members meets the eligibility

criteria specified u/s 244 of the Companies Act, 2013 as group of
applicants consist of 80 members which is more than 1/10 th of
total 500 members. Therefore, the petition is maintainable.

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Impact of subsequent withdrawal of consent: It has been held

by the Supreme Court in Rajmundhry Electric Corporation vs.
V. Nageswar Rao, that if some of the consenting members have
subsequent to the presentation of the petition withdraw their
consent, it would not affect the right of the applicant to proceed
with the petition. Hence petition remains maintainable.
Q.7 A group of members of XYZ Limited has filed a petition before the
Tribunal alleging various acts of oppression and mismanagement by
the majority shareholders of the company. The Petitioner group
holds 12% of the issued share capital of the company. During the
pendency of the petition, some of the petitioner group holding about
5% of the issued share capital of the company wish to disassociate
themselves from the petition and they along with the other majority
shareholders have submitted before the Tribunal that the petition
may be dismissed on the ground of non- maintainability. Examine
their contention having regard to the provisions of the Companies
Act, 2013.
Answer: Dismissal of petition on grounds of non maintainability:
• As per Sec. 244 of Companies Act, 2013, in case of a company

having share capital, in the case of a company having a share
capital, not less than 100 members of the company or not less
than 1/10th of the total number of its members, whichever is
less, or any member or members holding not less than 1/10th
of the issued share capital of the company, subject to the
condition that the applicant or applicants has or have paid all
calls and other sums due on his or their shares, shall have the
right to apply u/s 241.

Page 11
• It has been held by the Supreme Court in Rajmundhry Electric

Corporation vs. V. Nageswar Rao, that if some of the
consenting members have subsequent to the presentation of
the petition withdraw their consent, it would not affect the
right of the applicant to proceed with the petition.
Conclusion: Petition is maintainable as it is signed by requisite

number of members. Subsequent withdrawal will not have any
impact.
Q.8 M/s DJ Limited, a listed company, as per the audited financial

statements as at March 31, 2018 is having issued and paid-up equity
share capital comprising of 10 lakhs share of Rs. 10 each and issued
and paid-up preference share capital of 5 lakhs share of Rs. 10 each
respectively. The members of the company after complying with the
provisions of Sec. 169 of the companies Act, 2013 removed one Mr.
Satish from the directorship of the company on 1st August 2018 before
the completion of his term of office. Mr. Satish is also one of the
members of the company holding 110000 fully paid-up equity shares.
Mr. Satish has alleged oppression on his removal and has moved the
jurisdictional Honorable National Company Law Tribunal (NCLT) u/s
241 read with Section 244 of the Companies Act, 2013. The Board of
Directors of the company is of the opinion that the application is not
maintainable as per the provisions of Section 244 of the Companies
Act, 2013 Decide.
Also, state if any other recourse that is available with Mr. Satish under
the provisions of the Companies Act, 2013.
[Nov. 18 - Old Syllabus (4 Marks), RTP-May 19]

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mismanagement:

• However, the Tribunal may, on an application made to it in

this behalf, waive all or any of the requirements specified
above so as to enable the members to apply under section
241.
• In the instant case, total issued share capital consists of 15

lakhs shares. The members of the company after complying
with the provisions of Sec. 169 of the companies Act, 2013
removed one Mr. Satish from the directorship of the company
on 1st August 2018 before the completion of his term of office.
Mr. Satish is also one of the members of the company holding
110000 fully paid-up equity shares. Mr. Satish has alleged
oppression on his removal and has moved the jurisdictional
Honorable NCLT u/s 241 read with Section 244 of the
Companies Act, 2013.

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• Share capital of Mr. Satish (1.1 Lakh Shares) is less than

1/10th of total issued share capital (15 Lakh Shares).
Conclusion: Petition is not maintainable as shares held by Mr.

Satish is less than 1/10th of issued share capital of the company.
However, as per proviso to section 244(1), Mr. Satish may make
an application to the Tribunal in this behalf for the waiver of the
above condition so that he may apply under section 241.
Q.9 MNC Private Ltd. is a Company in which there are six shareholders.
Mr. Srinath, who is a director and also the legal representative of a
deceased shareholder holding less than one tenth of the share capital
of the company made a petition to the Tribunal for relief against
oppression and mismanagement. Examine under the provisions of the
companies Act, 2013 whether the petition made by Mr. Srinath is
valid and maintainable? [Nov. 18 – New Syllabus (3 Marks)]

mismanagement:


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• In the present case, application is made by Mr. Srinath, who is

a director and also the legal representative of a deceased
shareholder holding less than one tenth of the share capital of
the company. There are six shareholders. As per above
conditions, 10% of 6 i.e. 1 member can present a petition to
the Tribunal, regardless of the fact that he holds less than
1/10th of the company’s share capital.
• It is also well settled principle that where a member dies and

his name being still in the register of members, his legal
representatives are entitled to make an application for
prevention of oppressional and mismanagement even if their
names are not yet entered in the register of members.
Conclusion: Petition made by Mr. Srinath is valid and

maintainable.
Q. 10 A group of shareholders consisting of 30 members decide to file a

petition before the Tribunal for relief against oppression and
mismanagement by the Board of Directors of M/s. Aravalli
Manufacturing Company Limited having a paid-up Share Capital of Rs.
1 crore. The company has a total of 500 members and the group of 30
members holds one-tenth of the total paid-up share capital
accounting for one-fifteenth of the issued share capital. The grievance
of the group is that due to the mismanagement by the Board of
Directors, the company is incurring losses and has not declared any
dividend for the past five years. In the light of the provisions of the
Companies Act, 2013, please advise the group of shareholders
regarding the admission of the petition and relief thereof.
[May 19 – New Syllabus (4 Marks)]

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mismanagement:

company having a share capital, not less than 100 members
of the company or not less than 1/10th of the total number of
its members, whichever is less, or any member or members
• In the present case, application is being sought by a group of

shareholders consisting of 30 members out of 500 members.
Group holds one–tenth of the total paid–up share capital
accounting for one-fifteenth of the issued share capital.
Conclusion: Since the group of shareholders do not number 100

or hold 1/10th of the issued share capital or constitute 1/10th of
the total number of members, they have no right to approach the
Tribunal for relief.
As regards obtaining relief from Tribunal, continuous losses

cannot, by itself, be regarded as oppression. Similarly, failure to
declare dividends or payment of low dividends also does not
amount to oppression. Thus, the shareholders may not succeed in
getting any relief from Tribunal.

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6.4 - Powers of Tribunal (Sec. 242)
Q. 11 ABC limited used the business resources of the company in favour of

the majority shareholders and completely excluded the minorities
from the affairs of the company. As of consequences, minority
members filed an application to Tribunal to look into the matter on
the regulation of conduct of affairs of the company in future. State in
the light of the Companies Act, 2013, the action to be taken by the
Tribunal in the given situation.
Answer: Action to be taken by Tribunal:
As per Sec. 242 of the Companies Act, 2013, on any application

made u/s 241, the Tribunal may, with a view to bring to an end the
matters complained of, make such order as it thinks fit, if it is of
the opinion:
(a) that the company’s affairs have been or are being conducted
in a manner
• prejudicial or oppressive to any member or members or
• prejudicial to public interest or
• prejudicial to the interests of the company;
and
(b) that to wind up the company would unfairly prejudice such

member or members, but that otherwise the facts would
justify the making of a winding-up order on the ground that it
was just and equitable that the company should be wound up.

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Interim Order: The Tribunal may, on the application of any party

to the proceeding, make any interim order which it thinks fit for
regulating the conduct of the company’s affairs upon such terms
and conditions as appear to it to be just and equitable.
Q. 12 Mr. B. Dutt is the Managing Director of Food Plaza Restaurants Private

Limited (FPRPL). FPRPL was incorporated in furtherance of a Joint
Venture Agreement (“JVA”) between Mr. B. Dutt and Jack India Pvt.
Limited (JIPL) in 2017, both having 50% of equal share in the said
company. FPRPL was to be governed by the terms and conditions set
out in its Memorandum of Association and its Articles of Association.
During the course, JIPL held the Board meeting, without giving prior
notice of such meeting to Mr. B. Dutt, took decision to remove Mr. B
Dutt with an allegation of mismanagement of fund in FPRPL. JIPL
pressurised him to sell his shares at Rs. 5 Crores, against Rs. 15 crore
which is much below the fair market price of Mr. B. Dutt shares.
Advise whether Mr. B. Dutt has right to claim any relief and would he
succeed in obtaining relief from Tribunal on the ground of oppression
by JIPL? [MTP-Aug. 18]
Answer: Member’s right to apply for relief against oppression and

mismanagement

company having a share capital, not less than 100 members
of the company or not less than 1/10th of the total number of
its members, whichever is less, or any member or members

Page 18
• In the instant case, Mr. Dutt is managing director and holding

50% equity shares of the company. Other Shareholder (JIPL)
held the Bpoard meeting, without giving prior notice of such
meeting to Mr. B. Dutt, took decision to remove Mr. B Dutt
with an allegation of mismanagement of fund in FPRPL. JIPL
pressurised Mr. B Dutt to sell his shares at Rs. 5 Crores,
against Rs. 15 crore which is much below the fair market
price of Mr. B. Dutt shares.
• The act of JIPL to remove Mr. B Dutt, a Managing director

from FPRPL and pressurizing him to sell his shares much
below the fair market price is an act of oppression. Mr. B Dutt
was not given prior notice of board meeting and no chance to
disprove the false allegations made against him.
Conclusion: Mr. B Dutt has right to apply to the Tribunal u/s

241.
Tribunal is well within its power u/s 242 to pass appropriate

orders as to reappointment of Mr. B Dutt as the Managing
director of the company and can also issue orders for the future
conduct of the company along with provision of just and
equitable relief to the applicant.

Page 19
Class Action (Sec. 245)
Q.13 M/s Sunshine Oils Limited, a listed company as at 31st March, 2018 as
per the audited financial statements is having 200 depositors with Rs.
50 Crores of deposit in the company. Out of the total 200 depositors 20
depositors of the company have formed a group and have appointed
Mr. Ram (a practicing advocate who is not one of the depositor) as
their representative to file an application in the National Company Law
Tribunal (NCLT) to bring a Class Action suit against the management
and conduct of affairs of the company are being conducted in a manner
which is prejudicial to the interest of the depositors being oppressive.
Will the application of Mr. Ram be admitted by the Honourable
Tribunal. Discuss with reference to the provisions of the Companies
Act, 2013? [May 18 – Old Syllabus (4 Marks)]
Answer: Validity of Application to bring a class action suit:
• Sec. 245(3) of the Companies Act, 2013 prescribes the

required number of members or depositors to apply for class
action suit. Accordingly, the requisite number of depositors to
file an application shall not be less than 100 depositors or not
less than such percentage of the total number of depositors as
may be prescribed, whichever is less. No such percentage is
being prescribed.
• The requisite number of depositor or depositors to file an
application u/s 245(1) shall be:
(a) 5% of the total number of depositors of the company; or
100 depositors of the company, whichever is less; or
(b) depositor or depositors to whom the company owes 5%
of total deposits of the company.

Page 20
• As per Sec. 432, a party to any proceeding or appeal before

the Tribunal or Appellate Tribunal as the case may be, may
appear in person or authorize one or more Chartered
Accountant or Company Secretaries or Cost Accountants or
legal practitioners or any other person to present his case
before the Tribunal or Appellate Tribunal as the case may be.
• Sec. 245(10) states that subject to the compliance of this
section, an application may be filed or any other action may
be taken under this section by any person, group of persons
or any association of persons representing the persons
affected by any act or omission.
• In the instant case, 20 depositors out of 200 depositors have
formed a group and have appointed Mr. Ram (a practising
Advocate who is not one of the depositors) as their
representative to bring a class action suit against the
management of the Company.
Conclusion: Application need to be admitted by the Tribunal as it

satisfies the eligibility criteria. Mr. Ram can file application on
behalf of depositors.
Q.14 A group of depositors in M/s. Bright Limited, a listed company,

appointed Mr. Fair, an advocate as a representative to file an
application in the National Company Law Tribunal (NCLT) on the
behalf of the depositors to bring a Class Action suit against the
management of the company as they are of the opinion that the
management and conduct of affairs of the company are being
conducted in a manner which is prejudicial to the interest of the
depositors being oppressive.

Page 21
Examine in the given situation, whether the appointment of Mr. Fair is

valid as regards to the filling of the application before the Tribunal in
the light to the provisions of the Companies Act, 2013? [RTP-Nov. 18]
Answer: Validity of Application to bring a class action suit:
• Sec. 245(3) of the Companies Act, 2013 prescribes the required

number of members or depositors to apply for class action suit.
Accordingly, the requisite number of depositors to file an
application shall not be less than 100 depositors or not less
than such percentage of the total number of depositors as may
be prescribed, whichever is less. No such percentage is being
prescribed.
• As per Sec. 432, a party to any proceeding or appeal before the
Tribunal or Appellate Tribunal as the case may be, may appear
in person or authorize one or more Chartered Accountant or
Company Secretaries or Cost Accountants or legal practitioners
or any other person to present his case before the Tribunal or
Appellate Tribunal as the case may be.
• Sec. 245(10) states that subject to the compliance of this
section, an application may be filed or any other action may be
taken under this section by any person, group of persons or
any association of persons representing the persons affected
by any act or omission.
• In the instant case, a group of depositors appointed Mr. Fair an
Advocate as their representative to bring a class action suit
against the management of the Company.

Page 22
Conclusion: Appointment of Mr. Fair is valid and application of

Mr. Fair who is a representative of depositors, will be admitted by
the Hon’ble Tribunal, provided, the requirement of minimum
number of members filing the application is fulfilled.
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Chapter 6 – Prevention of Oppression and Mismanagement ©www.altclasses.

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"Marks Distribution of Past Exams (New Syllabus)"

Scanner of Past Exam Questions – New Syllabus

Attempt Q. Topic Suggested Answer / Marks

May 18 No Question asked 0

Nov. 18 3(a) Practical Illustration on Section Refer Answer of Q. 3

May 19* 2(a) Practical Illustration on Section Refer Answer of Q. 4

Nov. 19* No Question asked 0

Compiled by: Pankaj Garg

Application to Tribunal for relief in cases of Oppression, etc. (Sec. 241)

Answer: Conditions to be satisfied before filing an application for

The conditions which are required to be satisfied before filing an

(i) Required number of members: As per Sec. 244 of Companies

Compiled by: Pankaj Garg

members or prejudicial to the interests of the company; or

On refusal by the Board, the members, who feel oppressed by the

Examining the provisions of the Companies Act, 2013, decide:

(a) Whether the members contention shall be tenable?

Answer: Oppression and Mismanagement:

• Terms Oppression and Mismanagement has not been defined

Compiled by: Pankaj Garg

• Oppression involves an element of lack of fair dealing to the

(a) Contention of members shall not be tenable.

Compiled by: Pankaj Garg

(i) Various acts of illegal, invalid and irregular transactions entered

Answer: Oppression and Mismanagement:

• As per Sec. 244 of the Companies Act, 2013, in the case of a

Validity of Grounds on which petition is being filed:

(i) Mere illegal, invalid or irregular transactions entered into in

Compiled by: Pankaj Garg

they are oppressive to any shareholder or prejudicial to the

Conclusion: Petition filed by the group of shareholders will fail

Right to apply u/s 241 (Sec. 244)

Q.4 What is meant by oppression’? State whether the aggrieved party

(a) The majority of the Board of directors override the minority

Give your answer according to the provisions of the Companies Act,

Compiled by: Pankaj Garg

Answer: Meaning of Oppression:

• Term Oppression has not been defined under the Company

• Oppression does not include mere domestic disputes between

• There must be a continuous act constituting oppression up to

(i) Oppression of a member as a director: Oppression

Compiled by: Pankaj Garg

in this section which suggests even indirectly that unless

Q.5 ABC Private Limited is a company in which there are eight

Answer: Members right to apply for relief against oppression and

• As per Sec. 244 of Companies Act, 2013, in the case of a

• In the given case, there are eight shareholders. As per above

Conclusion: A single member can apply for relief against

Compiled by: Pankaj Garg

Examining the provisions of the Companies Act, 2013, decide whether

Also explain the impact on the maintainability of the above petition, if

Answer: Validity of Petition filed for relief against oppression and

• As per Sec. 244 of Companies Act, 2013, in the case of a

• In the present case, petition was signed by 80 members out of

Conclusion: Petition made by 80 members meets the eligibility

Compiled by: Pankaj Garg