NATIONAL LAW UNIVERSITY ODISHA,

CUTTACK

COURSE OUTLINE

COMPANY LAW
COMPULSORY PAPER

B.A./B.B.A. LL.B.
IV SEMESTER
2024

Course Instructors:
Dr. Sudatta Barik
Dr. Mayank Tiwari
Dr. Rajat Solanki
1. COURSE INTRODUCTION

The Corporation today is not only the most effective vehicle for carrying out industrial
and commercial activities, but, it is also a social and economic institution of stupendous
size and power affecting the lives of the members of the entire society.

Industrialisation plays an important role in the economic development of India. In the

post- Independence era, Industrial regulation is employed as a principal means in the
strategy for attaining constitutional values. Companies are no doubt powerful
instruments for development. Besides bringing return of financial benefits to the capital
and labour they help amelioration of the living condition of masses. In a developing
society like India, vast variety of consumer goods are manufactured or produced and
different kinds of public utility services are generated both for general welfare and
consumption purposes. Obviously, it is beyond the capacity of one or a few
entrepreneurs to engage into such activities. Because the problem of raising large
capital needed for such enterprises, there is a looming danger of market risks. Hence,
taking recourse to the device of incorporation is the only efficacious way to surmount
all such hurdles. The course covers the important concepts for Companies Act, 2013
and rules there under.

2. COURSE OBJECTIVES

● To enable the students to understand the concept & relevance of Company Law.

● To expand and explore the students’ knowledge about the foundations of rules and
regulations for incorporation of companies.
● To describe the importance of share capital and debentures in company.

● To explain the role and powers of management of company.

● To understand the judicial remedies available to various stakeholders in Companies

Act, 2013.
● To equip the students with the knowledge of corporate functioning including
management and meetings.
● To enable the students to gain a foundation that would help them with advanced
courses in the field.
● To discuss the concept of winding-up of Companies.

3. COURSE SCOPE

COVERS
● Companies Act, 2013.
 ● Reference to other statutes, rules and regulations in special reference to
Companies Act, 2013.

4. COURSE LEARNING OUTCOMES

At the end of the course, students will be able to:

[CO 01]: To demonstrate the characteristics, advantages, and disadvantages of a company.
[CO 02]: To draft the Memorandum and Articles of Association
[CO 03]: To draft the shareholders’ agreement and share purchase agreement
[CO 04]: To enumerate and discuss about the prospectus of a company.
[CO 05]: To outline the membership of a company.
[CO 06]: To understand the process for incorporation and winding up of the Company

5. COURSE MODULES AND LECTURES

The course is divided into the following 8 modules:
Module Title No of Lectures
I Introduction and 12
Incorporation of Company
II Prospectus 6
III Share Capital and 6
Debentures
IV Membership in a Company 6
V Meetings 6
VI Company Administration 8
VII Majority Rules and 8
Minority Rights
VIII Winding Up 8
Total 60

6. CONTENT OF MODULES

MODULE-1
INTRODUCTION & INCORPORATION OF COMPANY

The Company law of business is a unique form with distinct features. The Module deals with
the historical development of corporate law in India, incorporation of company,
characteristics and types of companies. It also analyses the concepts of limited liability,
guarantee, limited by shares and recent changes emerged by the Companies Act, 2013. It
also deals with different types of companies. The module covers doctrines which plays an
important role in the management of the company.
 1.1. Historical Development of Concept of Corporate Law in India
1.2. Company- Definition, Meaning, Nature and its Characteristics
1.3. Concept of Corporate Personality, Corporate Veil, Limited Liability
1.4. Incorporation of Company & Types of Company
1.5. Promoters- Meaning, Position, Rights and Liabilities
1.6. Memorandum of Association & Articles of Association
1.7. Doctrine of Ultra-Vires, Constructive Notice, Indoor Management, Alter
Ego

Case Laws
● Salomon v. Salomon and Company Limited [1897] A.C. 22

● Macaura v Northern Assurance Company Limited [1925] A.C. 619

● Daimler Co. Ltd. v. Continental Tyre & Rubber Co. Ltd. (1916-17) All ER Rep.
191
● Sir Dinshaw Manekjee Petit,Re AIR 1927 Bom 371

● DDA v. Skipper Construction Company (P) Limited AIR 1996 SC 2005

● Gilford Motor Co. Ltd. v. Horne (1933) AllER 109

● Moosa Goolam Ariff vs Ebrahim Goolam Ariff (1912) 14 BOMLR 1211

● Kelner v. Baxter (1866) LR 2 CP 174

● Ashbury Railway Carriage and Iron Company (Limited) v Hector Riche (1875)
L.R. 7 H.L. 653

MODULE-2
PROSPECTUS
The Company need to raise finances during its lifetime. Module 2 deals with the topic of
offer document, its importance in raising finance for companies. Preparation of prospectus,
contents, liability for misstatements in prospectus is also dealt. It also deals with various
kinds of prospectus. The module deals with an exercise to draft Prospectus.

2.1. Invitation of Deposits by Companies

2.2. Prospectus- Meaning and Definition
2.3. Types of Prospectus
2.4. Drafting of Prospectus
2.5. Consequences of Mis-statement in Prospectus

Case Laws
 ● Nash v. Lynde 1929 AC 158

● Pramantha Nath Sanyal v. Kali Kumar Dutt AIR 1925 Cal 714

● APL Industries Ltd. v. Securities and Exchange Board of India (2017) 200 Comp
Cas 440 (Del)
● Derry v. Peek (1889) LR 14 AC (HL)

● Sahara India real Estate Ltd. Vs. SEBI (2013) 1 SCC 1

● DLF Limited and Ors v. SEBI [2012] 170 COMPCAS 22 (DEL)

MODULE-3
SHARE CAPITAL AND DEBENTURES

The present module deals with the methods of private placement and public issue of
securities. It also discusses the Rights Issue, buy-back of shares, sweat equity shares, and
other forms of shares. The module also deals with rules regarding issue of shares by
companies. Further the debentures and types of debentures are also covered by the module.

3.1. Sources of Capital

3.2. Classes and Types of Shares
3.3. Reduction of share capital & Buy back of share
3.4. Bonus Issues
3.5. Issues of Sweat Equity Shares
3.6. Right Issue
3.7. Debentures & Types of Debentures

Case Laws

● Head (Henry) & Co. Ltd. v. Ropner Holding Ltd. (1951) 2 All ER 994

● Ghanshyam Chhaturbhuj v. Industrial Ceramics (Pvt.) Ltd. (1995) 4 Com LJ 51

● Bank of Baroda v. Aban Offshore Limited [Company Appeal (AT) No. 35 of 2019]

● Zenith Highrise Infracon Ltd., Mr. Katyal banerjee vs. SEBI

● Nanalal Zaver v. Bombay Life Assurance Co. Ltd., AIR 1950 SC 172

● Kunnamkulam Paper Mills Ltd vs The Securities And Exchange Board WP(C).No.
19192 of 2003(I)

MODULE-4
 MEMBERSHIP IN A COMPANY

The member in company is a person who has several rights in the company. The member can
participate in general meetings, appoint the directors and is entitled to several benefits in
company. The present module deals with the modes of acquiring membership and rights and
privileges of the members. The mode of digital acquisition of shares and dematerialisation of
the existing shares are also covered in the module. Further the concept of transfer and
transmission of the shares is also dealt.

4.1. Modes of Acquiring Membership

4.2. Member, Rights and Privileges of Members, Register of Members
4.3. Dematerialisation and Rematerialisation of Securities
4.4. Transfer and Transmission of Securities in Physical and Dematerialised
forms (Restrictions section 52 of Companies Act, 2013)
4.5. Nomination

Case Laws
● Herdilia Unimers Ltd. vs Smt. Renu Jain

● 1998 92 CompCas 841 Raj.

● Vickers Systems International Limited v. Mahesh P. Keshwani [(1992)

13 Com Cases 317 (CLB)].
● Lalithamba Bai v. Harrisons Malayalam Ltd., (1988) 2 Comp LJ 41
(Ker)].
● Morgan v. Gray, (1953) All E.R. 213

MODULE-5
MEETINGS

The decision of company can be taken with the majority either in the meeting of the directors
or the shareholders. The Companies Act, 2013 provides for participation of directors in
Board Meetings through Audio-Visual mode. Module deals with different types of meetings
of company and recourse for not conducting of meetings. It also covers the general rules to
be followed during the meetings and the means of exercising voting rights by the
shareholders.

5.1. Meetings
5.2. Meeting of Board
5.3. General Meetings
5.3.1. Annual General Meeting
5.3.2. Extra Ordinary General Meeting
5.4. Meeting Rules
Case Laws

● Andhra Pradesh Housing Board V IJM (India) Infrastructure Ltd. and Others.
[2019]CompLJ, Vol 2

● Ramprasad Dalmia V Board of Directors, Milk food Ltd and others.[2019]

CompLJ ,Vol 1
● Tapan K. Chowdhury V. Registrar of Companies, [2003] 55 CLA 80

● T. V Mathew Vs. Nauokkara Agro Processing Co. Ltd,[ 2002] 46 CLA 101

● Pranchi Insurance Company Ltd. Vs. Chaudhary Madhusudan Das,[1964] 2.

Comp.L.J.157

MODULE-6
COMPANY ADMINISTRATION

The daily activities of the companies are regulated by the directors and key managerial
personnel. The directors are appointed by the members in general meeting. The Companies
Act, 2013 also deals with several types of directors including Independent director, Indian
director and women directors respectively. It further deals with powers, rights and duties of
directors.
6.1. Directors - Powers and Duties of Directors
6.2. Appointment of Director
6.3. Types of Director
6.4. Independent Directors
6.5. Dis-Qualification & Removal of Directors
6.6. Key Managerial Personnel
6.7. Duties of directors
Case Laws

● Sanjiv Kothari v Vasant Kumar Chordia (2005) 66 CLA 45 (CLB)

● Achintya Kumar Barua alias Manju Baruah Vs Ranjit Barthkur Company Appeal
(AT) No. 17 of 2018 February 8, 2018
● Belfin Spa (A Company incorporated Under the laws of Italy) & Ors. (Appellants) v.
Cima Shyam Springs Private Limited & Ors. (Respondents) (dated: 10th June, 2019)
● In re. Godrej Industries Limited (2014)

MODULE-7
 MAJORITY RULES AND MINORITY RIGHTS

The present module deals with the rule of majority. The decisions in company are taken by
the majority but the rights of minority are also protected. The module also deals with the
remedies to shareholders in case of oppression and mismanagement of companies. The new
mode for enforcing rights by Class action suit has also been explained in the module.

7.1. Law relating to Majority Powers and Minority Rights

7.2. Shareholder Remedies – Actions by Shareholders, Statutory Remedies,
Personal Actions
7.3. Prevention of Oppression and Mis-Management
7.4. Class Action Suit

Case Laws

● Foss v. Harbottle, [1843] 2 Hare 461.

● Edwards v. Halliwell, [1950] 2 All ER 1064.

● Prudential Assurance Co Ltd v Newman (1982)

● Rajahmundry Electric Supply Co. v. Nageshwara Rao, MANU/SC/0008/1955.

● Shanti Prasad Jain v. Kalinga Tubes Ltd., AIR 1965 SC 1535.

● Tata Sons Ltd. v. Cyrus Investments (P) Ltd. 2021 SCC OnLine SC 272

MODULE-8

WINDING UP

Winding up is a proceeding by means of which the dissolution of a company is brought

about and in the course of which its assets are collected and realised; and applied in payment
of its debts; and when these are satisfied, the remaining amount is applied for returning to its
members the sums which they have contributed to the company in accordance with Articles
of the Company.” The module deals with the concept of Winding up under Companies Act,
2013.

PARTS:

8.1 Winding up: Meaning, Concept and Types

8.2 Compulsory Winding up under Companies Act, 2013
8.3 Companies (Winding Up) Rules 2020
Case Laws
● Action ISPAT and Power (P) Ltd. V Shyam Metalics and Energy Ltd., 2)
(2021) 1 Comp LJ 15 (SC)

● Kaledonia Jute and Fibres (P) Ltd. V. Axis Nirman and Industries Ltd. And
others, 3) (2021) 1 Comp Lj 1(SC)

● Kamal Udday Shankar Chaudhry and others V Plenthico Pharmaceutical

Ltd.[2018] CompLJ, Vol 4

● Gladstone Engineering Ltd., In re Sanjib Banerjee, CP No. 209 of 2012,

(2013) 119 SCL 132Calcutta

● State of Gujarat and Another V official Liquidator of Vijay Mills Co. Ltd.
(In Liquidation) and others. (2018) 3 Comp LJ 41 (Guj)

● Majestic Infracon (P) Ltd Vs Etisalat Mauritius Ltd (2014) 45

7. COURSE PEDAGOGY
A) Lectures
B) Case Study
C) Group Discussion
D) Discussion Leading
E) Exercises
F) Assignments

8. COURSE LEARNERS’ PARTICIPATION

Course learner should come to the lecture sessions:
a) After going through the relevant part in the course study material.
b) Bare Act must be brought and not come with bare hands.
c) Come without fail in time.
d) Deliberate in the class purposefully and meaningfully.
e) Engaging in any other activity during lecture is absolutely unwelcome.
f) Facilitation of your own as well as others’ learning.

9. Recommended Books
⚫ CR Dutta on Company Law, 7th Ed., Lexis Nexis (2016).

⚫ Gower and Davis: Principles of Modern Company Law, 9th Ed., Sweet & Maxwell
(2012).
⚫ A Ramaiya, Guide to the Companies Act, 18th Ed., Lexis Nexis (2014).
 ⚫ Avtar Singh, Company Law, 16th Ed., Eastern Book Company (2016).

⚫ Ramakrishna Viraraghavan, Memorandum of Association, Article of Association &

Incorporation of Companies, 6th Ed., Lexis Nexis (2016).

⚫ K.R Chandrate, Company Meetings (Law, Practice & Procedure), 3rd Ed., LexisNexis
(2015).

⚫ Dr K R Chandratre, Compendium of Key Issues Under Corporate Law,

Bloomsbury India, (2020)

⚫ Reinier Kraakman, John Armour, et al., The Anatomy of Corporate Law: A

Comparative and Functional Approach, Oxford Scholarship Online.
DOI:10.1093/acprof:oso/9780198739630.001.0001

10. ARTICLES
1. Umakanth Varottil, Varottil, Umakanth, The Evolution of Corporate Law in Post-
Colonial India: From Transplant to Autochthony (January 13, 2015). American
University International Law Review, Vol. 31, pp. 253-325, 2016; NUS Law Working
Paper No. 2015/001, NUS - Centre for Law & Business Working Paper No. 15/01,
Available at SSRN: https://ssrn.com/abstract=2557809;

2. Naniwadekar, Mihir Chandrashekhar and Varottil, Umakanth, The Stakeholder

Approach Towards Directors’ Duties Under Indian Company Law: A Comparative
Analysis (August 11, 2016). In Mahendra Pal Singh, The Indian Yearbook of
Comparative Law 2016 (India: Oxford University Press, 2017) 95-120, NUS - Centre
for Law & Business Working Paper No. 16/03, NUS Law Working Paper No.
2016/006, Available at SSRN: https://ssrn.com/abstract=2822109;

3. Manoj Kumar Sharma and Mayank Tiwari ‘Independent Director and Protection of
Investors’ Interest: A Critique’ (2021) RLR X 75

11.COURSE EVALUATION

As per NLUO Examination Rules.

12. LIST OF CASES

❖ Dhulia – Amalner Motor Transport Ltd v. R.R. Dharamsi AIR 1952 Bom. 337

❖ Cotton Corporation of India Ltd. v. G.C. Odosumathd (1922) 22 SCL 228 (Kar)
❖ State of U.P. v. Renusagar Power co. (1991) 70 Comp.Cas. 127

❖ Jones v. Lipman (1962)All E R 442

❖ Merchandise Transport Ltd. v. British Transport Commission (1982) 2 QB 173

❖ Week v. Popert (1873) L.R. 8 C.P.427

❖ Workman v. Associates Rubber Industry Ltd. (1985) 4 SCC 114

❖ Delhi Development Authority v. Skipper Construction Co.(P) Ltd.(1996)4 SCC 622

❖ Prem Lata Bhatia v. UOI 128 (2006) DLT 24

❖ Pratap Singh v. Bank of America (1976)46 Com. Cases 532

❖ Babulal Chaukhani v. Caltex (India) Ltd. AIR 1967 Cal 205

❖ Macaura v. Northern Assurance Co. Ltd, 1925 AC 619 HL

❖ Minerva Mills Ltd. v. Govt. of Maharashtra (1975) 45 Com. Cases 1

❖ Orient Paper Mills Ltd. v. State of Orissa AIR 1957 Orissa 232

❖ Rank Film Distributors v. ROC AIR 1967 Cal 32

❖ In re, Machinon Macknize & Co. (1967) ComLJ 200

❖ Bell Houses Ltd. v. Citywall Properties Ltd. (1966) 2 AllER 674

❖ A.L. Mudaliar v. LIC AIR 1963 SC 1185

❖ Royal British Bank v. Turquand (1943-60) AllER Rep.435

❖ Freeman v. Buckhurst Park Properties (1964)1AllER 630

❖ Regal (Hasting) Ltd. v. Gulliver (1942) 1 AllER 378

❖ Percival v. Wright (1902) 2 CH 421

❖ Industrial Development Consultants Ltd. v. Cooley (1972) 2 AllER 162

❖ Shiv Kumar Jatia vs. State of NCT of Delhi (2019)

❖ K Balasundaram V GK Alloy Steels (P) Ltd (2016) 199 Comp Case 99 (Mad)

❖ Balwant Rai Saluja vs. Air India Ltd. (2014 LLR 1009)

❖ Birla Corporation Ltd. Vs. Mahabir Prasad Sharma (2014) 185 Comp Case 43

❖ Darius Rutton Kavasmaneck vs Gharda Chemicals (2015) 14 SCC 277

❖ Harshadbhai B. Patel v/s Bhagirath Construction Co. (P.) Ltd. (2014) 185 Comp
Case 58
❖ Cyrus Investments (P) Ltd. v. Tata Sons Ltd., 2020 SCC OnLine NCLAT 1