POINTS

EXPLANATION

1. Order passed by the Tribunal:

If, on any application made under section 241, the Tribunal is of the opinion:

1. 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 in a manner prejudicial to the interests of the company; and
2. 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,

the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks fit.

2. Nature of orders that can be passed by the Tribunal:

Without prejudice to the generality of the powers under sub-section (1), an order under that sub-section may provide for:

1. the regulation of conduct of affairs of the company in future;
2. the purchase of shares or interests of any members of the company by other members thereof or by the company;
3. in the case of a purchase of its shares by the company as aforesaid, the consequent reduction of its share capital;
4. restrictions on the transfer or allotment of the shares of the company;
5. the termination, setting aside or modifications, of any agreement, how so ever arrived at, between the company and the managing director, any other director or manager, upon such terms and conditions as may, in the opinion of the Tribunal, be just and equitable in the circumstances of the case;
6. the termination, setting aside or modifications of any agreement between the company and any person other than those referred to in clause(e):                                                                                                     Provided that no such agreement shall be terminated, set aside or modified except after due notice and after obtaining the consent of the party concerned;
7. the setting aside of any transfer, delivery of goods, payment, execution or other act relating to property made or done by or against the company within three months before the date of the application made under this section, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference;
8. removal of the managing director, manager or any of the director of the company;
1. recovery of undue gains made by any managing director, manager or director during the period of his appointment as such and the manner of utilization of the recovery including transfer to Investor Education and Protection Fund or repayment to identifiable victims;
10. the manner in which the managing director or manager of the company may be appointed subsequent to an order removing the existing managing director or manager of the company made under clause (h);
11. appointment of such number of persons as directors, who may be required by the Tribunal to report to the Tribunal on such matters as the Tribunal may direct;
12. imposition of cost as may be deemed fit by the Tribunal;
13. any other matter for which, in the opinion of the Tribunal, it is just and equitable that provision should be made.

3. Filing of copy of order of Tribunal:

A certified copy of the order of the Tribunal, shall be filed by the company with the Registrar within 30 days of the order of the Tribunal.

4. 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.

At the conclusion of the hearing of the case in respect of sub-section (3) of section 241, the Tribunal shall record its decision stating therein specifically as to whether or not the respondent is a fit and proper person to hold the office of director or any other office connected with the conduct and management of any company. [Sub-section 4A].

5. Alteration in Memorandum or Articles through order of Tribunal:

Where an order of the Tribunal makes any alteration in the memorandum or articles of a company, then, notwithstanding any other provision of this Act, the company shall not have power (except to the extent, if any, permitted in the order) to make, any alteration whatsoever which is inconsistent with the order, either in the memorandum or in the articles without the leave of the Tribunal. [Sub-section 5].

6. Altered provision shall apply:

The alterations made by the order in the memorandum
or articles of a company shall have the same effect in all respects as if they had been duly made by the company in accordance with the provisions of this Act and the said provisions shall apply accordingly to the memorandum or articles so altered.

7. Filing of certified copy of order altering the Memorandum or Articles with the Registrar:

A certified copy of every order altering, or giving leave to alter, a company’s memorandum or articles, shall be filed by the company with the Registrar who shall register the same within 30 days after the making thereof.

8. Punishment in case of contravention:

If a company contravenes the provisions of sub- section (5), the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than twenty-five thousand rupees, but which may extend to one lakh rupees.