Tanaya Sanyal
in Corporate Law RTI and PIL
Asked September 10, 2013

Remedies against oppression

  • 1 Answer

What are the remedies available to shareholders against oppression and mismanagement within a company under the Companies Act, 1956?

Answer 1


Company Act 1956 is Repealed with Companies Act, 2013. 

Companies Act, 2013, provides remedy to the Members in case of Oppression and Mismanagement by the Company Under the Companies Act, 2013, a Member can file a Company Suit before the National Company Law Tribunal (NCLT) under Section 241 for preventing or remeding the Oppression & MIsmanagement in the Company. 

On an Application filed by the a member u/s 241 of the Act, the NCLT has the following powers : - 

(a) Regulate the conduct of affairs of the company in future;

(b) Order Purchase of shares or interests of any members of the company by other members thereof or by the company;

(c) Place Restrictions on the transfer or allotment of the shares of the company;

(d) Terminate or modify any agreement, howsoever arrived at, between the company and the managing director, any other director or manager or any other person, upon such terms and conditions as may, in the opinion of the Tribunal, be just and equitable in the circumstances of the case;

(e) 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 under this section, which would, if made or done by or against an individual, be deemed in his insolvency to be a fraudulent preference;

(h) Remove the managing director, manager or any of the directors of the company;

(i) Recover undue gains made by any managing director, manager or director during the period of his appointment as such and the manner of utilisation of the recovery including transfer to Investor Education and Protection Fund or repayment to identifiable victims; 

(j) 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;

(k) imposition of costs as may be deemed fit by the Tribunal;

(l) any other matter for which, in the opinion of the Tribunal, it is just and equitable that provision should be made.  articles or memorandum of the company;

(m) restrain the company from committing an act which is ultra vires the articles or memorandum of the company;

(n) restrain the company from committing breach of any provision of the company’s memorandum or articles;

(o) declare a resolution altering the memorandum or articles of the company as void if the resolution was passed by suppression of material facts or obtained by mis-statement to the members or depositors;

(p)restrain the company and its directors from acting on such resolution; (e) to restrain the company from doing an act which is contrary to the provisions of this Act or any other law for the time being in force;

(q) restrain the company from taking action contrary to any resolution passed by the members; 

(r) claim damages or compensation or demand any other suitable action from or against—

(h) any other remedy as the Tribunal may deem fit


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