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Company Law Case Study  CHAPTER - 2 Share Capital  http://www.csaspirant.online/2021/03/case-law-chapter-2-share-capital.html CHAPTER - 3 Debt Capital http://www.csaspirant.online/2021/03/case-law-chapter-4-debt-capital.html CHAPTER - 5 Charges http://www.csaspirant.online/2021/03/case-law-chapter-5-charges.html CHAPTER - 7 CSR http://www.csaspirant.online/2021/03/case-law-chapter-7-corporate-social.html CHAPTER - 8 Account and Audit http://www.csaspirant.online/2021/03/case-law-chapter-8-accounts-audit.html CHAPTER - 12  http://www.csaspirant.online/2021/03/case-law-chapter-12-overview-of.html CHAPTER - 16 Directors http://www.csaspirant.online/2021/03/case-law-chapter-16-directors.html CHAPTER - 17 KMP http://www.csaspirant.online/2021/03/case-law-chapter-17-key-managerial.html CHAPTER - 19 General Meeting  http://www.csaspirant.online/2021/03/case-law-chapter-19-general-meetings.html Team CS Aspirant Join Now Notes + Test Series + Doubts Discuss Telegram  htt...

CHAPTER 19 – GENERAL MEETINGS 07.11.2017 Jai Kumar Arya (Petitioner) vs. Chhaya Devi (Respondent) Delhi High Court Facts of the case The Company received a requisition, from its shareholders, for convening of an Extra Ordinary General Meeting (hereinafter referred to as “EGM”) on 26th May 2017, with the following proposals: “(i) removal of the plaintiff (Chhaya Devi) as Director/Managing Director of the Company, (ii) setting aside a notice, earlier issued, for approval of an agenda item, dated 31st of May 2014, to terminate the directorship of the defendants, and (iii) appointment of Defendant No. 1 (Rukmini Devi) as Managing Director of the Company.” On receiving the said requisition, the plaintiff (Chhaya Devi) responded, on 25th April 2017, alleging that the requisition was not in accordance with Section 169, read with Section 115 of the Companies Act, 2013 (hereinafter referred to as “the Act”), in as much as no Special Notice had been served, by the sharehold...

CHAPTER 17 – KEY MANAGERIAL PERSONNEL 23.08.2019 Shiv Kumar Jatia (Appellant) Vs. State of NCT of Delhi (Respondent) The Supreme Court of India Shiv Kumar Jatia is the Managing Director of M/s. Asian Hotels which looks after Hyatt Re- gency Hotel. He had authorized Mr. PR Subramanian to apply for lodging license of the hotel. There was a contravention the condition of the lodging license which led to a hotel guest enter into a semi lit under-construction terrace for smoking. The guest fell from the terrace of 6th floor to the 4th floor and got injured. Case was brought before the High Court which ordered for prosecution of the Managing director along with the other three accused by rely- ing on the case of Sushil Ansal vs. State through CBI. The Apex Court held that vicarious liability on the part of Managing Director and the Direc- tors would arise provided any provision exists in that behalf in the statute. Further, the alle- gations made on the Managing Director could not estab...

CHAPTER 16 - DIRECTORS 02.12.2019 G. Vasudevan (Petitioner) Vs Union of India (Rep. by Secretary, Ministry of Corporate Affairs and Ministry of Law and Justice) (Respondents) Madras High Court Section 167(1)(a) Companies Act not violative of Articles 14, and 19(1)(g) of the Consti- tution of India Facts of the case Petition filed under Article 226 of the Constitution of India praying for the issuance of a writ of Declaration, to declare the “Proviso” in Section 167(1)(a) of the Companies Act 2013, as inserted vide the Companies (Amendment) Act 2017 as ultra vires the Articles 14, 19(1)(g) of the Constitution of India and declare illegal and null and void. The challenge in the instant writ petition is to the vires of the proviso to Section 167(1)(a) of the Companies Act, as inserted by the Companies (Amendment) Act 2017. The same is extracted hereunder: - “(i) in clause (a), the following proviso shall be inserted, namely: — “Provided that where he incurs disqualif...

CHAPTER 12 – AN OVERVIEW OF CORPORATE REORGANISATION 20.12.2019 Joint Commissioner of Income Tax (OSD), Circle (3)(3)-1 & Ors.(Appellants) vs. Reli- ance Jio Infocomm Ltd. & Ors. (Respondents) NCLAT Mere fact that a Scheme of Arrangement may result in reduction of tax liability does not furnish a basis for challenging the validity of the same. The NCLAT, held that without going to the record and without placing any evidence or sub- stantiating the allegation of avoidance of tax by appearing before the Tribunal, it was not open to the income tax department to hold that the composite scheme of arrangement amongst the petitioner companies and their respective shareholders and creditors is giving undue favour to the shareholders of the company and also the overall scheme of arrangement results into tax avoidance. The NCLAT observed that mere fact that a scheme may result in reduction of tax liability does not furnish a basis for challenging the validity of the same. The Inc...

CHAPTER 8 – ACCOUNTS & AUDIT 04.06.2019 Hari Sankaran (Appellant) Vs. Union of India & Ors. (Respondents) The Supreme Court of India NCLAT order of allowing re-opening of books and recasting of financial statements of IL&FS is valid Facts of the case The facts leading to the present appeal in nutshell are as under: The Respondent No. 2 – IL&FS is a company incorporated under the provisions of the Com- panies Act, 1956. That the said company IL&FS has 348 group companies, including IFIN and ITNL. That the said IL&FS is a core investment company and systemically important Non- Banking Finance Company duly approved under the Reserve Bank of India Act, 1931. Over the years, it had inducted institutional shareholders. That on 01.10.2018, the Central Government through the Ministry of Corporate Affairs filed a petition before the learned Ap- pellate Tribunal under Sections 241 and 242 of the Companies Act alleging inter alia, mis- management by the ...

CHAPTER 7 – CORPORATE SOCIAL RESPONSIBILITY 13.11.2019 Apurva Natvar & Company India Private Limited vs. Registrar of Companies, Mumbai NCLT, Mumbai bench Section Violated Section 135 r/w 134(3)(o) of the Companies Act, 2013. Facts of the case The Company has violated the provision of Section 135 r/w Section 134 (3) (o) of the Com- panies Act, 2013 (hereinafter as Act) r/w. Rule 8 of Companies (Corporate Social Responsi- bility Policy) Rules, 2014 wherein the Company has not made CSR Expenditure and has not explained the reasons in Board’s Report of F. Y. 2014-15 for non-spending of the CSR amount along with other disclosure as required under Section 135 (2) of the Act. Provisions of Companies Act, 2013 According to the provision of Section. 135 (5) of the Act, the Board of the Company was required to spend, in every financial year, at least 2% of the average net profit of the Com- pany during the three immediately preceding financial years, in pursuance of its Corporate S...

CHAPTER 5 - CHARGES Official Liquidator v. Sri Krishna Deo, (1959) 29 Com Cases 476: AIR 1959 All 247 and Roy & Bros. v. Ramnath Das, (1945) 15 Com Cases 69, 75 (Cal)]. The plant and machinery of a company embedded in the earth or permanently fastened to things attached to the earth became a part of the company’s immovable property and there- fore apart from the registration under the Companies Act, registration under the Indian Reg- istration Act would also be necessary to make the charge valid and effective. Cosslett (Contractors) Ltd., Re, (1996) 1 BCLC 407 (Ch D) A construction company’s washing machine which was in use at the site was declared under the terms of the contract to be the employer’s property during the period of construction. This was held to have created a fixed charge and not a floating charge on the machine be- cause the machine was only one fixed item and was not likely to change. In Lord Macnaghten in Government Stock Investment Company Ltd. v. Man...

CHAPTER 4 – DEBT CAPITAL 28.01.2020 The Canning Industries Cochin Ltd. (CAICO) vs. SEBI SAT The present appeal has been filed against the order dated 18th March, 2019 passed by the Whole Time Member (WTM), Securities and Exchange Board of India (hereinafter referred to as ‘SEBI’) issuing various directions under section 11, 11(4), 11A, 11B and 19 of the Securities and Exchange Board of India Act, 1992 (hereinafter referred to as ‘SEBI Act’). The contention of the appellant is, that Section 42 of the Companies Act is not applicable in the instant case and that the issue of the share capital is under Section 62(3) of the Com- panies Act, 2013 which has not been considered. The contention of the learned senior counsel for SEBI is, that since the offer of FCDs was for more than 200 persons, the said offer is a deemed public offer and therefore part one of the Chapter 1 of the Companies Act is required to be followed. Judgment : The Tribunal held that, as per Section 71...

CHAPTER 2 – SHARE CAPITAL 29.01.2020 Bank of Baroda (Appellant) v. Aban Offshore Limited (Respondent) NCLAT Remedies available for Preference shareholders in relation to redemption of preference shares Facts of the case The present Appeal has been filed by the Appellant w.r.t the NCLT, Chennai Bench (Tribu- nal) order who has dismissed the application of Appellant solely on the ground that the Ap- pellant being preferential shareholders has no locus standi to file application for redemption of shares under Section 55(3) of the Companies Act, 2013 or even under Section 245 of the Companies Act, 2013. The Appellant has submitted that the Respondent Company is a listed Company with Madras Stock Exchange Limited, Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Appellant has subscribed on various dates i.e.09.07.2005, 29.05.2007 and out of total subscription of Rs. 30,00,00,000/- worth of cumulative Redeemable Non- Convertible Preference S...