Chapter Prevention of O & M
Ques :-
A petition by majority shareholders complaining oppression by minority shareholders.
Give your answer according to the provisions of the Companies Act, 1956.
Ans :-
Right not confined to minority: According to section 399, the right to apply for relief
under section 397/398 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 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. It was held by Calcutta High Court in Re. Sindhri Iron Foundry (P) Ltd. that the oppressed majority also might apply for relief under section 397. Therefore, the petitioners are likely to succeed in
getting relief provided the other condition laid down in section 397 (i.e. that to wind up the company would unfairly prejudice such members, but that otherwise the facts would justify the making of a winding-up order on just and equitable ground) is satisfied, even though the Delhi High Court held a contrary view in Suresh Kumar Sanghi v. Supreme
Motors Ltd.
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