m Rules of majority is applicable for all the

companies which comes under the

indian company act 1956
m The shareholders pass resolution on
various subjects either by simple majority
or by 3/4th of the majority
m The court in general will not intervene at
the instance of shareholders in matter of
internal administration and will not
interface with the management of the
company by its directors so long as they
are acting within the powers conferred
on them under the article of the
company.
1.Where the act done is illegal or ultra-vires
the company.
A shareholders is entitled to bring an
action against the company and its
officers in respect of matters which are
illegal or ultra-vires the company since
no majority of shareholders can sanction
such matters.
j. Breach of fiduciary duty.
when a director is in breach of fiduciary
duty, every shareholder may be
regarded an authorized organ to bring
the action
3. Where the act complained of
constitutes a fraud on the minority.
where the majority of a company·s
member use their power to defraud or
oppress the minority, their conduct is
liable to be impeached even by single
shareholder
m Where an act which requires special
resolution to be effective but has, in
fact, been done by a simple majority.
m where the personal rights of an
individual member have been
infringed.
Infringement of a member·s individual
rights like right to vote, right to receive
dividends
m ïrotection under the companies act.
1956.
A. Variation of class rights.
B. Scheme of reconstruction and
amalgamation.
C. Oppression and mismanagement.
D. Rights of dissentient shareholders at the
time of take-over bids.
mSs397-399 and40j.
Ss397 provides that any member of a
company who complains that its affairs
are being conducted in a manner
oppressive to any member may apply to
the tribunal.
1. The affairs of the company are being
conducted in a manner that prejudicial
to public interest or to its members.
j. To wind up the company would unfairly
prejudice to the member who have
lodged the complain.
m Ss399 specifies the persons who are
entitled.
1. In the case of a company having a
share capital, 100 members or 10% of the
total number of its members whichever
is less or members holding 10% of the
issued share capital.
j. In case of a cos. not having share
capital, j0% of the total members of its
member.
m Ss 40j provides for the relief that can be
provide by the tribunal and tribunal·s order .
a) Regulation of conduct of the cos. Affair in
the future.
b) The acquisition of the shares or interests by
the other of any members or by the cos.
c) The consequent reduction of the share
capital in case of (b).
d) Termination, setting aside or modification of
any agreement.
e) Setting aside of any transfer, delivery of
goods, payment, execution or other act
relating to the property made or done
by or against the company within three
months of the application.
m Ss 408 empowers central government to
nominate directors on the board of
directors of a company to prevent
oppression and mismanagement.