(1) Without prejudice to any other aotion that may be taken, whether in pursuance of this Aot or any other law for the time l»«ing in foroe, any member of a company wh» oomplain« that the affair* of the effimpftof &r« Ming •onduvtod-—
8EO. 1] THE GAZETTE OF TNDIA EXTRAORDINARY 285
(a) in a manner prejudicial to the interests of the company, or
(b) in a manner oppicsBivo to some part of the members (including may make an application to the court for an order under thi ^ection.
(2) No application under sub-section (1) shall be made hy any number, unless—
(a) in the case of a company having a share capital, tho member oomplaining—
(i) has obtained the consent of not lees than one hundred in number of the members of tho company or not less than one-tenth in number of the members, whichever is less, or
(ii) holds not less than one-tenth of tho issued share capital of the oompany upon which all calls and other sums due liave been Daidi and
(6) in the case of a company not having a share capital the member •omplaining has obtained tho consent of not less than one-fifth in number of the members, and the provisions of rule 8 of Order I of the First Schedule to tho Code of Civil Procedure, 1908 (Act V of 1908), shall apply to any Biich application aa it applies to any suit within the meaning of that rule.
(3) If on any such application the court is of opinion—
(a) that the company's affairs are being conducted as aforesaid, and
(b) that to wind up the company would unfairly and materially projudioo the interests of the company or any of its members, but otherwise the facts would justify the making of a winding-up order on the ground that it is just and equitable that tho company should be wound-up, the court may, with a viow to bringing to an end the matters rnmrilninfvj of, make such order in relation thereto as it thinks fit.
(f) Without prcjudico to tho generality of tho powers* vested in a court under sub-seotion (3), any order made under that sub-section may provide for—
(a) the regulation of the conduct of the conipany's"affairs in future |
(b) the purchase of the shares or interests of any members of the company by other members thereof or by the company ,
(c) in the case of a purohase of shares or interests by tho company being a company having a share capital, for the reduction accordingly of the oompany's capital or otherwise ,
(d) for the termination of any agreement, howsoever arrived at, between the company and its managing agent, managing director or any of its other directors.
(5) Where an order under this section makes any alteration in, or addition to, the memorandum or articles of any company, then notwithstanding anything contained in any other provision of this Act, but subjoot to the provisions of the order, the company concerned shall not havo power without the leave of the court to make any further alteration in or acldition to tho memorandum or articles inconsistent with the provisions of tho order, but subject to the foregoing provisions of this sub-section the alterations or additions made by the order shall havo tho same effect as if duly made by a resolution of the oompany, and the provisions of this Act shall apply to tho memorandum or articles as •Quartered or added to accordingly.
?80 THE QAZETTE OF INDIA EXTEAOBDINAEY [PAET n
(61) A oertified oopy of every order under this section altering or adding to, or giving leave to alter or add to, tke memorandum or artioles of any company shall, within fifteen days after the making thereof, be delivered by the company to the registrar for registration, and if a oompany makes default in complying with the provisions of this sub-seotion, tho oompany and every offioer of the company who is in default shall be punishable with fine which may extend to five thousand rupees.
(7) It shall be lawful for the court, upon the application of any petitioner or of any respondent to a petition under this seotion and upon such terms as to the court appoarg just and oquitablo, to make any such interim order as it thinks fit for regulating the conduct of the affairs of the company pending the making of a final order in relation to the application.
(8) In any oase in which the oourt makes an order terminating any agreement between the oompuny and its managing agent or managing director or any of its other directors, as tho case may be, the court may, if it appears to it that the managing agent, managing dirootor or other direotor, as the case may be, haa misapplied or retained or beoome liable or accountable for any money or properly of the company or has been guilty of any misfeasance or breach of trust hi relation to the company, award by way of damagos against the managing agont, managing direotor or other direotor such sum as it thinks fit, and the provisions of sections 235 and 236 of this Act shall apply as if the company wore in tho course of being wound-up and proceedings under section 235 had been commenced by a contributory within the time limited bv that section.
Explanation,—For the purposes of this seotion, any material change afte r the ooannon.com.9nt of fchi Indun Companies (Amendment) Ordinanco, 1931, in the control of a company, or in tho caso of a company having a managing agent in the composition of the managing ngent \vhich ie a firm or in Ihe control of the managing agent which is a oompany, may be deemed by tho court to be a fact which would justify the making of a winding-up ordor on the ground that it would bo jint and equitable that tho company should be wound-up :
Provided that the oourt is satisfied that by reason of the ohango tho internets of tho company or any of its members are or are likely to bo unfairly anJ materially prejudiced, 1 5 3 D . Effect of t e r m i n a t i o n of managing agency agreement, etc.—(I) W h e r e an agroomont between a company and its managing agent, ma laging director or other direotor, as the caso may be, is terminated by virtue of an order made undor sub-seotion (8) of sootion 153C,—
(a) the ordor shall not give rise to any claim on the part of the managing agent, managing direotor or other dirootor, as the case may be, for damages or for compensation for loss of offloo or otherwise, whether the claim is made in pursuance of the agreement or otherwise, and
(b) no managing agent, managing director or other direotor or any associate of such managing agent shall, without the leave of tho court, be appointed or reappointed or be entitled to act as the managing agont, managing direotor or director or manager of the oompany for a poriod of five years from the date of the order.
(2) If any poraon acts as the managing agent or manager of a oompany in contravention of the provisions of this seotion, such person, and in the case of a oompany each of its direotors, shall be punishable with imprisonment for a SRO. 1] THE GAZETTE OF INDIA EXTRAOEDINAHY 287 term which may extend to one year or with fine which may extend to fivo thousand rupees or with both.
(3) No court shall grant leave under this section unless notice of the intention to apply for such loavo has been served on the Central Government in the manner specified in section 80 of the Code of Civil Procedure, 1908 (Aot V of 1908) in respect of suits against the Government.
Explanation.—In this section, the expression ''associate of a managing agent" means—
(a) any firm of which tho managing agent is a partner ;
(b) any partner of the managing agent ;
(c) any private company, of which tho managing agent is a member, director, managing agent or manager ; and
(d) in the case of a managing agent which is a company, any subsidiary company of the managing agent and any director, managing agent or manager of the managing agont or any subsidiary company of tho managing agent.1
8. Insertion oi now section ^89B in Act VII oi 1913.—Afier >(j<non 2.SS»A ol th« principal Aot, the following section shall bo inserted, namely :— "289B, Power of Central Government, to appoint advisory oornmismin and to make rules in respect of certain matters.—(1) For tho purpose of advising it in the exercise of its powers under section 86.T, section 87AA, clause (c) of section 87B, section 87BB or Mention 87CC, tho Central Government may constitute a commission consisting of noj; more than thioa persons with suitable qualifications and appoint one of them to be th>* chairman thereof,
(2) It shall be the duty of the commission to inquire into mid advi-,0 the Central Government on all applications for approval rnado to the Cnntral Government under any of the sections rofori'ed to in sub-section (I).
(3) Every application for approval made to the Central Government under any of the sections referred to in sub-section (1) shall be in such form as may be prescribed.
(4) For the purpose of making any inquiry under this section the commission may—
(a) require the production before it of any books or other documents in the possession of the company relating to any matter under inquiry;
(b) call for any further information or explanation if the commission is of opinion that such information or explanation is necessary in order that the books or other documents produced before it may afford full particulars of the matter to which they purport to relate;
(c) with such assistants as it thinks necessary, inspect any books or other documents so produced and mate copies thereof or take extracts therefrom;
(d) examine on oath n managing director or any other officer of the company relating to any matter undor inquiry and administer au onth accordingly to the person for the purpose.
288 THE GAZETTE OF INDIA EXTBAORDINABY ' F P A D T ^ I
(5) If any person refuses or neglects to produce any book or other document in his possession or custody which he is required to produce under this section or to answer auy question put to him relating to any mutter under inquiry, he shall be punishable with imprisonment for a term which may extend to two yews and shall also be liable to fine.
(6) No suit or other legal proceeding shall lie against the Central Government, the commission or any member of the ooinmission in respect of anything wbioh is in good faith done or intended to be done in pursuance ot this section or the sections referred to in sub-section (i) or of any rules or orders made thereunder."
EAJENDKA TEASAD, President, K. V. K. 8TJNDABAM, Scoy. to the Oovt. of India PRINTED IN INDIA BY THE MANAGER GOVT. OF INDIA PRESS, NEW DELHI AND PUBLISHED BY THE MANAGER OF PUBLICATIONS, DELHI, 1951