CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Stakeholders Rights
Gopal Steel Ltd's Stakeholders Relationship Committee, acting in good faith, considered a debenture-holder's grievance but could not resolve it. A shareholder alleges the company contravened Section 178. Which view is correct?
It is not a contravention. The proviso to Section 178(8) protects the company where the Stakeholders Relationship Committee is, in good faith, unable to resolve or consider a grievance. The fine and officer penalties under that subsection therefore do not apply to such good-faith inability.
- AIt is a contravention, with a company fine of one lakh to five lakh rupees
- BIt is a contravention only for the chairperson, who is liable to a penalty of five lakh rupees
- CIt is a contravention unless the Tribunal condones it
- DIt is not a contravention, because inability to resolve or consider a grievance in good faith does not constitute oneCorrect
Explanation
The proviso to Section 178(8) says inability to resolve or consider any grievance by the committee in good faith does not constitute a contravention. The penalty provisions therefore do not apply. The committee's duty under 178(6) is to consider and resolve grievances, but good-faith failure is protected.
Did you get it right without looking?
One question tells you little. A timed set on Stakeholders Rights shows your real accuracy, how long you take and where you lose marks.
More Stakeholders Rights questions
- Meera Pharma Ltd is constituting its Stakeholders Relationship Committee. The board proposes Mr. Anand, the managing director, as chairperso…
- Bharat Agro Ltd, a listed public company, proposes an NRC of six members. Which composition satisfies Section 178(1)?
- Zenith Motors Ltd, a listed public company, has framed a remuneration policy under Section 178(3). What must it do regarding disclosure of t…
- Gomti Foods Ltd's Stakeholders Relationship Committee is chaired by Mr. Rao, who will be travelling on the date of the annual general meetin…
- The board of Nilgiri Tea Ltd, with 1,500 security holders, is drafting the terms of its Stakeholders Relationship Committee. Which function …
- Gramin Millets Producer Company Ltd has only individual farmers as members. One farmer holds more shares and supplies far more produce than …