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IAI Actuarial Core Principles · Business Management · Separate legal personality, directors' duties, shareholders and partnerships

Kavita holds shares in Sagar Pharma Ltd, an unlisted Indian company. The majority has for years excluded her from dividends and management in a way that is burdensome and unfair to her as a member, though not unlawful in itself. Which remedy is most directly aimed at this situation under Indian company law?

Kavita's most direct remedy is an application to the National Company Law Tribunal for oppression and mismanagement. Indian company law lets aggrieved members seek relief against affairs conducted oppressively or prejudicially, even if the majority's acts are technically lawful.

  1. AAn application to the National Company Law Tribunal alleging oppression and mismanagementCorrect
  2. BA criminal complaint of breach of trust against all other shareholders
  3. CA claim for specific performance of the articles against the auditor
  4. DA request that the Registrar of Companies transfer her shares at par
  5. An action for professional negligence against the company secretary

Explanation

The Companies Act provides that members who complain that the company's affairs are conducted in a manner oppressive to them or prejudicial to the company's interests may apply to the NCLT. This covers conduct that is unfair though technically lawful. The other options do not provide a statutory remedy for oppressed members.

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