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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Stakeholders Rights

Meridian Pharma Ltd's Stakeholders Relationship Committee considered a debenture-holder's grievance in good faith but could not resolve it within the expected time. The debenture-holder alleges contravention of section 178. What is the legal position?

There is no contravention. The proviso to section 178(8) says that the committee's inability to resolve or consider a grievance in good faith is not a contravention of the section, so Meridian Pharma is not liable to the fine merely because the grievance stayed unresolved.

  1. AContravention occurs, and the company faces the section 178(8) fine automatically
  2. BContravention occurs only for the chairperson, not for the company
  3. CNo contravention, as inability to resolve a grievance in good faith is not a contraventionCorrect
  4. DNo contravention, but only if the grievance is withdrawn

Explanation

The proviso to section 178(8) states that inability to resolve or consider any grievance by the committee in good faith does not constitute a contravention. The committee did consider the grievance in good faith, so the fine does not apply. Withdrawal of the grievance is not a condition.

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