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CMA Final · Corporate and Economic Laws · Prevention of Oppression and Mismanagement

Under section 241(3), on what basis may the Central Government refer a case against a person to the Tribunal?

The Central Government may refer the case to the Tribunal requesting an inquiry and decision on whether the person is fit and proper to hold the office of director or any other office connected with the management of any company, as stated in section 241(3).

  1. AFor inquiry into whether the person is fit and proper to hold office of director or any other office connected with management of any companyCorrect
  2. BFor an order directly winding up the company
  3. CFor recovery of dividends from the person
  4. DFor cancelling the registration of the company automatically

Explanation

Section 241(3) allows the Central Government, where circumstances such as fraud, misfeasance, persistent negligence or breach of trust exist, to initiate a case and refer it to the Tribunal for inquiry and a decision whether the person is a fit and proper person to hold the office of director or any other office connected with management of any company.

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