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

Under section 241(3), the Central Government may refer a case to the Tribunal against a person concerned in the management of a company. What is the Tribunal asked to decide in such a reference?

The Tribunal is asked to inquire and record a decision on whether the person concerned is a fit and proper person to hold the office of director or any other office connected with conduct and management of any company. It is not about winding up or punishment.

  1. AWhether the company should be wound up immediately
  2. BWhether such person is a fit and proper person to hold the office of director or any other office connected with the conduct and management of any companyCorrect
  3. CWhether the shares of the company are to be delisted
  4. DWhether the person should be sentenced to imprisonment

Explanation

Section 241(3) allows the Central Government to request the Tribunal to inquire into the case and record a decision on whether the person is a fit and proper person to hold the office of director or any other office connected with the management of any company. It does not ask for winding up or imprisonment.

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