Aryaman Dubey, BML Munjal University
Brief Background
The Madras High Court originally received the case in 1977. The Supreme Court then heard the appeal on the verdict, and the ruling was issued in 1981.
There is no doubt that shareholder disputes are common in the corporate world. Corporate feuds amongst the shareholders of the largest corporations in the world are a common occurrence that is not just restricted to India. The persecution of minority shareholders by majority stockholders is a recurring theme in the bulk of these disputes. The Indian laws do offer relief and a solution to such a situation, but it is still debatable to what extent they resolve it.
The Sectionssuch as 397 and 399 of the former Indian Companies Act of 1965 (currently sections 341 to 346 of the Indian Companies Act, 2013) dealt with provisions relating to oppression and mismanagement against a member/members of any company incorporated in India and the relief to be granted to such member or group of members if a case of oppression or mismanagement exists. This act does not provide a definition for the words "oppression" or "mismanagement." However, given the facts of a case, the courts have the power to interpret them as they see proper, identify any instances of "oppression" or "mismanagement," and then issue a ruling giving equity and defending the public interest.
The landmark case Needle Industries (India) v. Needle Industries Newey (India) Holding Ltd. on this subject is used as precedent in other instances of a similar nature. I'll be talking about the legal issues raised by the judgment's main contention.
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