The case discusses the provisions and norms to be followed at the time of winding up of the company. At the time of liquidation, workmen’s dues and secured creditors dues are given important consideration and all their debts are cleared off on preferential basis. Therefore, in the present case, the assets of the company are sold for the repayment of the loan amount instead of the taxes.
The given case talks about the concept of ultra vires and its ambit, the concept of ultra vires talks about those acts that are not mentioned in the Memorandum of Association of the company and are considered as beyond the power of the company. The case discusses those acts which are not specifically mentioned but consequentially dependent on those provisions which are mentioned in MOA, therefore those provisions ought not to be considered as ultra vires, unless expressly prohibited by the company or law.
In the present case, NCLT has opined that the depositors do not differ prior to or after, after the coming of the Companies Act, 2013. The term ‘every deposit’ comprises of all the existing deposits issued under new and old Companies Act. The court held that merely questioning the definition of deposits under Section 73(1) cannot be a valid ground for the dismissal of the case.
In this case the Madras High Court opined that a writ of Mandamus should only be issued if it is uniformity with Section 45 of The Specific Relief Act, 1877. In this case, no writ is issued because there are no rights of the plaintiff declared. Board of Directors are authorised to take appropriate decisions in the general meeting for the better functioning of the company by complying with the laid legal provisions.
This case talks about the concept of redemption of preference shares, the preference shares can be redeemed either out of the profits of the company which would otherwise be available for dividends or out of the proceeds of the fresh issue of shares made for the purpose of the redemption. The judgement also says that consent of the court is not required under Section 80 of the Companies Act, 1956 if the Article of Association permits for the redemption.
The present case discusses the role of the official liquidator in the winding up of the company and what actions to be taken by him if the voluntary liquidator elected by the creditors of the company for the voluntary winding up of the company has not handed over the possession of the assets and statement of affairs of the company to him and is missing for a very long period of time. The case concludes that the Directors cannot be held liable when they have properly handed over the assets and all the relevant documents to the voluntary liquidator.
The case discusses the provisions in regard to the extra ordinary general meeting of the company and the provisions for the appointment and removal of the directors. The intimation about the extra ordinary general meeting should be given by issuing prior notice of about 21 days. If any decisions need to be taken in the context of Board of Directors, then all the directors should be present in that meeting.
The case discusses the provisions related to issue of Bonus Shares in a company. The issue of such shares must rely upon the provisions mentioned in the Memorandum and Articles of Association of the company. As per the provisions laid down by the Companies Act, a company can issue fully paid-up bonus shares to its members out of Free Reserves, Securities Premium Account or Capital Redemption Reserve Account.
The present case involves the issue related to sub-tenancy. A tenant has no right to lend the property for sub-tenancy without the consent and written agreement of the landlords. The sub-tenants have to inform about the agreement in writing to the landlord within one month of taking over the possession. The case also discusses that the official liquidator under Section 535 of the Companies Act, 1956 has a right to deliver the vacant possession of the property to the appellant.
The Securities Exchange Board of India has been established to protect the interests of thee investors in the Securities market. The court in this case opined that if the minimum subscription prescribed in the prospectus of the company has not been received then it is not a valid allotment. No shares can be allotted unless atleast the amount of minimum subscription stated in the prospectus has been subscribed. Therefore, in the given case the issue was undersubscribed so the company has to refund all the application money received, to the applicants along with the adequate amount of interest.