important case laws

Question 1

Haydon’s case is applicable only when the words used

are ambiguous and are reasonably capable of more than one meaning

Answer 1

CIT V/s Sodra Devi

Question 2

Haydon’s rule : does not normally apply to fiscal statutes like Income Tax Act. (Words of the statute are given plain meaning)

Answer 2

Hemraj Gordhandas V/s H.H Dave

Question 3

Rule of Harmonious Construction:

i) 2 provisions conflicting - Harmonious interpretation
ii) Head on Clash - Avoided
iii) Not possible to harmonise - Effect is given to all of them
iv) 1 provision - not be allowed to defeat the other provision Unless: Impossible
v) An interpretation which reduces one of the provisions to a dead letter is not Harmonious Interpretation

Answer 3

Sultana Begum V/s Premchand Jain

Question 4

Rule of Ejusdem Generis : Of the same class or species
Ex: oxen, bulls, goat, sheep, cows, horses etc

Answer 4

Royal Hatcheries Pvt Ltd V/s State of AP

Question 5

Expresio Unius Est Exclusio Alterius : Express mention of one thing means the exclusion of another Sub Section - CST 2 parts - i) tax payable ii) Tax & penalties

Answer 5

Kemka & Co V/s State of Maharashtra

Question 6

Marginal Notes - give an indication as to what exactly the mischief that was intended to remembered and throws light on the intention of the legislature. It is a relevant factor to be taken into consideration
in construing the ambit of the section

Answer 6

Shree Sajjan Mills Ltd V/s CIT

Question 7

It is a cardinal rule of interpretation that a proviso to a particular provision of a statute embraces the field which is covered by the main provision It carves out an exception to the main provision to which it has been enacted and to no other

Answer 7

Ram Narian Sons Ltd V/s Assistant Commissioner of Sales Tax

Question 8

Rule of Reasonable Construction : words of statute must
be construed so as to lead to a sensible meaning
In order to determine whether a transaction is intra vires
the Objects of the Co, the object clause must be
construed neither with rigidity nor with laxity

Answer 8

Waman Lal Chotanlal
Parekh V/s Scindia Steam
Naviation Co. Ltd.

Question 9

(a) The conduct complained of should at the lowest
involve a visible departure from the standards of fair
dealing, and of violation of the conditions of fair play
on which every shareholder who entrusts his money
to the company is entitled to rely.
(b) conduct must be burdensome, harsh and wrongful;
Lack of probity or fail dealings must be shown

Answer 9

Shanti Prasad Jain Vs.
Kalinga Tubes Ltd.
(1965)

Question 10

Shareholders of a Holding Co cannot file a petition

against the subsidiary of the Holding Co

Answer 10

Herberstson Ltd V/s Kishore

Rajaram Chabaria

Question 11

-There may be oppression where a minority by physical
force or other wrongful act oust the majority, so as to
prevent the lawful exercise of their rights as SHs
- Unauthorised persons claimed to be SHs / Directors

Answer 11

Re, Sindri Iron Foundry Pvt

Ltd

Question 12

Winding up By Court - Non Commencement/ Suspension
of Biz
i) Mere fact - by itself is not a ground - although they
give the jurisdiction to the court
ii) Find out whether there is some good reason
accounting for this
iii) Evidence - No intention of carrying on Biz or that it is
not likely to do so
iv) Reasonable hope - Commencing / resuming - at
profit
v) Whether the substratum of the Co has disappeared

Answer 12

ROC V/s Bihar Wire & Wire

Products P. Ltd

Question 13

Winding up By Court - Inability to pay debts
Mere fact that certain liabilities might accrue in future
which could exceed the existing assets of the company,
would not necessarily lead to a conclusion that the
company would be unable to meet its liabilities when
they will accrue due

Answer 13

ROC V/s Ajanta Lucky

Scheme & Investments Ltd

Question 14

Winding up By Court - Inability to pay debts
i) Not Obligatory for the court - even if 1 or more grounds
of S.433 exist
ii) Court has Discretionary Power
iii) Check - Winding up - in the interest of Justice
iv) Loss of employment to existing employees &
diminishing employment opportunities
v) Take into consideration the entire status & Position of
the Company in the market & the element of public
policy
vi) Paying taxes to Govt Regularly - Loss of revenue to
the govt
vii) Creditors have opposed the winding up petition
viii) Temporary Cash crisis - Court would give some time
ix) Assess Effect of Winding up on the larger interest of
the society

Answer 14

Tata Iron & Steel Co V/s
Micro Forge (India) Ltd

Question 15

Winding up By Court - Just & Equitable Grounds - Public Interest
- Co Employed about 700 employees who opposed winding up
- From its accounts the Co appeared to be making profits
- It could not be said that the substratum had failed or that there were Just & Equitable grounds to wind up the
Co

Answer 15

Manjulabai V/s Jayant

Vitamins Ltd

Question 16

Winding up By Court - Petition by Co - Workers
- The Act Does not authorise the worker to file petition
- There is in the act expressly prohibiting workers from
being heard in a winding up petition. Accordingly, the
workers are entitled to be heard - as interveners & not as
parties

Answer 16

National Textile Worker’s
Union V/s
P. R. Ramakrishnan

Question 17

Whether exchange ratio approved by SHs of merging
Cos can be questioned by a small group of dissenting
SHs ??
- Approved by majority - No basis to doubt their
judgement
- Valuation has been confirmed to be fair by firm of Auditors
- Cannot be questioned unless it is unfair & Unreasonable

Answer 17

Hindustan Lever Employees
V/s
Hindustan Level Ltd

Question 18

S. 164 - Disqualification of Directors

Appellate Tribunal cannot remove disqualification pending the disposal of appeal

Answer 18

Rama Narang V/s Ramesh

Narang

Question 19

Adjourned AGM to be held within the due date

Answer 19

Bejoy Kumar Karnani

Question 20

Continuation of Retiring directors - Special
Circumstances
Special circumstances may justify continuation of retiring directors , if the meeting is not held, as there cannot be
vacuum in the BOD

Answer 20

Ambica Tea Company Ltd

Question 21

S.161(2) - Alternate Director
- Actual attendance at the BM of the Director appointing him had not been contemplated
- Return to the India would NOT suffice
- Not only a temporary return, but an intention to stay in India so as to enable him to transact the business of the
company
- Return should have some amount of permanence

Answer 21

Janson Engineering &

Trading Pvt Ltd

Question 22

Special Notice

The special notice is not bound to give reasons for removal of the Director

Answer 22

LIC V/s Escorts Ltd

Question 23

S.166 - Distinction B/w “Appointment” & “Assignment”
The word “his” indicates that the prohibition applies only when an office held by a director is assigned to any other person. Where a director dies the office becomes vacant and therefore such office cannot be assigned to anybody. Thus, assignment of office of director usually takes place when the director is alive.

Answer 23

Oriental Metal Pressing Pvt

Ltd V/s B. K. Thakoor

Question 24

Articles Cannot create a Binding Contract

Answer 24

Elley V/s Positive Life

Assurance Co Ltd

Question 25

Articles cannot create a binding contract however articles can provide a basis for the contract

Answer 25

Port Darwin Mining Co

Question 26

Guarantee Commission
Guarantee commission paid to directors for giving surety against loans or credit facilities taken by the company from financial institutions is not a remuneration. The directors giving guarantee does not render manual, clerical, technical, supervisory or administrative service.
He gets commission for the risk which he bears & has nothing to do with his directorship

Answer 26

Suessen Textiles Bearings Ltd