Delhi HC issues notices on plea challenging provisions of Companies Act and Court Fees Act.

Team SoOLEGAL 12 Oct 2020 3:27pm

Delhi HC issues notices on plea challenging provisions of  Companies Act and Court Fees Act.

A petition has been filed in Delhi High Court against violation of Constitutional powers of certain sections in Companies Act, 2013, and Court Fees Act,1870. The High Court has issued notices to the Central Government, HP India Sales Private Ltd. and other companies on such grounds. 

The above mentioned petition was filed by Manoj Grover and Advocate Tishampati Sen represented him as his lawyer in front of the division bench comprising of Chief Justice D.N. Patel and Justice Prateek Jalan on 28th September 2020 and then the notices to the respondents were issued by the court.  

The petition challenged Sections 177(9) and 177(10) of the Companies Act, 2013, which says that listed companies as prescribed are required to set up a vigil system for directors and employees to report genuine concerns. A vigil mechanism or whistleblower provides a pathway to the directors and employees of a company to complain or report to the management regarding unethical practice, fraud or actions violating the Codes of conduct or rules and norms.  

It is mentioned in the plea that there is no sensible basis for providing this facility to only some companies and denying the employees of other companies who actually report unethical actions and behaviours.  

Section 177(10) provides unguided authority to the companies to build up the vigil mechanism without any principle. Though, the mechanism and how effective it will be completely depends on the management of the company, although sometimes it becomes unnecessary. The petition has also challenged the Constitutional powers of Section 4 and Section 9 of the Court Fees Act,1870 as it is applicable in Delhi on grounds that is it arbitrary and becomes unjust for majority of the people. It claimed that the provisions are also unfair in that they regard the unequal as equals. 

Tagged: Delhi High Court   Constitutional powers   Companies Act   Court Fees Act   Central Government   HP India Sales Private Ltd   Advocate Tishampati Sen   Chief Justice D.N. Patel   Justice Prateek Jalan  
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