NISHANT
Appellant cannot on the one hand agree to exit and on the other hand apply for enforcement of various rights permitted under the articles of association and the provisions of the Act.
NISHANT MEHROTRA 18 May 2018

Appellant cannot on the one hand agree to exit and on the other hand apply for enforcement of various rights permitted under the articles of association and the provisions of the Act.

Bombay High Court :: Companies Act, 1956 – Section 402 read with section 397/398 – Oppression / Mismanagement – Petition for relief against – Order of Company Law Board for valuation of shares for purpose of exit from company – What options are available to appellant – Can it be enforced as a decree to the court.

The order passed by the Company Law Board under section 402 for valuation of shares for the purpose of exit of the appellant is enforceable as a decree of the court. Under section 397/398, the appellant has two options available either to exit from the company on receiving payment of fair value for the shares or to pursue the petition for an appropriate action against oppression/mismanagement. The appellant cannot pursue both the options simultaneously, once having agreed to exit on the condition that he is paid fair valuation of his share.


Case:

Prudence Maynard v. Mundhra Container

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