List of Acts of the Controlling Shareholders to be oppressive to Minority Shareholders

1. The power exercised by the controlling shareholders is directed to destroy the company’s business – Scottish Cooperative Wholesale Society Ltd. v. Meyer (1958) 3 All.E.R. 66

2. Usurping the power and obtaining the entire power and exercising it against the wishes of the shareholders who are in minority with regard to the voting power – (Re H.R. Harmer (1958) 3 All.E.R. 689

3. Denying voting rights to the shareholders – AIR 1961 Pun. 485 (Mohan Lal Chandumall v. Punjab Co. Ltd.)

4. If the directors refuse to distribute compensation money obtained on nationalisation of the company – Re Hindustan Cooperative Insurance Society Ltd. (AIR 1961 Cal. 443)

5. Company undertaking business other than mentioned in the objects clause without calling a general meeting or passing a resolution – Re Hindustan Cooperative Insurance Society Ltd. (AIR 1961 Cal. 443)

6. Exercising the power by majority to expel members – R. Kundra v. Motion Pictures Association Delhi (1978) 48 Com. Cas. 536

7. Deadlock created in carrying out the affairs of the company due to lack of faith between two factions of the family – Shishu Ranjan Dutta v. Bhola Nath Paper House Ltd. (1983) 53, Com. Cas. 883

8. If the directors and managing directors consistently not functioning in their office -(1983) 53 Com. Cas. 883

9. The directors not taking interest in the affairs of the company and always quarrelling so as to cause loss to Accompany – Chander Krishnan Gupta v. Girdharilal Pvt. Ltd. (1984) 56 Com. Cas. 284

10. In a company where there are only two shareholders and who are directors and one director who has got majority shares refused to cooperate with the affairs of the company and exhibiting mutual lack of confidence not to be settled otherwise than by taking it to court by mutual domestic policy – Re Combust Technic Pvt. Ltd. (1986) 60 Com. Cas. 877

11. If the directors refuse to register shares in the name of complaining petitioners with an object to retain control over the affairs of the Company – Kumar Exporters P. Ltd. v. Naini Oxygen and Acetylene Gas Ltd, (1986) 60 Com. Cas. 984

The aforesaid instances are illustratives and certainly they are not exhaustive. There are instances where the court refused to accept certain acts not amounting to oppression for the purpose of invoking Section 241 of the Act.– Palghat Exports (P.) Ltd. vs. T.V. Chandran and Ors. (1994) 79 Comp. Cas. 213 (Ker.) 

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