Remedy for act done against rights and interests of shareholders

(1) Based on the ground that the business of a company is carried on or is likely to be carried on in such a manner as to be prejudicial to the rights and interests of any shareholder of the company or that any act done or intended to be done on behalf of the company or the failure of the company to do any act required to be done has resulted in or would result in a prejudice to the rights and interests of any shareholder, such shareholder may make a complaint/ petition to the Court for an appropriate order.

(2) A shareholder who makes a petition pursuant to Sub-section(1) shall prove that the director, managing director, manager or any officer who manages and controls the company has done or intends to do any act with ulterior motive or made or intends to make undue discrimination, in contravention of the memorandum of association or articles of association or consensus agreement.

(3) On receipt of a petition as referred to in Sub-section(1), the court may if, upon inquiring into the concerned company, director or officer, the claim set forth in the petition appears to have arisen, issue such order in the name of the company as it thinks appropriate for providing remedy thereto.

(4) In issuing an order pursuant to Sub-section (3), notwithstanding anything contained in the memorandum of association, articles of association or consensus agreement, the Court may, without prejudice to the generality of the said Sub-section, also issue the following order, namely:

(a) Preventing the act and action done and taken against the rights and interests of any or all shareholders and carrying of the business of the company in the future in a due manner;

(b) Preventing any act and action being done and taken or requiring to do any act not done or intended not to be done by the company;

(c) Requiring to institute, on behalf of the company a civil case against anyone, in pursuance of a direction given by the court;

(d) Requiring to buy back the shares of any shareholder in accordance with the procedures set forth in this Act, by reducing the capital of the company, and to return the number of such shares;

(e) In the event of any loss and damage being suffered any shareholder from a discrimination made against him/her, requiring the company or the person making such discrimination to pay compensation to the shareholder for the same;

(f) Liquidating the company;

(g) Requiring the company itself or any other shareholder of the company to purchase the shares held in the name of any shareholder;

(h) Recovering the loss and damage caused to the company or its shareholders from the director or officer who has caused such loss and damage;

(i) Where the company is to buy back its own shares, issuing an order to reduce the share capital of such company as if the share capital of such company were reduced by it by adopting a special resolution on reduction of share capital; where the memorandum and articles of association of the company is to be amended by virtue of such order, issuing other appropriate order also to make necessary amendment thereto.

(5) Notwithstanding anything contained in Sub-section (1) or (2), the remedy available to a person who suffers any loss or damage because of the fact that a company or its director or any person responsible for the management or control of the company or its employee has failed to do any act required to be done or done any act required not to be done or otherwise done a discriminatory treatment shall not be deemed to be limited to this Section only; and such person may institute an action, whether individually or jointly, on behalf of him/herself or other shareholders, as well, to have any remedy available under other prevailing law.

(6) Where a collective remedy is demanded pursuant to Subsection (5), the court may issue the appropriate order with or without making necessary inquiry into some or all shareholders of that class.

(7) Notwithstanding anything contained elsewhere in this Act, where the court has issued an order in a manner that the company shall not make any amendment to its memorandum of association or articles of association or shall make an amendment to any specific matter for the protection of the rights and interests of any or all shareholders, in such a case, no amendment shall be made to the memorandum of association or articles of association without obtaining prior approval of the Court.

(8) If a company makes any amendment to its memorandum of association or articles of association by or pursuant to an order of the Court under Sub-section (7), such amendments shall be deemed to be an amendment adopted by a special resolution in the general meeting of the company.

(9) The Office shall make entry of the following orders issued by the court pursuant to this Section in the company register:

(a) An order issued for the reduction of share capital of a company;

(b) An order issued requiring any amendment to the memorandum of association or articles of association of the company.

(10) The provisions of this Section shall also apply to any person who has not yet been registered as a shareholder of a company but the shares have already been transmitted to his/her name through legal procedures as if such person were a shareholder of the company.