Question

Which relief is not among those that may be sought in a class-action or oppression/mismanagement application to the Tribunal?

• A. Restraining the company from acting on a resolution obtained by suppression or misstatement of material facts
• B. Declaring void any alteration of memorandum procured by fraud
• C. Ordering the company’s immediate deregistration without hearing the company
• D. Claiming damages or compensation from directors for fraudulent or unlawful conduct

Hint:

Even in oppression cases, natural justice cannot be bypassed.

Answer 1

The Correct Option is C

Step 1: Powers of the Tribunal.
Under the Companies Act, 2013, the Tribunal is empowered to grant wide remedial reliefs in cases of oppression, mismanagement, and class actions.
Step 2: Principles of natural justice.
Any drastic action such as deregistration cannot be ordered without granting an opportunity of hearing to the company, as it would violate principles of natural justice.
Step 3: Validity of other reliefs.
Restraining resolutions obtained by fraud, declaring fraudulent alterations void, and awarding compensation against directors are recognized remedies.
Step 4: Conclusion.
Therefore, option (C) is not a permissible relief.