Corporate Law Cases and Concepts Quiz

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Questions and Answers

What was the maximum remuneration cap before it was reduced in Apollo Tyres Limited's case?

12% of PBT

15% of PBT

10% of PBT (correct)

7.5% of PBT

In the context of Foss v. Harbottle, who is considered the proper party to bring an action regarding a wrong committed to a company?

The company itself (correct)

Minority shareholders

Individual shareholders

The board of directors

What issue was raised in the case of Glass v. Atkin regarding individual shareholder rights?

Right to sue other shareholders

Right to demand higher dividends

Right to enforce individual rights against the company (correct)

Right to have unfair resolutions revoked

Which case highlights the concept of fraud against minority shareholders in the context of resolutions?

Menier v. Hooper’s Telegraph Works Signup and view all the answers

What was the voting requirement for the resolution in Edwards v. Halliwell?

Special majority Signup and view all the answers

What was the primary legal issue in Nagappa v. Madras Race Club?

Loan provision without security Signup and view all the answers

Which case demonstrates the principle that majority shareholders can act in ways that disadvantage minority shareholders?

Menier v. Hooper’s Telegraph Works Signup and view all the answers

What was the initial regulation concerning loan provisions as stated in the Articles of Association (AOA) of the company in Bharat Insurance Ltd. v. Kanhya Lal?

No loans without security Signup and view all the answers

What ensued from the actions of the promoters in the State of Punjab regarding the money circulation scheme?

The scheme was unworkable and falsely represented. Signup and view all the answers

In the case of Parminder Kaur v. State of UP, what factor was notably absent that negated the charge of forgery?

No indication of the school's recognition was present on the certificate. Signup and view all the answers

What constitutes a document as forged according to Mohd. Ibrahim and others v. State of Bihar?

Alteration must be made for personal gain. Signup and view all the answers

What was the conclusion regarding the false sale deed executed with honest intentions as discussed in the context of Ramautar Chaukhany v. Hair Ram?

It was not considered an instance of cheating. Signup and view all the answers

According to the Commissioner of Wealth Tax v. G.D. Naidu, which of the following is NOT an essential requisite of a debt?

An obligation that is possible to deny. Signup and view all the answers

In the case SEBI vs. Kanaiyalal Patel, what was the role of the portfolio manager related to the accused?

He had familial ties to the accused. Signup and view all the answers

What allegation was made against AGL in the case involving Faridabad Industries Association?

They grossly violated investment regulations. Signup and view all the answers

What essential condition must be met for an act to be classified as dishonest and fraudulent in the context of transfer of property?

The transfer must lack adequate consideration. Signup and view all the answers

What constitutes oppressive conduct in relation to the board's decision-making?

Non-declaration of dividends without justification Signup and view all the answers

In the case of Dale and Carrington Investment, what is the implication of increasing share capital solely for control?

It amounts to oppression of minority shareholders Signup and view all the answers

What must directors ensure when exercising their discretion regarding the transfer of shares?

They must act reasonably and in good faith Signup and view all the answers

What is indicated by the term 'intent to deceive' in the context of fraud?

It suggests a desire to mislead someone for personal advantage Signup and view all the answers

Which of the following best describes the legal heirs' rights in share transmission?

They gain rights automatically upon the shareholder's death Signup and view all the answers

According to the case K.S.Mothilal v.K.S.Kasimaris Ceranique, what must happen for heirs to be registered?

They must have the will probated Signup and view all the answers

What effect can the illegality of an action have in the context of corporate governance?

It can affect the perceived oppressiveness of the action Signup and view all the answers

In the context of member complaints regarding oppression, what role does membership play?

Only members can complain in their capacity as shareholders Signup and view all the answers

What was Carlos Ghosn arrested for concerning Nissan?

Understating his compensation by more than $80 million. Signup and view all the answers

What controversial practice did Under Armour Inc. end in 2018?

Employee trips to strip clubs. Signup and view all the answers

What should executives avoid when engaging in corporate social activities?

Engaging in offensive social activities. Signup and view all the answers

What was the public's response to Lockheed Martin's social media engagement?

Criticism highlighting the impact of its weapons. Signup and view all the answers

Which of the following statements accurately reflects the implications of Section 300 of the CrPC?

Once acquitted, a person cannot be retried for the same offence or related offences. Signup and view all the answers

What aspect of corporate management is illustrated by the actions of Nissan?

Poor judgment in executive conduct. Signup and view all the answers

What rationale did the High Court use to refuse the petition of the wife of the deceased managing director?

She was considered liable as a director during the proceedings. Signup and view all the answers

According to the apex Court, what is unnecessary during various stages of the criminal justice process?

Providing detailed reasoning for initial charge framing. Signup and view all the answers

Which company's executives faced criticism for their judgment regarding employee activities?

All of the above. Signup and view all the answers

What does the phrase 'procedural law is not to be a tyrant but a servant' imply about justice?

Justice should not be impaired by overly strict adherence to procedure. Signup and view all the answers

What significant element is lacking in the corporate response to crises as exemplified by Nissan’s situation?

Proactive ethical considerations. Signup and view all the answers

In the context of liability, what duty does a director have upon the death of the managing director?

Continuing liability for the company's compliance requirements. Signup and view all the answers

What fundamental issue does the link between obesity and diet reflect?

The complexity of health and lifestyle choices. Signup and view all the answers

What is the implication of the court's stance on detailed orders during the criminal justice process?

Only essential decisions and prima facie cases are necessary. Signup and view all the answers

How does the R.S. Nayak vs. A.R. Antulay case relate to the concept of liability in corporate governance?

Directors can be held liable for their roles irrespective of the managing director's status. Signup and view all the answers

What common misconception does the statement about detailed orders in criminal justice cases address?

Legal processes can function correctly without elaborate documentation. Signup and view all the answers

What should the Magistrate ensure if the accused cannot understand the language of the evidence presented?

The evidence must be interpreted in a language the accused understands. Signup and view all the answers

Which of the following statements about clubbing of cases is true?

Offences can be clubbed if they are connected and part of the same transaction. Signup and view all the answers

In the case of Nutech Agros Ltd. vs. Mohan Rao, why was the summons quashed?

The court found that opening a special account was not necessary. Signup and view all the answers

What did the Court rule in the case of Falcon Tyres Ltd. vs. Mohan Rajan regarding juristic persons?

The complainant being a juristic person does not exempt them from court presence requirements. Signup and view all the answers

What powers does a Magistrate have when the complainant fails to appear in court?

The Magistrate has the power to acquit the accused due to the absence. Signup and view all the answers

Under what condition can the accused plead to drop the trial according to the law?

If the accused believes the process against him was unwarranted. Signup and view all the answers

What is a requirement for the process of summoning documents in a case?

The documents must be relevant to proving the accused's guilt. Signup and view all the answers

What does the term 'juristic person' refer to in legal contexts?

A legal entity that can participate in a court of law. Signup and view all the answers

Study Notes

Shareholder Democracy

Apollo Tyres Limited: Minority shareholders rejected the reappointment of the Managing Director due to increased remuneration despite losses. Remuneration capped at 7.5% of Profit Before Tax (PBT). Previously, it was 10%.
Foss v. Harbottle: A member cannot sue the directors for a wrong committed against the company. The company itself should initiate action.
Bharat Insurance Ltd. v. Kanhya Lal: A company's articles of association specify that loans must be secured. But without security, the company granted a loan. The Foss v. Harbottle principle applied.
Nagappa v. Madras Race Club: An individual shareholder can enforce their rights against the company, including voting rights, recording votes, and director candidacy.
North-West Transportation Co. v. Beatty: Resolutions passed at duly convened general meetings, regarding matters within the company's jurisdiction bind the minority and the company.
Menier v. Hooper's Telegraph Works: Majority shareholders of company A who are also shareholders of company B, passed a resolution in favour of B, but against A. This was considered a fraud on minority shareholders of A.
Ashbury Railway Carriage and Iron Co. v. Riche: Company powers are limited by its memorandum and articles of association. Actions outside those limits (ultra vires) are not valid.
Glass v. Atkin: Company assets were used for personal gain by controlling individuals.
Edwards v. Halliwell: Resolutions were required to have a special majority, but were passed by a simple majority.
ICICI v. Parasrampuria Synthetic Ltd: Applying the Foss v. Harbottle rule to Indian corporations is inappropriate, as Indian corporations are predominantly funded by financial institutions (at least 80%).

Corporate Dispute

Shanti Prasad Jain v. Kalinga Tubes Ltd.: "Oppression and mismanagement" (O&M) definition not precisely defined. Continuous, harsh, burdensome and wrongful conduct is needed, mere lack of confidence is not enough.
Rajahmundry Electric Supply Corporation v. A. Nageswara Rao: Gross mismanagement by a vice-chairperson, drawing large personal funds led to the appointment of administrators for 6 months to manage the company
Vasudev P Hanji v. Ashok Ironworks Pvt. Ltd: Declaration of dividend is left to the board's collective decision.
Dale v. Carrington: Share capital increase only to gain control of a company is considered oppression and mismanagement.
Rajkumar v. Jai Mahal Hotels Pvt. Ltd.: Share-holding transitions after death (transmission), to reduce heir share to become a minority, was deemed O&M.
Chandra Krishan Gupta v. Pannalal Girdhari Lal Pvt. Ltd: Non-availability of Records, Non-Holding of Meetings isn't considered O&M
K. S. Mothilal v. K. S. Kasimaris Ceranique (P.) Ltd.: Legal heirs registered on probate or will can also apply.
Asha Purandare v. Integrated Controls (P.) Ltd.: Minor typographic omissions aren't sufficient cause for O&M.
Indian Chemical Products Ltd. v. State of Orissa: The right under article 11 to refuse registration of a transfer is discretionary, but should be exercised reasonably and in good faith, so courts can review capricious or dishonest acts.

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Description

Test your knowledge on significant corporate law cases and principles. This quiz covers important legal concepts, corporate governance issues, and landmark cases involving shareholder rights and responsibilities. Challenge yourself with questions based on landmark rulings and their implications for shareholders.