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No case of oppression if directors were appointed as per articles and property of co. was sold above registered value

May 9, 2018[2018] 93 49 (NCLT- Chennai )/[2018] 207 COMP CASE 211 (NCLT- Chennai )

CL: Where petitioner Managing Director of R1 company alleged that appointment of R2 and R4 as directors in R1 company was illegal, and prime property of R1 company had been sold at loss, however it was found that appointment of directors was as per articles of association of company, and prime property of R1 company had been sold at more than registered value of property, no case of oppression and mismanagement in affairs of R1 company was made out

CL: Provisions of section 274(1)(g) cannot be used to disqualify directors from existing company, but can only used to disqualify directors of defaulting company from becoming directors in any other public company

CL: Where Articles of association of company authorised managing director to carry on management of affairs of company and board of directors of company had not restrained managing director from performing any particular act or function in management of business of company, it could be safely concluded that managing director was empowered to sell property and for every genuine sale transaction managing director need not obtain permission of shareholders

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