The recognised trade union of Water Purifier Ltd. made an application before the Tribunal seeking order for investigation of the company on the ground that the company has defaulted the payment of dues of the workmen sin
CS Executive · Company Law and Practice · PYQS · December 2023
The recognised trade union of Water Purifier Ltd. made an application before the Tribunal seeking order for investigation of the company on the ground that the company has defaulted the payment of dues of the workmen since long and the business of the company is being conducted otherwise for a fraudulent or unlawful purpose. In response, the company objected to the application and claimed that the recognised trade union not being the members or creditors of the company has no locus standi to make such application and is liable for dismissal. Examine the admissibility of the application of recognised trade union submitted before the Tribunal seeking investigation of the company.
Answer & Explanation:
As per section 213 of the Companies Act, 2013, the Tribunal may order after giving a reasonable opportunity of being heard to the parties concerned that affairs of a company ought to be investigated. The Tribunal may also make such order on an application made to it by any other person or otherwise, if it is satisfied that the circumstances suggest that the business of the company is being conducted with intent to defraud its creditors, members, or any other person or otherwise for a fraudulent or unlawful purpose or in a manner oppressive to any of its members or that the company was formed for any fraudulent or unlawful purpose. Hence, the Companies Act allows any other person to make an application before the Tribunal if the circumstances so suggest. The objection of the company shall not be tenable and the application of the recognized trade union shall be admissible for appropriate order of the Tribunal.
Topics: Company Law
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