The Articles of Association of DF Ltd. were amended on 1st January 2020 to insert a new Article providing that the service of the employee of the Company shall be terminated if he takes part in active politics. Ravi bein

The decision of the Company is not legally tenable as the Articles of Association cannot be altered so as to have retrospective effects. Since at the time when Ravi has filed the nomination papers for contesting elections in September, 2019, there was no provision in the Articles of Association of DF Ltd. to terminate the services of the employee of the Company on taking part in active politics. In the case of Pyare Lal Sharma v. Managing Director, J.K. Industries Ltd. (1989) 3 Comp LJ (SL) it was held that the articles only operate from the date of the amendment. The amended articles of association cannot operate retrospectively, but only from the date of amendment. Thus the Company's decision is not legally tenable.