Due to inadequacy of profits, the Board of directors of Rise Ltd. decided not to recommend any dividend for the financial year ended 31st March, 2015. Certain shareholders of the company complained to the Company Law Boa

Section 241 of the Companies Act, 2013 (Sec. 398 of the Companies Act, 1956) provides for relief in cases of mismanagement. For a petition under this section to succeed, it must be established that the affairs of the company are being conducted in a manner prejudicial to the interest of the company or public interest or that, by reason of any change in the management or control of the company, it is likely that the affairs of the company will be conducted in that manner. If the court (CLB/Tribunal) is convinced, it may with a view to bringing to an end of preventing the matter complained or apprehended, make such order as it thinks fit. It was held in the case of Indowind Energy Ltd. v. ICICI Bank Ltd. [2010] 153 Com Cases 394 (CLB) that non-declaration of dividend would not amount to oppression and mismanagement. Therefore, applying the above facts and precedent in the given case, it can concluded that the non-payment of dividend does not amount to mismanagement and hence the contention of the shareholders shall not be tenable.