In the course of Secretarial Audit, you discovered that the shareholders of Rajesh Agro Ltd. removed one director X in the Extra-ordinary General meeting held on 27th February, 2018 and the Board of directors of the comp

The Companies Act, 2013 does not contain any provision for forfeiture of fully paid up shares. But, the companies normally make the provisions in the Articles of Association along with the procedure for forfeiting the shares only when the shares have already been allotted and not fully paid-up to the full extent of the face value and premium, if any. Even assuming the directors were authorized to cancel the shares, the said directors of the Company cannot utilize their fiduciary powers over the shares purely for the purpose of cancellation of the shares of the minority shareholders to improve their voting power. They cannot be allowed to exercise such powers which might have been delegated by the company to the Board. There was no authority with the Directors to forfeit the fully paid shares of the removed director X. The whole action is completely illegal, null and void.