It was written in the Articles of Association that an employee shareholder after retirement has to surrender his shares. Mr. Dependable retired from the organization after serving 20 years in the Production Department. H

It is well settled that articles of association of a company constitutes a contract between the company and its members in respect of their rights. Section 10 of the Companies Act 2013 unambiguously provides that AOA binds the company and members to the same extent as if they respectively had been signed by the company and by each member. In the instant case, Mr. Dependable, a retired employee alleged that on his superannuation he was compelled to surrender his shares allotted to him during his employment which according to him tantamount to oppression and mismanagement. It was held that since AOA of the company provided that on ceasing to be an employee of company its shares had to be surrendered, the petitioner could not avoid obligation incurred by AOA to which he himself was a party. [Ram Saroop v. Hindustan Thompson Associates (P) Ltd]