CS Professional Resolution of Corporate Disputes, Non-Compliances and Remedies Classes

CS Professional Paper 6 — Resolution of Corporate Disputes, Non-Compliances and Remedies

This 100-mark paper covers the dispute resolution and enforcement ecosystem that surrounds corporate entities — from shareholder disputes within a company to SEBI enforcement actions against listed companies. For CS professionals in practice, understanding these mechanisms enables them to both prevent disputes through proper compliance and navigate remediation when disputes arise.

Corporate Dispute Resolution

• Oppression and Mismanagement — Sections 241–244, grounds for petition (oppression, mismanagement), standing to petition (minimum shareholding requirement — 10% or 100 members), NCLT orders available, Sections 242 and 244
• Class Action Suits — Section 245, who can file (members minimum 100 or 10%, depositors minimum 100 or 10%), against whom (company, directors, auditors, experts), orders available
• Prevention of Oppression by NCLT — Interim orders, appointment of administrator, change in board composition as NCLT remedy
• Related Party Transaction Disputes — Section 188, approval requirements, voidability of unapproved RPTs, derivative actions

Non-Compliance and Remedies

• Compounding of offences — Sections 441–443, RD (Regional Director) and NCLT compounding jurisdiction, compounding fee structure, procedure and application
• Condonation of delay — Section 460, Central Government powers for late filings beyond NCLT's powers
• MCA adjudication — Adjudicating Officer, penalty orders, appeals against AO orders
• Directorial penalties — Section 448 (false statements), Section 449 (false evidence), Section 447 (fraud — unlimited imprisonment up to 10 years)

SEBI Enforcement

• Investigation by SEBI — Sections 11, 11B, 11C, and 15I SEBI Act; interim orders, show cause notices
• SEBI consent and settlement mechanism — Settlement orders, terms, waiver of proceedings
• SAT (Securities Appellate Tribunal) — Jurisdiction, filing, timelines, appeals to Supreme Court

Alternative Dispute Resolution

• Arbitration and Conciliation Act 1996 — Domestic and international arbitration, arbitral award enforcement, court intervention limits
• Mediation — Institutional mediation, statutory mediation under Companies Act for scheme-related disputes
• Negotiation and collaborative law approaches in corporate disputes