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TAMIL NADU NATIONAL LAW SCHOOL

TIRUCHIRAPPALLI

B.A./B.COM LL.B. (HONS.)

SEMESTER VI, 2014–2015 BATCH

CORPORATE LAWS II : SYLLABUS

COURSE INSTRUCTOR:
M L SHANKAR KAARMUKILAN (MUKIL)
ASSISTANT PROFESSOR OF LAW
[2mukil@gmail.com]
[mukil@hush.com]
[Cell: 91787 41341]

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DINDIGUL MAIN ROAD, NAVALUR KUTTAPATTU, TIRUCHCHIRAPPALLI 620 009 INDIA
http://www.tnnls.ac.in

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CORPORATE LAWS II

INTRODUCTION :

The subject of Corporate Laws is taught in two parts, viz. Corporate Laws – I and Corporate
Laws – II, in semesters V and VI of the B.A./B.Com LL.B. (Hons) respectively. Corporate
Laws – I dealt with Promotion, Incorporation, interpretation of Company Constitution,
Raising of Finance and Prospectus, Allotment and Certificates, Membership,
Transfer/Transmission Shares, and Minority Protection and Adjudicatory Mechanism under
the Companies Act, 1956/2013. The course as part of the Corporate Laws – II paper is
designed with an aim to introduce the students to Corporate Management and Governance,
Role of Directors, Accountability of Board, Accounts, Distribution Rules and Audit,
Corporate Reconstruction and Winding Up under the Companies Act, 1956/2013.

The approach in studying Corporate Laws – II shall be critical, evaluative and comparative
while the standard shall be the needs of the Indian corporate world post liberalisation.
Corporate laws including the Companies Act, 2013 and other relevant Acts, various Rules,
Regulations, departmental circulars, clarifications, notifications etc. made thereunder and
their interpretation through case laws, scholarly theoretical material, journal review articles,
along with the materials on post liberalisation company law developments including the
review of company law by various Committees would form part of the study material. In
addition to the Companies Act, 2013, relevant provisions of legislations relating to
distribution, securitisation, securities market and foreign exchange management etc. will also
be discussed briefly.

OBJECT OF THE COURSE :

The aim of this course is to give the students functional understanding of Corporate
Management, Role of Directors, Accountability of Board, Debt Capital, Corporate
Reconstruction and Winding up. This being an undergraduate compulsory course, providing
basic understanding about the major discourses relating to the above mentioned areas from
the point of view of various stakeholders of the corporation will be in order.

LEARNING OBJECTIVES :

 To appreciate the role and responsibilities of Directors, Managing Directors etc. in a

company and the statutory requirements;

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 To develop an understanding of the working and accountability of the management

and to provide a thorough knowledge of the relevant provisions of the Companies
Act, 1956/2013;

 To appreciate the rules relating to distribution and accounting requirements;

 To understand and evaluate the position of members and creditors as regards scheme
of merger, demerger etc.; and

 To understand the process of winding up of a Body Corporate and to appreciate the

provisions of the Companies Act, 2013 relating to the winding up.

LECTURE PLAN FOR CORPORATE LAWS – II :

Units Title Approx. Number of Lectures

Unit 1 General/Board/Other 10
Meetings
Unite 2 Directors (Qualification, 20
Duties, Liabilities and
Remuneration)
Unit 3 Accounts, Dividend, and 10
Audit
Unit 4 Corporate Governance & 05
Management
Unit 5 Corporate Restructuring 15
(Mergers and Amalgamation
etc.)
Unit 6 Winding Up 10
EVALUATION SYSTEM :

The examination system of the University promotes constant monitoring and ensures
transparency of the evaluation methods. Keeping this in mind, University has adopted two
tiers of assessment method viz. Continuous assessment and mid and end-semester written
examination. Skills of reading, research analysis and writing will be assessed through project
work. Efforts will be made to ensure that the examination method is innovative and capturing
of student interest. In order to promote transparency and objectivity, detailed evaluation
report of project assignments as also answer scripts are given to students for their perusal.
The performance of the students in this course is assessed on the basis of 100 marks, which is
divided amongst Internal Assessment (30 marks), Mid semester examination (20 marks), and
End semester examination (50 marks).

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INTERNAL ASSESSMENT (30 MARKS) :

Internal Assessment is planned by the course teacher in her discretion but subject to the
relevant rules of the University. The division of marks for the same in this course is as
follows :

(A) Project Writing :

First Draft :

Relevance and significance of the topic : 1 mark

Literature review : 1 mark

Synopsis content : 1 mark

Chapterisation : 1 mark

Bibliography : 1 mark Total : 05 marks

Presentation :

Time management : 0.5 mark

Content, delivery, clarity of concepts and articulation : 2.5 marks

Use of authorities :1 mark

Answer to questions : 1 mark Total : 05 marks

Final Draft :

Content and Analysis : 6+6 marks

Extent of research and foot noting : 4 marks

Formatting and Bibliography : 4 marks Total : 20 marks

MID-SEMESTER EXAMINATION (20 MARKS) :

At the middle of the semester students will appear in the Mid-Sem Examination of one and
half hour and of 20 marks.

END SEMESTER EXAMINATION (50 MARKS) :

At the end of the semester students will appear (Subject to the rules of attendance) in End-
Semester exam for two and half hours and of 50 marks. Students are strongly advised to read

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the leading cases from the reports which would enable them to solve the legal problems in the
exams as most of the questions will be problem based. The Bare Act (without any
commentary or short notes or both) is allowed in the examination.

ACADEMIC HONESTY :

Plagiarism and Cheating are strictly prohibited. Plagiarism is defined as taking or using the
thoughts, writings, or inventions of another without acknowledging her. It also means using
direct quotations without quotation marks, as well as using the ideas of another without
proper credit. Ask the course instructor when in doubt. Cheating is defined as any intent to
deceive the instructor in her effort to grade fairly. Anything that can possibly effect the
fairness of grading is cheating, which includes, but not limited to, any collaborative,
mischievous, or disruptive or like behaviour. In this course, pay special attention to gleaning
information off the Internet, and do NOT pass it off as your own, or without proper citation.
Learn to paraphrase ideas in your own words. Do not purchase, borrow, or revise another
student's work. Do not ‘double dip’ an assignment you did in another class to turn it in for
this one. Students indulging in such activities shall be punished according to University rules.

NOTE: All students must keep their own copy of the bare Companies Act, 2013 as
amended up to date during the class hours.

COURSE DETAILS

UNIT 1 : GENEREAL/BOARD/OTHER MEETINGS

Frequency, convening and proceedings of Board/Committee meetings; Tele and video

conferencing of Board/Committee(s); resolution by circulation; minutes and evidence.
General meetings - kinds of meetings; law, practice and procedure relating to convening and
proceeding at general and other meetings – notice, quorum, proxy voting including e-voting,
resolutions, circulation of members’ resolution etc.; postal ballot; recording, signing and
inspection of minutes; Role of chairman. Distribution of powers of a company – division of
powers between Board and Shareholders; monitoring and management.

Cases:

 K. Meenakshi Amma v. Shree Vilas Press and Publications (P) Ltd. And others, (1992) 73
Comp. Cas. 285 (Ker – DB)

 Parmeshwari Prasad Gupta v. The Union of India, AIR 1973 SC 2389

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 Sikkim Bank Ltd. and others v. R. S. Chowdhury and Others, (2000) 102 Comp. Cas. 387
(Cal)

UNIT 2 : DIRECTORS (QUALIFICATION, DUTIES, LIABILITIES AND REMUNERATION)

Meaning; kinds; Appointment/reappointment; qualifications; disqualifications; remuneration;

vacation of office; retirement; resignation and removal; loans to directors; powers and duties;
liabilities; office or place of profit; role of directors; contracts in which directors are
interested; Managing and whole-time directors and manager.

Cases:

 Apple Valley Resort v. H. P. Electricity Board and Another, (2004) 118 Comp. Cas. 328
(HP)

 Burland v. Earle, (1902) AC 83 : (1900-03) All E R Rep. 1452

 City Equitable Fire Insurance Co., In Re, (1925) Ch. 407

 Dale & Carrington Investment P. Ltd. v. P. K. Prathapan, (2004) 54 SCL 601 (SC)

 Industrial Development Consultants Ltd. v. Cooley, (1972) 1 WLR 443

 M. J. Shivram v. State of Karnataka, (1995) 6 SCC 289

 Marble City Hospital and Research Centre (P.) Ltd. v. Sarabjeet Singh Mokha, (2010)
155 Comp. Cas. 13 (MP)

 Paramount Bio-Tech Industries Ltd. v. UOI, (2004) 120 Comp. Cas. 18

 Percival v. Wright, (1902) 2 Ch. 421

 Quarry Owners Association v. State of Bihar, (2000) 8 SCC 655

 Regal (Hastings) Ltd. v. Gulliver, (1967) 2 A.C. 134 (HL)

 Standard Chartered Bank v. Pakistan National Shipping Copn., (2003) 1 All E R 173
(HL)

 State of Andhra Pradesh and Another v. Andhra Provincial Potteries Ltd., (1973) 2 SCC
786

 State of Bombay v. Bandhan Ram Bhandani, (1961) 1 SCR 801

 Tapan Kumar Chowdhury v. ROC, (2009) 55 CLA 80

 Tarlok Chand Khanna v. Raj Kumar Kapoor, (1983) Comp. Cas. 12

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 UOI v. Morepen Laboratories Limited and Ors., (2005) 6 Comp. L. J. 315 (CLB)

UNIT 3 : ACCOUNTS, DIVIDEND AND AUDIT

Accounts :

Books of account; Persons responsible for accounts; preparation, presentation, finalisation,

authentication, publication, circulation and filing of accounts; and Board’s Report

Dividend :

Concept of Profit and Divisible Profit; Payment of Dividends; Sources; Provision for
Depreciations; Declaration and payment of Dividends; and Power to declare dividend.

Audit :

Meaning and significance; qualifications and disqualifications of auditors; Appointment and

removal of Auditors; Rights, Duties and Liabilities of Auditor; Audit Committe – Origin,
significance and scope.

Cases:

 Ammonia Soda Co. Ltd. v. Chamberlain, [1918] 1 Ch 266

 N. V. Vakharia v. Supreme General Film Exchange Co. Ltd., (1948) 18 Comp. Cas. 34

 Lalita Rajya Lakshmi v. Indian Motor Co. Ltd., (1962) 32 Comp. Cas. 207

 Delhi Stock Exchange Association Ltd. v. I.T. Commissioner, AIR 1997 SC 2095

 Southern Roadways v. CIT, (1981) 51 Comp. Cas. 513

 Dimbula Valley (Ceylon) Tea Company Ltd. v. Laurie, [1961] Ch. 353

 Exchange Banking Company, Flitcroft’s Case, In Re, (1882) 21 Ch. D. 519

 Foster v. New Trinidad Lake Asphalt Company Ltd., [1901] 1 Ch. 208

 Lee v. Neuchatel Asphalte Co., (1889) 41 Ch. D. 1

 Wood v. Odessa Waterworks Co., (1889) 42 Ch. D. 636

Other materials:

John F. Meck, Jr., Accrued Dividends on Cumulative Preferred Stocks: The Legal Doctrine,
55 (1) HARV. L. REV. 71-112 (Nov. 1941).

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The Companies (Transfer of Profits to Reserve) Rules, 1975;

The Companies (Dividend of Profits to Reserve) Rules, 1975; and

Relevant rules under the 2013 Act.

UNIT 4 : CORPORATE GOVERNANCE

Meaning and Scope; Board Structure, its effectiveness and Corporate Governance;
Shareholderism v. Stakeholderism; Corporate Governance and the Companies Act, 1956 –
Over view of Internal Control, Independent Directors and Audit Committee, Remuneration
Committee, Nomination Committee; Board of Directors and its role, Directors’
Responsibility Statement;

Financial and other indicators of Going Concern status; Related party transactions and
disclosures; Evaluation of key financial decisions and disclosures; Cost Audit; and Clause 49
of the Listing Agreement.

UNIT 5 : CORPORATE RESTRUCTURING – MERGERS AND AMALGAMATION ETC.

Arrangement and reconstruction; Powers of court; Amalgamation and mergers; Takeovers;

Demergers and Reverse Merger.

Cases :

 Central Bank of India v. Roofit Industries Ltd., (2004) 51 SCL 261

 CWT v. Mahadeo Jalan, (1972) 86 ITR 621

 G. V. Films Ltd., In re, (2009) 150 Comp. Cas. 415 (Mad)

 Hari Prasad Jyantilal & Co. v. V. S. Gupta, Income Tax Officer, Ahmedabad and
Another, AIR 1966 SC 1481

 Hindustan Lever Employees’ Union v. Hindustan Lever Ltd., (1994) 4 Comp. L. J. 267
(SC)

 IBA Health (India) P. Ltd. v. Info-Drive Systems Sdn. Bhd., (2010) 155 Comp. Cas. 323
(Kar)

 Jagran TV P. Ltd., In re, (2009) Comp. Cas. 150 (All)

 Krishna H. Bajaj v. Sesa Industries Ltd., (2009) 152 Comp. Cas. 43 (Bom)

 Meghal Homes P. Ltd. v. Shreeniwas Girni K.K. Sanity, (2007) 78 SCL 482

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 Miheer H. Mafatlal v. Mafatlal Industries, AIR 1997 SC 506

 Nu-Line India P. Ltd., In re, Swati Storewel P. Ltd., In re, & Sturdy Industries Ltd., In re,
(2010) 155 Comp. Cas. 186 (HP)

 Rajeev S. Mardia & Rasik S. Mardia, In re, (2010) 153 Comp. Cas. 306 (Guj)

 Ramco Super Leathers Ltd. v. Dhanlakshmi Bank Ltd., (2009) 152 Comp. Cas. 437
(Mad)

 Reliance Industries Ltd., In re, (2009) 151 Com. Cas. 124 (Bom)

 S.K. Gupta and Another v. K.P. Jain and Another, AIR 1979 SC 734

 Sequent Scientific Ltd. In re, (2009) 151 Comp. Cas. 1 (Bom)

 State of West Bengal v. Pronob Kumar Sur, (2003) 44 SCL 1

 Union of India v. Ambalal Sarabhai Enterprises Ltd., (1984) 55 Comp. Cas. 623

 Vinay Metal Printers P. Ltd., In re, (1997) 14 SCL 26

 Vishnu Chemicals P. Ltd., In re, (2002) 35 SCL 459 (AP)

 Wood Polymer Ltd., In re, (1977) 47 Comp. Cas. 597

UNIT 6 : WINDING UP

Meaning; Modes – voluntary, compulsory; Insolvency Professional – Powers and duties;

Procedure; Consequences; Dissolution.

Cases :

 Allahabad Bank v. ARC Holding Ltd., (2000) 28 SCL 394

 Aluminum Corporation of India Ltd. v. M/s. Lakshmi Rattan Cotton Mills Co. Ltd., AIR
1970 All 452

 Asea Brown Boveri Ltd. v. Boving Fouress Ltd., (2003) 47 SCL 554 (Kar)

 Brown Forman Mauritius Ltd. v. Jagajit Brown Forman (I.), (2004) 51 SCL 214 (Delhi)

 Canara Bank v. Arihant Industries Ltd. (2002) 38 SCL 82

 Central Bank of India v. State of Kerala, (2010) 153 Comp. Cas. 497 (SC)

 Color Coats v. Venkataramana Hotels Ltd., (1998) 16 SCL 345

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 European Metal Recycling Ltd. v. Blue Engineering P. Ltd., (2010) 154 Comp. Cas. 35
(Del)

 In Re German Date Coffee Co., (1882) 20 Ch. D. 169

 In Re Yenidje Tobacco Co. Ltd., (1916) Ch. 426

 In re, Kaithal and General Mills Co. Ltd., (1951) 31 Comp. Cas. 461

 Indian Seamless Steel & Alloys Ltd., In re, (2002) 35 SCL 894

 Jumgo Cotton Enterprises v. Rayalaseema Mills Ltd., (2009) 150 Comp. Cas. 203 (AP)

 K. S. Mothilal v. K.S. Kasimaries Ceramique P. Ltd., (2004) 50 SCL 116

 Kapil N. Mehta v. Shree Laxmi Motors Ltd., (1999) 19 SCL 420

 Kotak Mahindra Bank Ltd. v. Subhiksha Trading Services Ltd., (2009) 152 Comp. Cas.
165 (Mad)

 M. Mohan Babu. v. Heritage Foods P. Ltd., (2002) 37 SCL 490 (AP)

 Madhusudan Gordhandas & Co. v. Madhu Woollen Industries P. Ltd., (1972) 42 Comp.
Cas. 125

 Madhya Pradesh Iron & Steel Co. v. Sikands Ltd., (2005) 64 SCL 162

 Mohanlal Bhanjibhai Mehta v. Chunilal B. Mehta, 1964 32 Comp. Cas. 970 (Guj)

 Murlidhar v. Bengal Steamship Co., AIR 1920 Cal 722

 N. Sundaraswamy v. Bangalore Turf Club Ltd., (1999) 21 SCL 90

 Naresh Nath Mukherjee (Shipping) P. Ltd. v. Triton Container International Ltd., (2009)
152 Comp. Cas. 293 (Cal)

 Navjivan Trading Finance Pvt. Ltd., In re, (1978) 48 Comp. Cas. 402 (Guj)

 Pundra Investments & Leasing Co. P. Ltd. v. Petron Mechanical Industries P. Ltd., (2000)
23 SCL 220 (Bom)

 R. Sabapathy Rao v. Sabapathy Press Ltd., AIR 1925 Mad 489

 Ranbaxy Laboratories Ltd. v. M. S. Shoes East (I) Ltd., (1997) 26 CCA 202 (Del)

 ROC v. Bihar Wire & Wire Products P. Ltd., (1975) 45 Comp. Cas. 194

 Seth Mohan Lal v. Grain Chambers Ltd., AIR 1968 SC 772

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 Subhas Agarwal, Prop. of M/s. Ankit and Co. v. Bijoy Nagar Tea Co. Ltd., (2010) 154
Comp. Cas. 428 (Cal)

 TRS Forms and Services P. Ltd. v. Eduquity Technologies P. Ltd., (2010) 153 Comp.
Cas. 321 (Kar)

 UBI v. Official Liquidator, (2000) 25 SCL 431 (SC)

REFERENCES

STATUTORY MATERIALS :

 The Companies Act, 1956.

 The Companies Act, 2013.

 The Preference Shares (Regulation of Dividends) Act, 1960.

 The Securities Contracts (Regulation) Act, 1956.

 The Securities and Exchange Board of India Act, 1992.

 The Competition Act, 2002.

 The Insolvency and Bankruptcy Code, 2016.

COMMITTEE REPORTS :

 Cohen Committee Report, 1948.

 Jenkins Committee Report, 1962.

 Cadbury Committee Report, 1991.

 Derek Higgs Committee Report, 2003.

 Kumara Mangalam Birla Committee Report, 2000.

 Narasimhan Committee Report,

 Naresh Chandra Committee Report, 2002.

 JJ Irani Committee Report, 2002.

 Vaish Committee Report, 2005 (Report of Expert Group on Stream Lining [of]
Prosecution Mechanism under the Companies Act, 1956.).

BOOKS :

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 C.R. Dutta on Company Law.

 R.R. Pennington’s Company Law, Butterworths.

 LCB Gower, Principles of Modern Company Law, Sweet and MaxwellLondon.

 Susan Barber – Company Law.

 S.M. Shah – Lectures on Company Law, N.M. Tripathi, Mumbai.

 Majumdar and Kapoor, Company Law and Practice, 22nd ed., Taxman, 2017.

 Nicholas Bourne on Principles of Company Law, 3rd ed., Cavendish Publishing Ltd.,
1998.

 Palmer’s Company Law, Stevens, London.

 A. Ramaiya, Guide to the Companies Act, 18th ed., Wadhwa, 2016 with September
supplement.

 K.R. Chandratre, Lectures on Company Law, Bharat Law House.

IMPORTANT NOTES:

1. The cases listed above are not exhaustive. The students are required to research
and study other relevant cases.

2. The students are required to study the legislations and consult the latest editions
of books.

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