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Gulshan Prakash v. State of Haryana (2010) 1 SCC477

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Gulshan Prakash v. State of Haryana (2010) 1 SCC 477||Case Summary  Introduction  In this appeal, the Court has interpreted Article 15(4) of the Fundamental Right. It has been added by the 1st Amendment Act, of 1951. Facts The State of Haryana instructed Maharshi Dayanand University (MDU), Rohtak to conduct entrance examination for MD/MS/PG courses for the Session 2008-2009. The appellant made a representation to the Health Secretary for providing reservation for SC and ST in the Post Graduate courses, Since there was no response from the Health Secretary the Appellant filed a petition in the High Court.  The High Court dismissed the petition of the appellant therefore the appellant approached the Supreme Court by Special Leave Petition under Article 136. Appellant Contentions  MDU, Rohtak has provided 20% reservation for the graduate level courses or undergraduate courses therefore the said University should also provide reservation in for the PG courses.  The Government o
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Cotman v. Brougham [1918-19]

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 Cotman v. Brougham Case Summary  Introduction A very interesting case in the Court in which, a company in its object clause of MoA mentioned various acts in respect of making itself capable to involve in almost any kind of businesses. Though after registration of MoA incorporation certificate is to be issued by the registrar which becomes a conclusive evidence. But what if the MoA not complying the Act registered by the registrar, and incorporation certificate issued by the registrar. In this case the Court had been dealt with all these issues.   Facts The Essequibo Rubber and Tobacco Estates Ltd. (E. company) registered under Companies (Consolidation) Act, 1908.  The E. company underwrote and took up shares in another company the business of which was not connected or mentioned in its objects.  When the other company went on to liquidation, the E. company which was also on liquidation, was placed in list B of contributors in respect of 14000 pounds due upon those shares.  To remove i
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Erlanger v. New Sombrero Phosphate Co. (1878)

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Erlanger v. New Sombrero Phosphate Co. [1878] Introduction This case is related to Section 2(69) which deals with the promoters of a company.  Fact The appellant along with one 'Thomas Westall' wanted to buy the lease of the island of West Indies, from the official liquidator of the company named "Old Sombrero Ltd." For this purpose, they formed a syndicate and the members of syndicate purchased the lease of the island from the official liquidator for £ 55,000, later on syndicate formed Joint Stock Company to resell this island for £110,000 which might afford them profit. The director of the company was directly or indirectly connected with members of syndicate. The directors were empowered to adopt and carry into effect the contract for the assignment of the Island of Sombrero. In the first general meeting, without any inquiry into facts and figures the sell of island was ratified. After a time the company was wound up and as per the advice of counsel, Co
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Royal British Bank v. Turquand (1843-60)

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 Royal British Bank v. Turquand (1843-60)  Introduction   The doctrine of Indoor Management also known as "Turquand rule"  originated from the case  " Royal British Bank V Turquand, 1843-60.  In this case we will see how an innocent bank has been saved by the judges by following Doctrine of Indoor management.  Facts   The Company named  " Cameron’s Coalbrook Steam, Coal, and Swansea "  London Railway Company, had borrowed money from " Royal British Bank"   by issuing a bond which had signed by two directors under the seal of the company.The  bank after reading memorandum of association and article of association  presumed that required resolution had been passed by the company and therefore gave amount.  Later on, when the company wound up process started, the bank asked for their payment which has been denied by official liquidator of the company on the ground that provisions mentioned in article of association had not followed by the com
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Re Introductions, Ltd. Introductions, Ltd. v. National Provincial Bank Ltd. [1969]

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Re Introductions, Ltd. Introductions, Ltd. v. National Provincial Bank Ltd. [1969] Case Summary Introduction  A bank with full knowledge of the objects and power mentioned in the MoA of a company provided a sum of credit. On a simple reading of the clause of MoA, the bank satisfied itself that the company is empowered to borrow but they further did not enquire and provide credit to the company. The Court observed that the clauses of the MoA based on which the bank gave the loan were not an object but only a power, and that should be used for the particular purpose or object mentioned in the MoA. The power to borrow can not be an object of a company. Facts   The appellant company was incorporated in 1951 to provide facilities for British festivals to people who come from abroad. Subsequently, for some years, the company connected its business with deck chairs at a seaside resort. In 1961 the company transferred its share and elected a new board who decided to be involved in the
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In re (Jon) Beuforte (London) Ltd. (1953)

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Introduction This case is related to the "Doctrine of Ultra vires" which states that a company cannot perform act beyond the scope of its stated objects in the "Memorandum of Association".  Facts   A company was authorized by the memorandum to carry on the business of costumiers, gown making, and other activities ejusdem generis  (of the same kind). The company decided to undertake the business of making veneered panels and for this purpose, the company made three contracts with  Grainger Smith & Co. (Builders) Ld. to construct a factory. John Wright & Sons (Veneers) Ld. to supply veneers Lowell Baldwin Ld. to supply coke The three creditors filed a suit in court when their demand for respective payments failed. The company consented, in court, to pay them in different installments. But again the company failed to pay. Later when the company went on to liquidation, all three creditors filed their proof to recover their respective payments. The li
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Ashbury Railway Carriage and Iron Co. Ltd. v. Riche (1875)

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Ashbury railway carriage v riche|| Case Summary  Introduction   This case is related to the " Doctrine of Ultra Vires". In this case, the directors of the appellant company made an agreement with the plaintiff which was beyond the objectives, as mentioned in its MoA, of the appellant Company. Since the agreement was beyond its objectives, the appellant company repudiated the agreement later. Therefore the suit was brought by the plaintiff to recover the damages. Facts   The directors of the appellant company (Ashbury Railway Carriage) had contracted to obtain a concession from Gillon and Poeters Baerston, who obtained this right from the Belgian Government, to make a railway.  For this purpose, the directors of the appellant company again entered into a contract with Riche, a contractor, the purpose of which was to establish a société anonyme,  and as the plaintiff went on with the work, the appellant company had to pay into the hands of société anonyme,  Earlier the sharehol
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Workmen v. Associated Rubber Industry Ltd. (1985)

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Introduction This case is related to the Lifting of The Corporate Veil.    Facts The Workmen (P) of the respondent company (Associated Rubber Industry Ltd.) claimed for a bonus of 16% for the year 1969 which had been reduced to 4% by transferring the shares of INARCO Ltd. to its subsidiary company (Aril Holdings). The shares had been earlier bought by the respondent company. The dividend earned from the shares were mentioned in the account of the respondent company and also were calculated for the bonus given to the workmen of the respondent company.  Workmen contention  In order to avoid payment of higher bonus, the Rubber Industry had created a subsidiary company and transferred the shares of INARCO Ltd. to it. Respondent Contention   We did not create this subsidiary company to avoid payment of bonus to the workmen . The Aril Holdings (subsidiary company) was amalgamated with the Rubber Industry in 1971. This circumstance shows that initial creation was not a device of a
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TELCO(Tata Engineering and Locomotive Co.) Ltd. v. State Of Bihar, 1964

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  INTRODUCTION This case talks about the "lifting of the veil of corporate/company" to ensure the rights or liabilities of the shareholders of a company/corporation as it is an agent of the shareholder. FACTS The company was registered in Bombay and involved in the business of manufacturing diesel trucks, buses, and spare parts and accessories at Jamshedpur, Bihar. He used to distribute and sell his products to different dealers who are located in different states of the country. A sales tax was being demanded by the sales tax Authorities of different states. Two shareholders of TELCO Ltd., the petitioner joined a writ petition filed by State Trading Corporation under Article 32 of the Constitution of India(CoI).  Petitioner's Contentions The transactions done by the Company were inter-State sales and therefore as per Article 268 of the Constitution, it had been prevented from being taxed by the State authorities. The imposed tax breaches the Fundamental Right to Propert
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State Trading Corporation v. CTO, AIR 1963

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State Trading Corporation v. CTO, AIR 1963 Introduction This case will tell us about the position of the company, as we know the company is a legal person but along with it we will understand in the present case that  Whether the company is a citizen of the Country where it has been registered. And as a citizen whether the company will be entitled to get the fundamental right of a Citizen. So get ready to grab a new understanding of the Company.  Facts   The appellant is a private Ltd. company registered under the Indian Companies Act, 1956 and the second petitioner is a shareholder in the first petitioner (appellant) company. The appellant went to the court under Article 32, CoI along with K.B Lal to quash the proceeding which has imposed by the Andhra Pradesh and Bihar governments' commercial tax officer and also quash the notice of demand issued for payment of the sum assessed. Appellant  contentions Claimed to be " Indian citizen"   as all of its shareholders
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Lee v. Lee’s Air Farming, Ltd. (1960)

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Introduction This case is of " Newzealand "  related to "Separate  legal entity " has an indispensable role in the Indian company's act to understand the concept of the distinct personality of the Company.  Facts of the Case   'L' formed the respondent company to carry on the business of aerial top-dressing.  The nominal capital of the company was 3,000 pounds. 'L' was allotted 2,999 shares and he was appointed governing director of the respondent company and under Article 33 of the articles of the association was employed as chief pilot of the company. 'L' exercised full and unrestricted control of the company affairs. A different form of insurance cover for the benefit of the respondent company and certain personal accident policies were taken out in favor of 'L', who was a duly qualified pilot. L was killed while piloting the aircraft during aerial top dressing. The appellant claimed compensation under "the New
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Salomon v. Salomon & Co., Ltd. (1897)

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Salomon & Salomon Co. Ltd. || Case Summary  Introduction   This case is mainly concerned with the "Independent legal personality" or "Separate legal entity" of the company. The facts of the case  The appellant, Aron Salomon, carrying on a business as a leather merchant and boot manufacturer, formed a company named "Salomon and Co. Ltd"  to carry on the business. The subscribers to the memorandum of the association were the appellant, his wife, daughter, and four sons. The nominal capital of the company was £40,000 of which 20,007 shares were issued, the appellant had 20,001 shares and other subscribers had one share each. Salomon sold his business to the newly formed company "Salomon and Co. Ltd." for £38,782. In return, the Company paid the appellant £6,000 in cash and £10,000 in debenture as decided by the directors of the company consisting of the appellant and his two sons. In 1893 an order was made to wind up the company. As it was indeb
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