Removing Managing Director
Querist :
Anonymous
(Querist) 18 December 2009
This query is : Resolved
After following Section 283 of Companies Act 1956, majority of the share holders removed managing director of a Pvt. Ltd. Company. Surprisingly, managing director got an mandatory injunction from District Court that he cannot be removed from the post as he is having agreement for the post of managing director with Directors under Arbitration Act 1995. Also the District Court is delaying the process for more than two months as a result managing director is misusing his power and money and company will become sick. Please suggest me with case reference so that we can dispose of the case early.
Thanking you.
Guest
(Expert) 18 December 2009
Its really very very interesting and complicated query. You can challenge the order of injunction and get it reversed. I personally feel that the civil courts should exercise utmost restraint in interfering with corporate matters as the Company Law Board can look into the issue. You need to pursue the matter carefully and you can certainly certainly challenge the order of injunction. Regarding misuse of power, you can approach the Company Law Board seeking restraint of exercising powers and the pendency case before the civil court may not bar the Board in entertaining your application provided you qualify to approach the Board.
