CORPORATE LAW II

INTRODUCTION Although corporate law is a well-recognized subject in the legal curriculum and the title of a voluminous literature, its exact scope is not obvious since the word company has no strictly legal meaning. Corporate Law plays an important role in any law school and forms an important ingredient in the recipe to prepare a law graduate. The present course is in continuation of Corporate Law-I (Compulsory Course) wherein various aspects of company as an institution were discussed covering corporate management and governance. Along with the issue of corporate mismanagement and collapse, which has caused concerns even at the global levels, this course focuses on various fundamental aspects of corporate reconstruction and corporate insolvency. A well developed as well as a well-regulated securities market is a sine qua non for meeting the growing financial requirements of the corporate sector. In order to appreciate its niceties, besides Companies Act, other regulating statutes like SEBI Act, Securities Contract (Regulation) Act, 1956 etc. and some guidelines issued thereunder will be discussed. With the withdrawal of the State and the consequent expansion of private sector alongwith emergence of MNCs globally, every society (developed as well as developing) is concerned about developing principles of good corporate governance and corporate social responsibility. Both these concepts will conclude our discussions on Corporate Law II (compulsory Course) equipping our young lawyers to compete in this competitive corporate market. SCHEME OF THE COURSE Module I: Regulation of Corporate Mismanagement Module II: Corporate Collapse Module III: Securities and Exchange Board of India [SEBI] Module IV: Securities Market and its Control Module V: Corporate Reconstruction Module VI: Foreign Direct Investment in India Module VII: Corporate Governance and Corporate Social Responsibility [Self Study] Total No. of Class Hours: 80

EVALUATION Attendance Research Project Continuous Assessment (Snaps I) Mid Semester Examination End Semester Examination TOTAL : : : : : 05 20 10 10 55

:100

DETAILS OF THE COURSE OUTLINE Module I: Regulation of Corporate Mismanagement Nature and function of the provision Protection against oppression Protection against mismanagement Shareholder's Derivative Action Nature, Scope, and Development Investigation power Role of Central Government Cases: 1. Foss v. Harbottle (1845) Ch 319 2. Scottish Co-op Whole Sale Society Ltd. v. Mayor (1958) 3 All E R 66 (self study) 3. Shanti Prasad Jain v. Kalinga Tubes 1965 SC 1535 4. Raja Mundry Elect. Supply Corp. v. Nageshwara Rao AIR 1956 SC 213 5. N.I.I.Ltd. v. N.I.N.I.H. Ltd. AIR 1981 SC 1298 Articles: 1. The relative importance of the Statutory Derivative Action in Australia by Stephen Bottomley, International Corporate Law Annual, Vol 2:2002, p.141 2. Protecting Minority and Public Interest in Nigerian Company Law: The Corporate Affairs Commission as a Corporations Ombudsman, by Ameze Guobadia, International Corporate Law Annual, Vol 1:2000 , p.79

Module II: Corporate Collapse Modes of Winding Up Contributories Liquidators Appointment, powers and functions Winding up by the Tribunal Analysis of grounds of non-commencement of business, inability to pay debts, and just and equitable clause. Voluntary Winding up - by members - by creditors Stepwise Procedure of Winding up

Cases: 1. R.O.C. of Bihar v. Bihar Wire and Wire Products Pvt. Ltd. (1975) 45 Comp. Cases 194 2. Seth Mohan Lal v. Grain Chambers Ltd. AIR 1968 SC 772 Module III: Securities and Exchange Board of India [SEBI] Establishment and Jurisdiction Role of SEBI in Capital Market Powers and Functions Securities Appellate Tribunal Establishment and Scope of Jurisdiction Different Scams in Indian Securities Market Modus Operandi Cases Module IV: Securities Market and its Control Introduction to Capital Market Reforms and Development. General concept of securities market products Securities Contract Regulation Act, 1956 Concept of Corporatization and Demutualization Stock Exchanges, OTCEI Conditions of Listing and Delisting Credit Rating Agencies Concept, Scope and regulatory framework Concept of Dematerialization and Depositories Cases: 1. Vinay Bubna v. Stock Exchange, Mumbai AIR 1999 SC 2517 Module V: Corporate Reconstruction Mergers Amalgamation Acquisition Takeover Demergers (Global and National scenario: Historical background; Meaning; Need; Scope; Methods) SEBI Takeover Code Regulation & Takeover of Sick Industries Cases: 1. 2. 3. 4. 5. 6. 7. Hindustan Lever Employees Union v. Hindustan Lever Ltd. AIR 1995 SC 470 Miheer H. Mafatlal v. Mafatlal Inds. Ltd. AIR 1997 SC 506 Maharashtra Apex Corp. Ltd., In re. 2005 (124) Comp. Cases 637 Swedish Match AB v. SEBI, India AIR 2004 SC 4219 Clariant International Ltd. v. SEBI AIR 2004 SC 4236 B.S.E. Brokers Forum, Bombay v. SEBI AIR 2001 SC 1010 Bombay Stock Exchange v. Jaya I. Shah AIR 2004 SC 55

8.

Navnit R. Kamani and Ors. v. R.R. Kamani AIR 1989 SC 9

Module VI: Foreign Direct Investment in India Foreign Direct Investment Concept of Foreign Collaboration and Joint Ventures Foreign Institutional Investors Module VII: Corporate Governance and Corporate Social Responsibility Bibliography: 1. A. Ramaiya, Guide to Companies Act, 16th Ed., Wadhwa, 2006 2. K Sekhar, Guide to SEBI Capital Issues, Debentures, & Listing, 3rd Ed. in 2 volumes, Wadhwa, 2003 3. Roy Goode, Principles of Corporate Insolvency Law, 3rd Ed, Thomson Sweet & Maxwell, 1997. 4. Mergers Et al, M.S. Ramanujam, 2nd Ed. 5. Corporate governance in banks: an introduction 6. Corporate governance: principles and paradigms 7. Corporate governance: the current crisis and the way out 8. Corporate social responsibility: cases 9. Effective M & A strategies: emerging perspective 10. Mergers and acquisition: strategies and insights 11. Managing IPOs: the role of investment bankers 12. Mergers and Demergers: concepts and cases 13. Corporate governance and chairmanship by Adrian Cadbury 14. Commercial law by Sealy 15. Corporate governance in context by Hopt 16. Company law by Rose 17. Gower & Davies: the principles of modern company law by Davies 18. Palmer's corporate insolvency 19. Principles of corporate insolvency law by Goode 20. Conflicts of interest corporate governance and financial markets./ Bahar, Rashid , Thevenoz, Luc Netherlands : 2007 21. Government regulation of financial management of private corporate sector in india./ Indian Law Institute Bombay : 1986 22. Law and Procedure For Mergers, Amalgamations, Takeovers & Corporate Restructure./ Sampath, K.R. Mumbai : 2006 23. Manual of Companies Act & Corporate Laws: Including SEBI Rules, Regulations, etc../ New Delhi : 2003, Puliani, Ravi & Puliani Mahesh 24. Mergers, Restructuring and Corporate Control./ Weston, J. Fred , Chung, Kwang S. and Hoag, Susan E. New Delhi : 2006 25. Takeovers, Restructuring and Corporate Governance./ Weston, J. Fred , Mitchell, Mark L. and Mulherin, J. Harold London : 2006 26. Companies Act: With Guide to Filing E-Company Forms Under MCA 21 SEBI Rules./ New Delhi : 2006 27. Company Law./ Singh, Avtar Lucknow : 2005 28. Company Law./ Mackin, Ronald London : 1996 29. E-Filing of Forms & Returns under Company Law (Comprehensive Guide to): With Specimen Filled in & Ready to File Forms./ Jain, D.K. New Delhi : 2006

30. 31. 32. 33.

Gover and Davies' Principles of Modern Company Law./ Davies, Paul, L. London : 2003 Lectures on company law & MRTP: with SEBI act, securities contracts (Regulation) act and SEBI guidelines./ Anantharaman, K S Nagpur : 1996 Pennington's Company Law./ Pennington, Robert R. Oxford : 2006 Principles of Company Law./ Bourne, Nicholas London : 1998

Webliography: 1. 2. 3. 4. 5. 6. http://www.sebi.gov.in/ [Securities Exchange Board of India] http://www.nse-india.com/ [National Stock Exchange] http://www.bseindia.com/ [Bombay Stock Exchange] http://www.mca.gov.in/ [Ministry of Corporate Affairs, GOI] http://finmin.nic.in/ [Ministry of Finance] http://www.crisil.com/index.jsp [CRISIL]

Articles Important Committee Reports Relevant to the Course: 1. Kumar Mangalam Birla Committee 2. Naresh Chandra Committee 3. N.R. Narayan Murthy Committee 4. Irani Committee Law Commission Report(s), if any 188th report on proposals for constitution of hi-tech fast track commercial divisions in High Courts 142nd report on Legislative Safeguards for protecting the small depositors from exploitation Important Act(s) Indian Foreign 1. Companies Act, 1956 2. SEBI Act, 1992 3. Securities Contract Regulation Act, 1956 4. SEBI Takeover Code