Section 409 - Power of Tribunal to prevent change in Board of directors likely to affect company prejudicially. - Companies Act, 1956

Power of [1] [Tribunal] to prevent change in Board of directors likely to affect company prejudicially [2] . 409. (1) Where a complaint is made to the [3] [Tribunal] by the managing director or any other director, [4] [* * *] [5] [or the manager], of a company that as a result of a change which has taken place or is likely to take place in the ownership of any shares held in the company, a change in the Board of directors is likely to take place which (if allowed) would affect prejudicially the affairs of the company, the [6] [Tribunal] may, if satisfied, after such inquiry as it thinks fit to make that it is just and proper so to do, by order, direct that [7] [no resolution passed or that may be passed or no action taken or that may be taken] to effect a change in the Board of directors after the date of the complaint shall have effect unless confirmed by the [8] [Tribunal]; and any such order shall have effect notwithstanding anything to the contrary contained in any other provision of this Act or in the memorandum or articles of the company, or in any agreement with, or any resolution passed in general meeting by, or by the Board of directors of, the company. (2) The [9] [Tribunal] shall have power when any such complaint is received by it, to make an interim order to the effect set out in sub-section (1), before making or completing the inquiry aforesaid. (3) Nothing contained in sub-sections (1) and (2) shall apply to a private company, unless it is a subsidiary of a public company. ------------------------------------ Notes:- [1] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified to be notified. Earlier the quoted words were substituted for Central Government by the Companies (Amendment) Act, 1988, w.e.f 31-5-1991. [2] Fees prescribed is Rs. 2500, w.e.f. 1-4-2000. On notification of the commencement of the amendment, power will be transferred to the National Company Law Tribunal. [3] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified to be notified. Earlier the quoted words were substituted for Central Government by the Companies (Amendment) Act, 1988, w.e.f 31-5-1991. [4] Omitted by the Companies (Amendment) Act, 2000, w.e.f. 13-12-2000. Prior to omission the quoted words were substituted for or the secretries and treasures by the Companies (Amendment) Act, 1960, Act, 65 of 1960, as provisions relating to the managing agents, the secretaries and treasures had become redundant after abolition of system by Act 17 of 1969. [5] Substituted by the Companies Act, 1960, Act 65 of 1960, section 156, for "or the secretaries and treasurers". [6] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified to be notified. Earlier the quoted words were substituted for Central Government by the Companies (Amendment) Act, 1988, w.e.f 31-5-1991. [7] Substituted by the Companies (Amendment) Act, 1960, Act 65 of 1960, section 156 w.e.f. 31-5-1991, for "no resolution passed or action taken". [8] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified to be notified. Earlier the quoted words were substituted for Central Government by the Companies (Amendment) Act, 1988, w.e.f 31-5-1991. [9] Substituted for "Company Law Board" by the Companies (Second Amendment) Act, 2002, w.e.f. a date yet to be notified to be notified. Earlier the quoted words were substituted for Central Government by the Companies (Amendment) Act, 1988, w.e.f 31-5-1991.