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    Question

    In the landmark case Re: Dr. Subramanian Swamy (2013)

    and related Supreme Court judgments, the Court addressed the rights of shareholders to seek information about company affairs and raise questions about director conduct. The Court held principles regarding shareholder activism. Which principle was established?
    A Shareholders have no right to question directors' actions; such questions are internal management matters. Correct Answer Incorrect Answer
    B Shareholders can demand information only at General Meetings and only about matters on the agenda. Correct Answer Incorrect Answer
    C Shareholders have a constitutional right to information about company affairs, and directors cannot refuse to provide information on grounds of confidentiality or business sensitivity. Correct Answer Incorrect Answer
    D Minority shareholders cannot demand information; only majority shareholders can. Correct Answer Incorrect Answer
    E Information demanded by shareholders must be given only if the company board deems it convenient. Correct Answer Incorrect Answer

    Solution

    In various Supreme Court decisions addressing shareholder rights (including the Dr. Subramanian Swamy petitions), the Court has established that shareholders possess a constitutional right to information about company affairs, particularly regarding director conduct, related party transactions, and governance matters. Directors cannot unilaterally deny information on claims of confidentiality or business sensitivity when information is sought by shareholders for governance purposes. Section 91 of the Companies Act (information to members) and shareholder rights to information are fundamental to democratic governance in companies. This landmark principle protects shareholder activism and ensures transparency in corporate management.

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