Section 242 — Powers of Tribunal

(1) If, on any application made under section 241, the Tribunal is of the
opinion—
(a) that the company’s affairs have been or are being conducted in a manner prejudicial or
oppressive to any member or members or prejudicial to public interest or in a manner prejudicial to the
interests of the company; and
(b) that to wind up the company would unfairly prejudice such member or members, but that
otherwise the facts would justify the making of a winding -up order on the ground that it was just and
equitable that the company should be wound up,
the Tribunal may, with a view to bringing to an end the matters complained of, make such order as it thinks
fit.
(2) Without prejudice to the generality of the powers under sub-section (1), an order under that sub-
section may provide for—
(a) the regulation of conduct of affairs of the company in future;
(b) the purchase of shares or interests of any members of the company by other members thereof
or by the company;
(c) in the case of a purchase of its shares by the company as aforesaid, the consequent reduction of
its share capital;
(d) restrictions on the transfer or allotment of the shares of the company;

1. Ins. by Act 22 of 2019, s. 33 (w.e.f. 15-8-2019).

(e) the termination, setting aside or modification, of any agreement, howsoever arrived at, between
the company and the managing director, any other director or manager, upon such terms and conditions
as may, in the opinion of the Tribunal, be just and equitable in the circumstances of the case;
(f) the termination, setting aside or modification of any agreement between the company and any
person other than those referred to in clause (e):
Provided that no such agreement shall be terminated, set aside or modified except after due notice
and after obtaining the consent of the party concerned;
(g) the setting aside of any transfer, delivery of goods, payment, execution or other act relating to
property made or done by or against the company within three months before the date of the application
under this secti on, which would, if made or done by or against an individual, be deemed in his
insolvency to be a fraudulent preference;
(h) removal of the managing director, manager or any of the directors of the company;
(i) recovery of undue gains made by any managing director, manager or director during the period
of his appointment as such and the manner of utilisation of the recovery including transfer to Investor
Education and Protection Fund or repayment to identifiable victims;
(j) the manner in which the managin g director or manager of the company may be appointed
subsequent to an order removing the existing managing director or manager of the company made under
clause (h);
(k) appointment of such number of persons as directors, who may be required by the Tribuna l to
report to the Tribunal on such matters as the Tribunal may direct;
(l) imposition of costs as may be deemed fit by the Tribunal;
(m) any other matter for which, in the opinion of the Tribunal, it is just and equitable that provision
should be made.
(3) A certified copy of the order of the Tribunal under sub -section (1) shall be filed by the company
with the Registrar within thirty days of the order of the Tribunal.
(4) The Tribunal may, on the application of any party to the proceeding, make any interim order which
it thinks fit for regulating the conduct of the company’s affairs upon such terms and conditions as appear
to it to be just and equitable.
1[(4A) At the conclusion of the hearing of the case in respect of sub -section (3) of section 241, the
Tribunal shall record its decision stating therein specifically as to whether or not respondent is a fit and
proper person to hold the officer of director or any other officer connected with the conduct and
management of any company.]
(5) Where an order of the Tribunal under sub-section (1) makes any alteration in the memorandum or
articles of a company, then, notwithstanding any other provision of this Act, the company shall not have
power, except to the extent, if any, permitted in the order, to make, with out the leave of the Tribunal, any
alteration whatsoever which is inconsistent with the order, either in the memorandum or in the articles.
(6) Subject to the provisions of sub-section (1), the alterations made by the order in the memorandum
or articles of a company shall, in all respects, have the same effect as if they had been duly made by the
company in accordance with the provisions of this Act and the said provisions shall apply accordingly to
the memorandum or articles so altered.
(7) A certified cop y of every order altering, or giving leave to alter, a company’s memorandum or
articles, shall within thirty days after the making thereof, be filed by the company with the Registrar who
shall register the same.
(8) If a company contravenes the provisions of sub-section (5), the company shall be punishable with
fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees and every

1. Ins. by Act 22 of 2019, s. 34 (w.e.f. 15-8-2019).