Overcoming the Tyranny of Non-Interference: A Critique View with Reference to Various Cases

Abstract

“Of all tyrannies a country can suffer the worst is the tyranny of the majority”- William Inge

The Act came into force on 12 September 2013 and altered and reshaped the spectrum of the contemporary company law regime entirely. It also filled the several cavities that bedevilled the Companies Act, 1956. Akin to most democracies, the corporate world is also subject to the majority rule. However, this shareholder democracy becomes a curse when it gets transformed into majority tyranny. Many a times, the views and interests of the minority shareholders are overlooked owing to the majority-influenced decision making. This paves way for the suppression of the minority and the “squeezing out” of the minority from the decision-making process and, ultimately, from the company. The Companies Act, 2013 can be perceived as a turning point in the majority-minority strife. A detailed evaluation of the provisions of the Act elucidates that the legislative intent behind this enactment is to safeguard the minority interests thoroughly and exhaustively. These provisions have given rise to the “minority rule” that overcomes the historical tyranny of the “majority rule” and the “principle of non-interference”. This research paper cruises through various statutory provisions and judicial pronouncements and finally culminates in the conclusive analysis of how the introduction of minority rule is a promising move in the direction of establishing a corporate governance framework that guarantees equal and fair treatment of all the shareholders.