Minority shareholder oppression in a controlled subsidiary justifies a fair buyout at petition-date value under section 210.

A parent-controlled subsidiary may be treated as suffering oppression where control is used to divert business, restrict supplies, and leave minority shareholders without effective protection. Passive acquiescence by nominee directors, concealment of material facts, and failure to protect the subsidiary's interests can form part of the conduct of the company's affairs. Section 210 was construed broadly to address such burden, harshness, and wrongful conduct. A buyout order directing purchase of the minority shares at petition-date value was upheld as an appropriate remedy, and the fixed valuation disclosed no error of principle.

---

---

Issues: (i) Whether the affairs of the company were conducted in a manner oppressive to the minority shareholders within section 210 of the Companies Act, 1948; (ii) whether oppressive conduct by the parent society in relation to its subsidiary and the actions or omissions of nominee directors could amount to conduct of the affairs of the company; (iii) whether the order directing purchase of the minority shares at the fixed price was a proper exercise of discretion.

Issue (i): Whether the affairs of the company were conducted in a manner oppressive to the minority shareholders within section 210 of the Companies Act, 1948.

Analysis: The company had been formed as a subsidiary business in which the minority shareholders brought skill, connections, and goodwill. The society thereafter used its control to divert business to its own competing department, starve the company of supplies, and leave the minority without effective protection. The conduct was held to be burdensome, harsh, and wrongful, and the section was construed broadly to meet such mischief.

Conclusion: Yes. The affairs of the company were conducted in a manner oppressive to the minority shareholders.

Issue (ii): Whether oppressive conduct by the parent society in relation to its subsidiary and the actions or omissions of nominee directors could amount to conduct of the affairs of the company.

Analysis: The affairs of the subsidiary could not be separated from the policy imposed by the parent society where the latter controlled the board through nominee directors. Passive acquiescence, silence, concealment of material facts, and failure to protect the subsidiary's interests were treated as part of the conduct of the company's affairs. The controlling shareholder was required to deal fairly and in good faith with the subsidiary and its minority members.

Conclusion: Yes. The parent society's control through nominee directors and their inaction constituted oppressive conduct in the affairs of the company.

Issue (iii): Whether the order directing purchase of the minority shares at the fixed price was a proper exercise of discretion.

Analysis: The relief under section 210 was not confined to cases where the company could continue in active business. An order for purchase of shares was an appropriate way to bring the oppression to an end, and the price was to reflect the value the shares would have had at the petition date absent oppression. The fixed valuation disclosed no error of principle.

Conclusion: Yes. The buyout order and the price fixed were upheld.

Final Conclusion: The statutory remedy for oppression was applied broadly to protect minority shareholders in a subsidiary, and the challenge to the buyout relief failed.

Ratio Decidendi: Where a parent company controls a subsidiary through nominee directors, passive or active use of that control to prejudice the subsidiary and its minority shareholders can constitute oppression in the conduct of the company's affairs, and a fair buyout at the petition-date value is an available remedy under section 210.

---