Legal Question in Administrative Law in India

12.08.2013

Dear Sir / Madam,

Query incomplete. So you should ask MHADA officials for the name of the relevant and specific Act pertaining to Section 986 that they are referring to. In the absence of precise detail, I am quoting the relevant jist of a case law to throw some light in the subject :

Raghuvanshi Mills, Ltd vs Commissioner Of Income-Tax, ... on 7 December, 1960

Showing the contexts in which section 986 appears in the document

deemed to be a company in which the public are substantially interested if shares of the company carrying not less than twenty five per cent of the voting power have been allotted unconditionally to, or acquired unconditionally by, and are at the end of the previous year beneficially held by the public...... and if any such shares have in the course of such previous year been the subject of dealings in any stock exchange or are in fact freely transferable by the holders to other members of the public." It is clear from the third proviso that the sub-section 986 does not exercise freely his voting power, can be said to belong to that body, which is designated 'public'. The word 'Public' is used in contradistinction to one or more persons who act in unison and among whom the voting power constitutes a block. If such a block exists and possesses more than seventy-five per cent. of the voting power, then the company cannot be said to be one in which the public are substantially interested. In Sardar Baldev Singh v. The Commissioner of Income-tax, Delhi and Ajmer (1), this Court took the following view: "The section thus applies to a company in which at least 75 per cent. of the voting power lies in the hands of persons other than the public, which can only mean, a group of persons allied together in the same interest. The company would thus have to be one which is controlled by a group. The group can do what it likes with the affairs of the company, of course, within the bounds of the Companies Act. It lies solely in its hands to decide whether a dividend shall be declared or not."

Regards,