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1. Introduction
2. Board Control
The High Court observed, inter alia, that the contention of the
counsel for the Union of India that "the control of Oriental over the
composition of the Board of Poonam Hotels which they exercise by
virtue of their agreement dated August, 1975 is in contravention of
the provisions of Sections 255,256 and 257 of the Act overlooks the
important fact that section 255 excludes from its purview cases
which have been otherwise expressly provided in the Act. The
words "save as otherwise expressly provided in this Act" used in
section 255(1)(b) are of commanding significance. Section 4(2) is
an express provision for the appointment of the directors on the
Board of Subsidiary. This provision is not hit by Section 255
because it is expressly excluded."
The High Court also observed that "there is no denying the fact that
the right of the members of a public company to appoint directors
of their choice at a general meeting is greatly abridged when there
comes into being a relationship of a Holding and Subsidiary
Company. But this restriction inheres in the definition of the
Holding Company. It is firmly embedded in section 4 of the Act.
The ability to control the conduct of the Subsidiary is the hall-mark
of the Holding Company. The Holding Company is the controlling
company. The controlled company is called a Subsidiary."
Holding and subsidiary companies.
They are;-
13. Conclusion