Author: Arpita Singh Bhadauriya, Shambhunath institute of law, Prayagraj
To the point
Swindle is common in corporate sector. Forgery, intimidation, scam, these are common in Indian privilege society, and are also punishable by law because it is considered as crime. Haridas mundhra swindle, is the first swindle after autonomy in India in 1950s. This scam tells bare nexus between, the officialdom and bourse and other businessman. This scam case creates lots of chaos in parliament as well. This article is all about how Haridas mundhra punished by court for the scam under the companies act, 1956.
Abstract
Haridas mundhra swindle is first prominent scam case after the India’s independence. Haridas was a small salesman of bulb; he expanded his business and invested in some other companies also and after that he gain profit of 4crore rupees, and their integrities questioned somehow. In 1956, he was designated by the Bombay stock exchange for selling bogus shares. In 1957, mundhra invest in LIC (LIFE INSURANCE CORPORATION), it was done under governmental pressure in this LIC comes into loss. The anomaly was highlighted in 1958 by Indian National Congress party.
The purpose of this article to understand about the case of life insurance incorporation of India v. Haridas mundhra and others, and the consequences incur to Haridas mundhra by law. Scam is blatant in every country; it can be of many types whether it is digital scam, corporate scam or financial scam etc. it is punishable by law because it is considered as crime.
Use of legal jargon
Haridas mundhra was punishable under companies act, 1956. The case brings under Clause (a) of sub-section (1) of section 398 of the companies act, 1956. Court ordered Haridas mundhra to compensate of Rs.6, 65,492. And court also ruled that inquired into subsidiary company affairs reckoned pertinent. Legal jargon use in this case was mismanagement, prejudicial conduct towards company, work of negligent directors.
The Proof
Substantiation of the case that it is prominent in Lok Sabha Feroze Gandhi form a committee and Chagla became the head of committee and in 21 days commission came out with the verity of the case. This case was flagrant because there was involvement of some well-known leaders. This scam was glaring at that time because it was the first scam after the independence of India. In recent times mundhra is considered as scammers like others in this case T.T.Krishnamachari was suspended from the seat of finance minister. After this case parliament introduce new guidelines in 1956. And the big fight arise between the Nehru and Feroze Gandhi he raises lots of question related to mundhra scam in parliament it seems that he was confronted by his son-in-law. Lots of argument started in court related to no specific evidence that Mundhra was involved on the misconduct.
Case law
Life insurance Corporation of India. V Haridas mundhra and others. In this case court held that Haridas must pay compensation for misfeasance.
Conclusion
In terms of conclusion it is to be stated that how this scam case creates chaos and the interference of political parties in it. Loss of LIC Company was compensated by the Haridas and he was liable under section of 397,398, 543 of companies act, 1956. The squabble in Lok Sabha was intensified because lots question arises in parliament. A company is a separate legal entity and if the corporate veil uplift member will liable not company just like in Haridas case. Haridas was liable for all the swindle and he pay for it under companies act, 1956.
FAQs
What is scam?
Scam is type of forgery and frauds in which by way of fraud they make fool the people in the society.
Who was Haridas mundhra?
Haridas was a small businessman by which he creates an empire of 4cr. Rupees.
Haridas was punishable under which act?
He was punishable under companies act, 1956.
