12.8.16 (Variation of Shareholders' Rights)

Section 106 provides that where the share capital of a company is divided into different classes of shares, the rights attached to the shares of any class may be varied with the consent in writing of the holders of no t less than three-fourths of the issued shares of that class or with the sanction of special resolution passed at their meeting. However, this variation is possible only if provision for such variation is contained in the Memorandum or Articles of the company and in the absence of such a provision, if the variation is not prohibited by the terms of issue of the shares of that class.

Section 107 provides that if the holders of 10 per cent of the issued shares of that class who had not assented to the variation apply to the Court within 27 days of the date of the consent or the passihg of the special resolution, the Court may, after hearing the interested parties, either confirm or cancel the variation. The company must, within 30 days of the service of the Court's order, forward a copy of the order to the Registrar. In the event of a default, the company and every officer in default is liable to fine upto Rs 500.