Roadmap for Answer Writing 1. Introduction Start with a definition: Briefly introduce the concept of fiduciary duty in corporate governance. Example: “Fiduciary duty refers to the obligation of individuals in positions of trust, especially corporate directors, to act in the best interests ...
These two legal doctrines fall under civil procedure but, they do not have the same roles nor do they occur in similar contexts. RES JUDICATA SECTION 11 of CPC. Meaning: What can be translated to English as “A matter already judged”. Purpose: This ensures that new trials are not occasioned that hadRead more
These two legal doctrines fall under civil procedure but, they do not have the same roles nor do they occur in similar contexts.
RES JUDICATA SECTION 11 of CPC.
Meaning: What can be translated to English as “A matter already judged”.
Purpose: This ensures that new trials are not occasioned that had already been determined by a competent court.
Application: Used where there is a previous decision of the superior court on the same issueThe same parties or their representativesA competent court of law.
Effect: Stops future legal actions on an issue between two parties until the initial proceeding has been resolved.
*RES SUBJUDICE SECTION 10 OF CPC*
Meaning: It means a case under the consideration of the court of law or a matter that is before the court.
Purpose: It serves as protection against the initiation of similar actions in different courts concerning the same matter
Application: Used when a case is under consideration in another chamberWhich is still pending in a competent court having jurisdiction
Effect: Demands a stay of the proceedings in the subsequent suit until the first suit has been resolved.
Timing: While Res Judicata takes place after the last judgment, Res Subjudice occurs during the conduct of a case.
Outcome: Res Judicata prevents subsequent actions all together while Res Subjudice only freezes them for the time being.
Finality: Res Judicata entails a finality while Res Subjudice on the other hand pertains to cases still in progress. Both are meant to avoid the risk of different outcomes, save time and resources, and yet they work at different steps in the legal system.
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Model Answer Fiduciary duty in corporate governance refers to the legal and ethical obligation of individuals, particularly the Board of Directors, to act in the best interests of the company and its stakeholders. In India, this concept is rooted in both statutory provisions and common law principleRead more
Model Answer
Fiduciary duty in corporate governance refers to the legal and ethical obligation of individuals, particularly the Board of Directors, to act in the best interests of the company and its stakeholders. In India, this concept is rooted in both statutory provisions and common law principles, which emphasize trust, transparency, and accountability within corporations.
Key Aspects of Fiduciary Duty
The duty of loyalty requires that directors act in the company’s best interest rather than their own personal interests. A prime example is avoiding self-dealing—such as entering into transactions that benefit a director personally, at the expense of the company or its shareholders. This principle is reinforced under Indian laws, including the Companies Act, 2013, which prohibits such conflicts of interest (Section 184).
Directors must provide full and accurate information to shareholders to enable them to make informed decisions. For example, Indian companies are required to disclose their financial performance through periodic reports such as the income statement and balance sheet. This aligns with the principle of transparency, a key aspect of corporate governance.
Directors must make decisions based on objectivity and independence, without undue influence from external factors or personal interests. This duty is reflected in the requirement under Indian corporate law for the appointment of Independent Directors (Companies Act, 2013, Section 149). These directors are expected to safeguard the interests of minority shareholders and provide unbiased oversight.
Directors must act honestly and with sincere intent to advance the company’s welfare. An example includes honoring contractual obligations even after the contract ends, ensuring that the company’s long-term interests are protected.
Directors are expected to make decisions with due diligence and care, ensuring that their actions support the company’s growth and risk management. This includes thoroughly evaluating strategic moves, such as mergers or acquisitions, and ensuring that the company’s assets are properly managed.
In conclusion, fiduciary duty in India ensures that directors act responsibly, transparently, and ethically, fostering trust and accountability in corporate governance. This concept is crucial for protecting the interests of stakeholders and sustaining the company’s long-term health.
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