Whether the shareholders can among themselves enter into an agreement that is contrary to or inconsistent with the Articles of Association of the company?
The agreement, imposes additional restrictions on the member’s right to transfer the shares which are contrary to the provisions of the Article. They are, therefore, not binding either on the shareholders or on the company.
Whether clause 7 of the Protocol Agreement impinged on the free transferability of shares of a public company as contemplated under Section 111 A of the Companies Act, 1956 or the erstwhile Section 22 A (2) of the Securities Contracts (Regulation) Act, 1956?
Shares of a company are movable property and the right of the shareholder to deal with his shares or enter into contracts in relation thereto and have a pre-emption clause is nothing but a shareholder exercising his property rights.
Whether the provisions of an agreement, that are not inconsistent with the act, but are also not part of the AoA, can be said to be applicable?
The legal position is that where the AOA is silent on the existence of an affirmation vote, it will not be possible to hold that a clause in an agreement between the shareholders would be binding without being incorporated in the AOA.