Mrs. Shailja Krishna vs Satori Global Limited & Ors.

Held: The NCLT/CLB possess a wide jurisdiction to decide all such matters that are incidental and/or integral to the complaint alleging oppression and mismanagement – Tribunal ought to bring an end to the complaints of oppression and mismanagement and must also provide a solution to the problems – In the instant case, admittedly, the determination of whether the gift deed is valid or not is central to the decision herein and, therefore, the NCLT did have full jurisdiction to decide whether the gift deed is valid or not, or whether it is against the provisions of the 1956 Act and/or internal regulations of the Company, including but not limited to the AoA and the MoA – If a member who holds the majority of shares in a company is reduced to the position of minority shareholder in the company by an act of the company or by its Board of Directors in a mala fide manner, the said act must ordinarily be considered to be an act of oppression against the said member – Appellant was the victim of oppression and mismanagement because the circumstances surrounding the gift deed and the subsequent transfer of shares are seriously questionable and are invalid and; the board meetings were conducted in a mala fide manner and against both the statutory requirements of the 1956 Act and the internal regulations of the Company – Gift deed and share transfer forms were invalid – Share transfer set aside – The Board Meetings held on 15.12.2010 and 17.12.2010 were also invalidly conducted and the resolutions purportedly passed therein, including the acceptance of the Appellant’s alleged resignation, do not warrant any validation by this Court – Interference by NCLAT with the judgment and order of the NCLT was unnecessary – Order of NCLAT set aside and that of the NCLT is restored – Companies Act, 2013. [Paras 29-31, 39, 42, 53, 55]

Companies Act, 1956 Act – s.286 – Board meetings dtd.15.12.2010 or 17.12.2010, if were invalid: Held: Yes – Clauses 30 and 61 of the AoA r/w s.286 mandate that notice of every board meeting must be served on all Directors – Appellant, who continued as a Director during the relevant period, was never served with notice of either of the meetings dtd.15.12.2010 or 17.12.2010 – Moreover, such notices and/or proof of service of such notices were never produced before the NCLT, even the minutes of the meetings were also not produced – Hence, the requirement of notice being mandatory, non-service thereof renders the meetings invalid – Furthermore, on the issue of quorum, clause 53 of the AoA mandates that every Board Meeting of the Company must have a quorum of at least two validly appointed Directors – Admittedly, on 15.12.2010, the Appellant was a Director holding 98% shareholding in the Company and the only other Director was the third respondent – Hence, in the absence of the Appellant, the meeting did not have the requisite quorum – Further, since the alleged induction of the fifth respondent as an Additional Director in the meeting of 15.12.2010 was itself illegal, he could not be deemed to be a validly appointed Director, and his presence in the subsequent meeting dtd.17.12.2010 could not have cured the defect of quorum – Thus, both meetings were vitiated for want of proper quorum – Board Meetings held on 15.12.2010 and 17.12.2010 were invalid. [Paras 48, 51-53] Words and Phrases – Oppression – Meaning, discussed.