Supreme Court Restores Woman Promoter’s Shareholding in Family Company, Rules NCLT Has Wide Jurisdiction in Oppression and Mismanagement Cases

The Supreme Court of India on September 2, 2025, held that the National Company Law Tribunal (NCLT) possesses wide jurisdiction to decide matters incidental and integral to complaints alleging oppression and mismanagement in the affairs of a company. The ruling comes in a long-running dispute over the ownership of shares in Satori Global Limited between its original promoters, Mrs. Shailja Krishna and her estranged husband, Ved Krishna.

A bench of Justices Dipankar Datta and K Vinod Chandran clarified that the NCLT and the erstwhile Company Law Board (CLB) have full authority to adjudicate such disputes unless specifically barred by any legislative enactment. The Court observed that the tribunal could examine whether a gift deed and subsequent share transfer in favour of a family member was valid under the Companies Act, 1956, and whether it complied with the company’s Articles of Association (AoA) and Memorandum of Association.

The apex court was hearing appeals filed by Mrs. Shailja Krishna challenging a June 2, 2023 decision of the National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi. The NCLAT had reversed the findings of the NCLT, which had earlier restored her as Executive Director of Satori Global Limited and declared her the lawful owner of 39,500 equity shares.

According to records, Shailja Krishna and Ved Krishna were the original promoters of the company. By the end of the financial year 2006–2007, she held 39,500 shares out of a total of 40,000, representing more than 98% of the shareholding. Around 2009–2010, the couple’s marital relationship deteriorated, leading to her resignation from the company in 2010. On the same day, it was alleged, a gift deed was executed transferring her entire shareholding to her mother-in-law, Mrs. Manjula Jhunjhunwala, purportedly out of “love and affection.”

Challenging this transfer, Shailja Krishna approached the NCLT alleging manipulation, forgery, and illegal removal from the company’s management. The NCLT found overwriting and mismatches in the share transfer form, declared the gift deed null and void, restored her as Executive Director, and directed return of the share certificates. The Tribunal also found board meetings conducted in violation of the Companies Act and the company’s internal regulations.

However, the NCLAT subsequently allowed appeals filed by the respondents, holding that the company petition was not maintainable.

The Supreme Court, after examining the record, set aside the NCLAT’s ruling and restored the NCLT’s order. The bench held that the appellant had clearly been subjected to oppression and mismanagement. The Court noted two major grounds: first, the circumstances surrounding the gift deed and transfer of shares were seriously questionable and had to be declared invalid; second, the board meetings held during the disputed period were mala fide and conducted in violation of statutory provisions as well as the Articles of Association.

The Court also found that the gift deed itself was invalid. Clause 16 of the company’s Articles of Association specifically prohibited transfer of shares to the mother-in-law. The judges observed that any action inconsistent with the Articles cannot be sustained in law. “The gift deed cannot be called in aid to defeat the claims of the appellant in the company,” the bench remarked.

Further, the Court highlighted clear evidence of overwriting and manipulation in the share transfer forms. “We have no hesitation to hold that the share transfer needs to be set aside on these grounds,” the judgment stated.

On the issue of governance, the Supreme Court held that board meetings convened in 2010 were fundamentally illegal. They were conducted in violation of both the Companies Act, 1956 and the internal regulations of Satori Global Limited. Such meetings, it held, cannot form the basis of valid corporate action.

Restoring the NCLT’s directions, the bench concluded that the company’s affairs were being conducted in a manner prejudicial to the appellant. The Court remarked that “probity is lacking” and the record clearly demonstrated acts of oppression and mismanagement against Shailja Krishna.

Case Title: Mrs. Shailja Krishna v. Satori Global Limited & Ors

Bench: Justices Dipankar Datta and K Vinod Chandran

Judgment Date: September 2, 2025