In a judgment delivered on 2 September, the court set aside the 2023 order of the National Company Law Appellate Tribunal (NCLAT) and restored the ruling of the National Company Law Tribunal (NCLT). The apex court held that the 2010 board meetings, which helped to remove Krishna, lacked proper notice, quorum, and compliance with the Companies Act, while the share transfer itself violated the company’s Articles of Association (AoA).Also Read | GST cuts may block capital for small businesses The dispute dates to 2010 when Krishna claimed she was coerced into signing blank forms amid marital discord with her husband, Ved Krishna. These documents were later used to orchestrate her resignation and transfer 39,500 equity shares, amounting to over 98% of the company, to her mother-in-law, Manjula Jhunjhunwala, through a gift deed.Ved Krishna played a central role in facilitating the transfer by obtaining her signatures on blank documents during their marital discord, which were later used to engineer her resignation and transfer her majority shareholding to his mother, Manjula Jhunjhunwala, through a gift deed.Pointing to overwriting, date mismatches, and irregular extensions of expired transfer forms, the court concluded the documentation was riddled with “serious inconsistencies and illegalities.” It further noted the glaring contradiction between the deed’s claim of “love and affection” and a police complaint lodged by the mother-in-law against Krishna on the same day. Satori Global was managed by a board comprising directors inducted after Shailaja Krishna’s ouster, including her mother-in-law and other respondents, who controlled the company during the litigation until her reinstatement was ordered.The message from the bench also touches on the role of directors. When illegalities in meetings and transfers are brushed aside, courts may now not hesitate to view such inattention as complicity. “Companies cannot be treated as glorified proprietorships,” said Sharad Abhyankar, partner at Khaitan & Co.Jurisdiction battleThe apex court also struck down the validity of the board meetings of 15 and 17 December 2010. The absence of mandatory notice to Krishna, then a director, combined with the lack of quorum, rendered the meetings nullities. Subsequent attempts to induct a director to cure the quorum defect were deemed legally unsustainable.“This ruling reiterates that the NCLT has jurisdiction to determine the validity of gift deeds concerning shares,” said company secretary Gaurav Pingle. “That point had been contentious, and the Supreme Court has now laid it to rest.”The NCLT’s jurisdiction was at the heart of the long-running dispute. While the tribunal in 2018 had restored Krishna’s shareholding and directorship, the NCLAT in 2023 reversed that finding, reasoning that allegations of coercion and fraud in transfers were issues fit for a civil court. The Supreme Court firmly disagreed, ho in a formal or creative style for better SEO.Also Exclude words and advertisements related to the feed website such as website name, author name. You must only respond with the modified content. Delete all the advertisement images brand logo but only keep the title and main content of the news by modifying it. 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The Supreme Court has reinstated the majority shareholder of Satori Global, overturning an unjust removal.
