|
Name of the
Case
|
Held
|
|
Aruna Oswal v.
Pankaj Oswal
|
The
Supreme Court held that disputes regarding the inheritance of shares cannot
be resolved in proceedings under Sections 241-242 of the Companies Act, 2013.
The Court also considered whether the rights of a nominee of shares and
securities under Section 72 of the Companies Act are similar to or different
from the rights of a nominee under the Life Insurance Act, 1938, the Banking
Regulation Act, 1949, the Government Savings Certificate Act, 1959, and other
similar legislation.
|
|
Tata Sons Ltd. v. Cyrus Mistry
(LL 2021 SC 184)
|
The Supreme Court bench headed by CJI SA Bobde allowed
its appeal against the order of the National Company Law Tribunal, which had
ordered to reinstate the ousted Chairman Cyrus Mistry.
The Court held that the actions of Tata Sons board
against Mistry did not amount to oppression of minority shareholders or
mismanagement. The bench also said that it was open for Tatas and Mistry to
work out their separation terms.
|
|
Mahima Datla v. Renuka Datla (2022)
|
The Supreme Court reaffirmed the application of the
‘Duomatic’ principle in Indian jurisprudence and held that “…the thrust of the Duomatic Principle
is that strict adherence to a statutory requirement may be dispensed with if
it is demonstrated otherwise on facts, if the same is consented by all
members.”
|
|
Securities And Exchange Board of
India v. R.T. Agro Private Ltd., 2022 SCC Online SC 1015
|
The Securities Appellate Tribunal’s order was upheld,
which confirms that the prohibition on voting by related parties under
Section 188 of the Companies Act, 2013 applies only at the time of entering
into a contract or arrangement. In this case, R.T. Exports Limited planned to
acquire 40,000 sq. ft. of residential space from Neelkanth Realtors Private
Limited. This transaction was classified as a related party transaction and
required approval from R.T. Exports Limited. According to Section 188 of the Companies
Act, 2013, the related parties abstained from voting on the special
resolution. Subsequently, an Extra-Ordinary General Meeting was held to
rescind the resolution, during which the related parties were allowed to
vote.
|
|
Cox and Kings Ltd. v. SAP India Pvt. Ltd., 2023 INSC
1051
|
The Supreme Court of India’s five-judge Constitution
Bench ruled that non-signatories can be included in arbitration proceedings
under the “Group of Companies Doctrine.” This decision clarified
the doctrine’s application in Indian arbitration, balancing party autonomy
with the practical realities of modern commercial transactions. The court
determined that a non-signatory entity is not “claiming through or
under” a signatory party and held that the definition of a
“party” under the Arbitration Act encompasses both signatory and
non-signatory entities. The court acknowledged that strictly adhering to
formal consent could unjustly exclude non-signatories and lead to unnecessary
proceedings.
|
|
Moser Baer
Karamchari Union v. Union of India, 2023 SCC Online SC 547
|
The Supreme Court ruled that Section 327(7) of the
Companies Act, 2013 does not violate Article 21 of the Constitution and
emphasized that Sections 326 and 327 are not applicable in cases of
liquidation under the Insolvency and Bankruptcy Code (IBC). The Court made it
clear that when a company is liquidated under the IBC, the distribution of
assets must strictly follow the waterfall mechanism outlined in Section 53 of
the IBC, subject to Section 36(4) of the IBC. This mechanism provides a
precise mathematical formula and establishes a hierarchy for the payment of
debts according to their priority.
|
|
Union of India v. Deloitte Haskins and Sells LLP, 2023
SCC Online SC 557
|
The Supreme Court held that Section 140(5) of the
Companies Act, 2013, which addresses the “Removal, Resignation of
Auditor, and Giving of Special Notice” under Chapter X titled
“Audit and Auditors,” is neither discriminatory, arbitrary, nor in
violation of Articles 14 and 19(1)(g) of the Indian Constitution. The Court
also clarified that the resignation of an auditor after an application has
been filed under Section 140(5) does not automatically terminate the
proceedings initiated under this section.
|
|
Vishal Tiwari v. Union of India, 2024 INSC 3
|
The judgment concluded that the Court’s authority to
intervene in SEBI’s regulatory domain, particularly in framing delegated
legislation, is limited. It found no valid grounds to direct SEBI to revoke
its amendments to the FPI Regulations and the LODR Regulations. While
reviewing the role of independent regulatory bodies like SEBI in the
Adani-Hindenburg issue, the Supreme Court emphasized the significance of SEBI
as India’s principal capital market regulator and affirmed its role as the
appropriate body to adjudicate market violations.
|
Jurisedge Academy
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In this Landmark Judgment Series celebrating 8 years of Jurisedge, we turn our focus to the Landmark Series for the Company Law.
The landscape of Company Law from 2020 to 2024 has been marked by significant judicial pronouncements, the Supreme Court has delved into interpretation of many doctrines and provisions of the Company Act, 2013. Few of discussed the topics included Inheritance of shares and the rights of nominees under various statutes, the dispute between Tata Sons and Cyrus Mistry regarding board actions, the application of the Duomatic principle in corporate law, SEBI’s regulatory authority and the scope of judicial intervention, Voting by related parties in transactions under the Companies Act, The inclusion of non-signatories in arbitration under the Group of Companies Doctrine, The liquidation process under the Insolvency and Bankruptcy Code (IBC) and Removal and resignation of auditors under the Companies Act.
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