SHAILJA KRISHNA VS SATORI GLOBAL : CASE SUMMARY

The Supreme Court in Shailja Krishna Vs Satori Global (2025) INSC 1065 has held that  NCLT has wide jurisdiction to decide all such matters that are incidental and/or integral to the complaint alleging oppression and mismanagement including of fraud and coercion.

FACTS OF THE CASE

Satori Global Limited was incorporated on 13.04.2006.  At the time of incorporation authorized share capital of the of company was 2 Crore divided into 20,00,000 equity shares of Rs. 10 each. The subscribed and paid up capital of the company was  3 lac divided into 30,000 equity shares of Rs. 10 each.  At the time of incorporation, Appellant Shailja Krishna had 500 shares while  her husband had 29500 shares. In December, 2006  husband of Shailja Krishna transferred 29000 shares to her  and 500 shares to one Mr Nirupam Mishra.  Subsequently 10,000 more shared were issued to Shailja Krishna, as such Smt Shailja Krishna controlled around 98% of shares.  On 01.02.2007 husband of Shailja Krishna   resigned and Mr Nirupam Mishra  was appointed as Director. On 17.10.2010, appellant is claimed to have resigned.  On 17.10.2010 itself, it is claimed that Appellant transferred her whole share in the name of her mother-in-law vide gift deed.

During 2009-10, disputes arose between Shailja Krishan and her husband. Shailja Krishna filed several complaints including one wherein she claimed that her name has been removed from list of shareholder and her shareholding is shown to transferred in the name of her mother-in-law. This complaint resulted in registration of FIR 105/2013 under Section 406, 419, and 420 of IPC.

Extraordinary general meeting was held on 20.06.2011 wherein husband of Shailja Krishna  was appointed as director.

The Appellant also filed Company Petition before NCLT which set aside resolutions dated 15.12.2010 and 17.10.2010  and  declared share transfer dated 18.11.2011 void. It also directed the company to reinstate the Shailja Krishan as director and also directed her mother-in-law  to hand over the transfer certificates.

The NCLAT set aside the orders of the NCLT and held that that NCLT does not have jurisdiction to decide issues of fraud, manipulation and coercion; more so, in the exercise of its summary jurisdiction when examination of elaborate evidence is required.  The matter finally reached to the Supreme Court.

FINDINGS OF THE SUPREME COURT

The Supreme Court relied on Radharamanan v. Chandrasekara Raja, (2008) 6  SCC 750, Kamal Kumar Dutta Vs Ruby General Hospital Ltd  (2006) 7 SCC 613  and Tata Consultancy Services Ltd. v. Cyrus Investments (P) Ltd (2021) 9 SCC 449 and held that  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. Such power is, however, subject to any other legislative enactment specifically debarring the NCLT/CLB from exercising its powers in this respect. The Supreme Court observed that NCLT had jurisdiction to determine validity of gift deed.

The Supreme Court observed that the Appellant was the victim of oppression and mismanagement in the instant case for two reasons: first, that the circumstances surrounding the gift deed and the subsequent transfer of shares are seriously questionable and must be declared invalid and secondly, the board meetings have been conducted in a mala fide manner and against both the statutory requirements of the 1956 Act and the internal regulations of the Company. Both of these instances show that the affairs of the Company were being conducted in a manner prejudicially affecting the Appellant

The supreme Court also noted that Gift Deed was in violation of AOA as it prohibits transfer to Mother -in- Law.

The Supreme Court also found the execution of gift deed questionable since the deed specifically mentions it being purportedly executed by the Appellant to mother-in-law out of “love and affection”. However, what paints a divergent image is that the mother-in-law on 01.06.2013 lodged an FIR alleging that the appellant purportedly committed acts constituting breach of trust qua family jewellery on 17.12.2010, i.e., the very date that the Share Transfer Form was purportedly signed by the Appellant.

The Supreme Court also noted that the share transfer form was purportedly signed by the Appellant after the extended period and such transfers cannot be upheld by this Court in good conscience and there is clear overwriting and mismatch of dates on the share transfer form.

The Supreme Court set aside the judgment of NCLAT and restored the judgment of the NCLT.

_____________________________________________________________