NCLAT Allows Jagran EOGM but Keeps Director Removal Resolutions in Abeyance

Jagran Prakashan Limited Vs Mahendra Mohan Gupta & Ors. (NCLAT Delhi)

Companies Act, 2013 – Sections 10(1), 100, 113, 169, 178(2); SEBI (LODR) Regulations, 2015 – Regulations 17(1), 25(2A) – appeal against NCLT order permitting parties to proceed with requisitioned EOGM for removal of seven independent directors and one whole-time director, amidst pending disputes over Article 4.1 of the holding company’s Articles and Board resolutions concerning voting authority. Held that the questions regarding validity and effect of Article 4.1, resolution dated 14.07.2023, and related developments had not been decided by NCLT, and the Appellate Tribunal could not travel beyond the impugned order to determine them for the first time. Since the appellant company itself had already initiated the EOGM process and issued notices, no stay on the holding of the EOGM was warranted. However, the implementation of any resolution passed in the meeting dated 29.05.2026 was directed to be kept in abeyance till disposal of Company Petition No.64/2023. Appeal disposed of.

Facts of the Case

• The appeal challenged the order dated 23.04.2026 passed by the NCLT, Allahabad in CA No.5/2026 in CP No.64/2023, to the extent the application filed by the appellant was dismissed.
• The appellant is a public listed company engaged in printing and publishing newspapers, magazines and journals, listed on NSE and BSE, with more than 70,000 public shareholders holding roughly 31% of its paid-up share capital.
• Jagran Media Network Investment Pvt. Ltd. held 67.97% of the appellant’s paid-up equity share capital and was described as a family-owned investment vehicle of six branches of the Gupta family.
• Respondent No.1 was Chairman and Managing Director of the appellant from 01.01.2005 to 30.09.2023. Disputes arose among promoter factions concerning nomination rights under the Articles of Association and competing proposals for appointment of the Managing Director.
• According to Article 4.1 of JMNIPL’s Articles of Association, each promoter had irrevocably appointed Respondent No.1 as agent and attorney-in-fact to exercise all rights of the promoters under those Articles, with the promoters acting as a single unit.
• A resolution dated 14.07.2023 was passed revoking Respondent No.1’s authority to represent JMNIPL at the appellant’s meetings and appointing other authorised representatives. The validity of that resolution was challenged in CA No.30/2023, which remained pending.
• Another application, CA No.58/2023, challenged the proposed amendment to JMNIPL’s Articles, particularly deletion or dilution of Article 4.1. By interim order dated 08.12.2023, the NCLT directed that the proposed amendment should not be given effect to till further orders.
• In proceedings concerning urgent directions regarding management, the NCLT by orders dated 27.09.2023 and 04.10.2023 introduced a governance framework in which independent directors assumed a central role in engagement between rival factions and governance oversight functions.
• Independent directors were appointed or reappointed on 10.08.2024 with Board approval and their appointment or reappointment was confirmed in general meetings held on 24.09.2024 and 19.09.2025.
• After a Board meeting on 07.12.2025, certain respondent directors challenged the appointment of the independent directors, alleging they had been wrongly elected on votes wrongly cast by Respondent No.1.
• On 12.02.2026, a special notice and requisition under Section 100 of the Companies Act, 2013 sought removal of seven independent directors and one whole-time director on the basis of alleged irregularity in Respondent No.1’s exercise of voting rights on behalf of JMNIPL at the AGMs of 24.09.2024 and 19.09.2025.
• The appellant filed CA No.5/2026 seeking protective directions against the requisition process. CA No.4/2026 and CA No.6/2026 were also filed by JMNIPL and certain other respondents seeking directions that voting in meetings of the appellant be in accordance with the resolution dated 14.07.2023.
• By interim order dated 27.02.2026, the NCLT directed that the requisition for EOGM dated 12.02.2026 be kept in abeyance, citing institutional and governance concerns and public interest. The impugned order later removed that stay and directed parties to proceed as per the Act.
• The appellant thereafter issued notice dated 02.05.2026 for an EOGM to be held on 29.05.2026 and also informed the stock exchanges on 05.05.2026.

Contentions of the Parties

• The appellant contended that Article 4.1 vested irrevocable authority in Respondent No.1 to exercise voting rights on behalf of JMNIPL and that any EOGM voting contrary to Article 4.1 or without NRC recommendation under Section 178(2) for removal of the independent directors and whole-time director would be void.
• The appellant argued that the respondents had failed in their attempt before the NCLT to secure enforcement of the resolution dated 14.07.2023, that the validity of Article 4.1 and proposed amendment thereto remained sub judice, and that the EOGM could not be allowed to proceed by ignoring Article 4.1.
• The appellant also submitted that the independent directors represented the interests of public minority shareholders, were part of key committees, and that removal of seven out of nine independent directors would skew the Board in favour of promoters.
• The respondents contended that the question was not who should vote on behalf of JMNIPL, since under Section 113 JMNIPL as a corporate member could authorise any person by Board resolution to act as its representative at meetings of the appellant.
• The respondents argued that Article 4.1 applied only to JMNIPL and did not bind the appellant company; the resolution dated 14.07.2023 had not been stayed; and none of the individual directors had appealed against the impugned order regarding holding of the EOGM.
• The respondents further argued that the appellant itself had implemented the impugned order by issuing notices for the EOGM and could not thereafter seek an injunction against holding the meeting.
• The respondents submitted that Section 169 entitled shareholders to remove directors, that representations under Section 169(4) had already been made by the independent directors, and that staying the EOGM would be contrary to corporate democracy and the will of the majority.
• On Section 178(2), the respondents argued that NRC recommendation was not a pre-condition for calling a meeting under Section 169 and that Section 169 was a stand-alone provision.
• The respondents also argued that the Company Secretary lacked authority to file the appeal in the absence of a Board resolution cancelling the Board resolution dated 02.05.2026.
• In rejoinder, the appellant submitted that the company was under a legal obligation to convene the EGM on requisition under Section 100 and that the appeal, filed by the Company Secretary and CFO under a Board resolution dated 24.09.2023, was validly instituted.

Issues

• Whether the Appellate Tribunal should stay the holding of the EOGM dated 29.05.2026 requisitioned for removal of seven independent directors and one whole-time director.
• Whether the Appellate Tribunal could decide, in the appeal, issues relating to the validity and effect of Article 4.1 of JMNIPL’s Articles of Association, the resolution dated 14.07.2023, and the Board resolution dated 26.07.2012, when those issues had not been decided by the NCLT.
• What interim arrangement ought to be made pending adjudication of Company Petition No.64/2023 and the unresolved disputes concerning voting authority and related Articles.

Decision