Shailja Krishna Vs Satori Global Limited & Ors. (Supreme Court of India)
Gift Deed to Mother-in-Law Struck Down – Fraudulent Share Transfer Invalid – NCLT Can Decide Fraud Issues in Oppression & Mismanagement Cases – Supreme Court Restores Majority Shareholder
In a landmark ruling, the Supreme Court in restored the NCLT’s order & set aside the NCLAT’s decision, declaring the alleged gift deed & share transfers invalid & reinstating Mrs. Shailja Krishna as the lawful majority shareholder & Director of the Company.
FACTS
- The Company was incorporated in 2006 as Sargam Exim Pvt. Ltd. (later renamed Satori Global Ltd.).
- Appellant, Mrs. Shailja Krishna, originally subscribed to 5,000 shares. Through further allotments & transfers, she came to hold 39,500 out of 40,000 shares (98%) by 2007.
- On 17.12.2010, she was shown to have-
(a) Resigned as Director &
(b) Executed a Gift Deed transferring her entire shareholding to her mother-in-law.
- She alleged coercion & forgery, filing multiple police complaints. Later, she discovered her name was removed from the register of members.
- NCLT (Allahabad Bench, 04.09.2018): Allowed her petition u/s 397 & 398, held the gift deed & share transfer void, restored her as shareholder & Director.
- NCLAT (02.06.2023): Reversed NCLT, holding that allegations of fraud & coercion required civil court jurisdiction.
- Supreme Court: Appeal filed by Mrs. Shailja Krishna.
ISSUES
- Was the company petition maintainable u/s 397 & 398 of Companies Act, 1956?
- Did NCLT have jurisdiction to adjudicate on the validity of gift deed & share transfer?
- Were the gift deed & share transfer forms valid?
- Did the acts amount to oppression & mismanagement?
SUPREME COURT’S ANALYSIS
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