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2026 Supreme(SC) 602

SUPREME COURT OF INDIA
Vikram Nath, Sandeep Mehta, JJ.
Hindustan Medical Institution – Appellant
Versus
Birla Corporation Limited & Ors. – Respondents
Civil Appeal No. 8205 of 2026 (Arising Out of SLP (C) No. 1182 of 2023) With Civil Appeal No. 8206 of 2026 (Arising out of SLP (C) No. 1183 of 2023) And Civil Appeal No. 8206 of 2026 (Arising out of SLP (C) No. 23145 of 2022) And Civil Appeal No. 8208 of 2026 (Arising out of SLP (C) No. 1185 of 2023) And Civil Appeal No. 8209 of 2026 (Arising out of SLP (C) No. 1187 of 2023) And Civil Appeal No. 8210 of 2026 (Arising out of SLP (C) No. 22799 of 2022)
Decided On : 26-05-2026

Advocates appeared:
For the Petitioner(s): Ms. Madhavi Divan, Sr. Adv. Mr. Kunal Vajani, Adv. Mr. Kunal Mimani, AOR Mr. Shubhang Tandon, Adv. Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. Nalin Kohli, Sr. Adv. Mr. Avishkar Singhvi, Adv. Mr. Akash Agarwal, Adv. Mr. Ashish Choudhury, Adv. Mr. Abhishek Arora, Adv. Ms. Prachi Grover, Adv. Mr. Yash Johri, Adv. Ms. Sakshi Raman, Adv. Mr. Anshul Malik, Adv. Mr. Ayuushman Aroraa, Adv. Mr. Rohit Amit Sthalekar, AOR
For the Respondent(s): Ms. Rohini Musa, AOR Mrs. Vanita Bhargava, Adv. Mr. Ajay Bhargava, Adv. Ms. Phalguni Nigam, Adv. Mr. Vishal Srivastava, Adv. M/S. Khaitan & Co., AOR Ms. Pallavi Langar, AOR Dr. Abhishek Manu Singhvi, Sr. Adv. Mr. Akash Agarwal, Adv. Mr. Ashish Choudhury, Adv. Mr. Abhishek Arora, Adv. Ms. Prachi Grover, Adv. Mr. Yash Johri, Adv. Mr. Rohit Amit Sthalekar, AOR Mr. Ankur Chawla, Adv. Mr. Aditya Samaddar, AOR Mr. R K Mohit Gupta, Adv. Mr. Darius Khambata, Sr. Adv. Ms. Madhavi Divan, Sr. Adv. Mr. Debanjan Mandal, Adv. Mr. Kunal Vajani, Adv. Mr. Sanjiv Kumar Trivedi, Adv. Mr. Sanket Sarawgi, Adv. Mr. Shubhang Tandon, Adv. Ms. Mahima Cholera, Adv. Mr. Kunal Mimani, AOR Mr. Sumeer Sodhi, AOR Mr. Harshit Joshi, Adv. Mr. Adiraj Bali, Adv. Mr. Adirja Bali, Adv. Mr. Shrey Kapoor, AOR Mr. Vikrant Pachnanda, AOR

Constitutive documents permitting majority delegation supersede general requirements for trustee unanimity. Corporate voting rights are derived from the hierarchical internal structure; therefore, priority in voting time cannot validate an act lack of lawful authorization, as valid authority is the foundational prerequisite for any exercise of power.

Headnote:(A) Trusts Act, 1882 - Section 48 - Companies Act, 2013 - Section 108 - Companies (Management and Administration) Rules, 2014 - Rule 20 - Interpretation of governing by-laws - Where a governing instrument provides for delegation of authority by a majority, the requirement for unanimity among trustees is dispensed with, rendering majority-backed decisions valid. (Paras 13, 14, 15)

(B) Internal Governance - Two-tier structure of management - Property and voting rights vest in the board of trustees; managing committees possess derivative authority only, which cannot be equated to the board unless specifically delegated, thereby subordinate to the board in matters of essential asset-related decisions. (Paras 20, 21, 22)

(C) Voting Procedure - Chronology versus authority - Rules governing electronic voting require verification of the authority behind the vote; priority in time cannot substitute for lawful authorization, and unauthorized votes remain invalid regardless of the speed at which they were cast. (Paras 27, 29, 31)

Facts of the case:
Multiple civil appeals originated from disputes over the exercise of voting rights attached to shares held by three entities. The central conflict concerned the internal governance mechanisms, specifically whether trustees were required to act unanimously to authorize voting, and whether the managing committee and the board of trustees held equal authority. Additionally, the validity of a 'first-come' rule for electronic voting was challenged when rival factions within the entities claimed competing authority to cast votes.

Findings of Court:
The Court held that the governing documents of the entities contained express provisions for delegation, overriding general statutory requirements for unanimity. It further clarified that the management structure is distinctive, with the board functioning as the primary authority and the managing committee as a delegate. Consequently, voting rights related to assets vest in the board, and any voting act must be verified for its legal foundation rather than mere chronological priority.

Issues: The main issues were: (1) whether trustees are required to act in consonance; (2) whether the power to exercise voting rights resides inherently in the board of trustees; and (3) whether the timing of a vote determines its legality under the electronic voting framework.

Ratio Decidendi: The court ruled that the provisions of a governing instrument effectively exclude the general statutory default requiring unanimous action among co-trustees. Furthermore, statutory procedures for electronic voting protect against duplication but do not validate unauthorized acts based on timing; the legitimacy of a vote is fundamentally tied to the existence of valid authority derived from the entity's own regulatory framework.

Result: Appeals allowed.

Table of Content
1. procedural history and factual background of the voting rights dispute. (Para 1 , 2 , 3 , 5)
2. summary of conflicting party contentions regarding voting authority and chronology. (Para 4)
3. trustee decisions are valid by majority if governing bylaws permit delegation. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17)
4. board of trustees and managing committee have distinct, non-interchangeable hierarchies. (Para 18 , 19 , 20 , 21 , 22 , 23 , 24)
5. voting validity is determined by lawful authority, not by chronological priority of casting. (Para 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32)
6. appellate judgment set aside; voting validity requires proper internal authorization. (Para 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43)

JUDGMENT :

VIKRAM NATH, J.

1. Leave granted.

2. The present appeals arise out of the common judgment and order dated 26.09.2022, as corrected by order dated 27.09.2022, passed by the Division Bench of the High Court (hereinafter referred to as “Division Bench”) at Calcutta in APOT Nos. 180, 181 and 182 of 2022. By the impugned order, the Division Bench disposed of the said appeals and affirmed the orders dated 16.09.2022 passed by the Single Judge of the High Court (hereinafter referred to as “Single Judge”) in G.A. No. 1 of 2022 in C.S. Nos. 212, 213 and 214 of 2022. The appellants in SLP (C) No. 1182 of 2023, SLP (C) No. 1183 of 2023 and SLP (C) No. 23145 of 2022 are, respectively, Hindustan Medical Institution, Eastern India Educational Institution and Belle Vue Clinic. Each of them is a society registered under the West Bengal Societies Registration Act, 1961 (hereinafter referred to as the “1961 Act”). The appellant in SLP (C) No. 1185 of 2023, SLP (C) No. 1187 of 2023 and SLP (C) No. 22799 of 2022 is Ms. Anamika Lodha. Respondent No. 1 in each of the three suits is Birla Corporation Limited (hereinafter referred to as the “BCL”). SLP (C) No. 1183 of 2023 arises out of APOT No. 180 of 2022 in C.S. No. 212 of 2022 concerning Eastern India Educational Institution. SLP (C) No. 1182 of 2023 arises out of APOT No. 181 of 2022 in C.S. No. 213 of 2022 concerning Hindustan Medical Institution. SLP (C) No. 23145 of 2022 arises out of APOT No. 182 of 2022 in C.S. No. 214 of 2022 concerning Belle Vue Clinic. The connected appeals by Ms. Anamika Lodha, namely, SLP (C) No. 1185 of 2023, SLP (C) No. 1187 of 2023 and SLP (C) No. 22799 of 2022, correspond respectively to APOT Nos. 180, 181 and 182 of 2022. All six appeals are directed against the same impugned order and arise out of the three suits instituted in relation to the exercise and consideration of voting rights attached to the shares held by the three societies in BCL. For the sake of convenience and clarity, SLP (C) No. 1182 of 2023 shall be treated as the lead matter, and the facts shall be noticed principally from the record of the said appeal except where a distinct fact from the connected matters requires specific reference.

3. The facts giving rise to the present appeals are as follows:

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2026 Supreme(SC) 602

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