Judicial interference in corporate governance matters should be minimal and only justified in clear statutory violation cases.

JUDGMENT :

ANIL KSHETARPAL, J.

1. The present Appeals have been filed by the Appellant Company under Section 37 (1)(b) of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as “the Act”] read with Section 13 (1A) of the Commercial Courts Act, 2015 , assailing the Order(s) dated 09.06.2025 [hereinafter referred to as the “Impugned Order”] passed under Section 9 of the Act by the learned District Judge, (Commercial Court)-01, South-East District, Saket Courts, New Delhi [hereinafter referred to as the “District Judge”], whereby the Appellant Company has been restrained from convening Board Meetings dated 15.04.2025 and 12.05.2025 concerning the proposed removal of the Respondent(s) from the Directorship of the Appellant Company.

2. These are two connected Appeals arising from similar facts and involving the same Appellant. With the consent of learned counsel for the parties, they are being heard and disposed of by this common order. For the sake of convenience, the facts are being drawn from FAO (COMM) 164/2025 captioned Drharors Aesthetics Private Limited v. Rahul Shawel.

FACTUAL MATRIX:

3. A dispute arose between the Appellant Company, engaged in the business of dermatological and aesthetic services, and the Respondent, its erstwhile Director. Pursuant to a Memorandum of Understanding dated 23.09.2023, executed between the Respondent, Dr. Navnit Haror, Dr. Vineeta Pathak, and Mr. Debdulal Banerjee, it was agreed to incorporate a new entity for the purpose of expanding the business, with specific roles delineated for each party. In terms thereof, the Respondent was entrusted with responsibilities relating to growth, franchise development, marketing, and day-to-day operations. Subsequently, he was appointed as a Director by way of an Executive Employment Agreement dated 19.10.2023, entitling him to monthly remuneration and certain shareholding rights, as further detailed in a Shareholders‟ Agreement dated 08.11.2023.

4. It is the case of the Respondent that pursuant to his efforts, the Appellant Company significantly expanded its operations within a short span of time. However, in March 2025, several disputes arose between the parties. The Respondent alleged that he was abruptly denied access to official email systems, his salary was withheld, and he was served with short-notice communications convening Board Meetings, initially on 01.04.2025, and later re-scheduled to 04.04.2025 and 15.04.2025, without being furnished with any particulars or reasons for the proposed deliberations, which ultimately included consideration of his removal from Directorship.

5. It is further contended that despite repeated requests, the Respondent was not furnished with any documentation substantiating the alleged financial irregularities or operational mismanagement cited against him. Instead, on 09.04.2025, a special notice and agenda were issued for convening a Board Meeting on 15.04.2025, the stated purpose of which was the proposed removal of the Respondent and another Director. The Respondent contended that such actions were arbitrary and in breach of the contractual and statutory protections available to him. Invoking the arbitration clauses contained in the Employment Agreement and Shareholders‟ Agreement, the Respondent approached the Commercial Court under Section 9 of the Act, seeking interim relief restraining the Appellant Company from proceeding with the said Board Meeting. It was contended that the notices issued for convening the Board Meetings and the proposed Extraordinary General Meeting („EGM‟) were violative of Section 169 of the Companies Act, 2013 , inasmuch as the Respondent was not afforded a reasonable opportunity of being heard prior to the proposed removal. It was further alleged that no reasons or material justifying such r