1. Dispute over validity of board resolution authorizing voting representatives in subsidiary meetings – Conflict with Articles of Association. (Para 2 , 3 , 4 , 8 , 9 , 10 )
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2026 Supreme(Online)(NCLT) 2469
NATIONAL COMPANY LAW TRIBUNAL
JAGRAN MEDIA NETWORK INVESTMENT PRIVATELIMITED – Appellant
Versus
Mahendra Mohan Gupta – Respondent
COMP.APPL - 4/2026
Advocates:
For the Petitioner:Ruchira Gupta
For the Respondent:VARAD NATH
For the Petitioner:Ruchira Gupta
For the Respondent:VARAD NATH
Headnote:(A) Companies Act, 2013 - Sections 100, 113, 241, 242(4) - National Company Law Tribunal Rules, 2016 - Rule 32 read with Rule 11 - Corporate governance - Majority shareholder rights - Validity of board resolution appointing authorized representative to vote at subsidiary's meetings - A board resolution passed by a majority shareholder to appoint its authorized representative under Section 113 supersedes any earlier resolutions, and until stayed, the said resolution remains valid and enforceable - However, when the validity of such a resolution is sub judice in the main proceedings, granting interim relief that would effectively enforce the resolution would pre-empt a final decision on its merits. (Paras 8-9, 32-36)
(B) Companies Act, 2013 - Section 100 - Right of members to requisition an Extraordinary General Meeting - The right to requisition an EGM is a statutory right; but, where the purpose of the EGM is to remove directors whose appointment itself is based on a disputed authorization of voting, the Tribunal may defer the EGM in the larger interest of public shareholders, pending adjudication of the underlying dispute. (Paras 18, 35-36)
(C) Company Law - Interim relief - Principle of not pre-judging main issues - A tribunal should not pass an interim order that would, in effect, decide a substantial issue pending in the main petition, especially where the validity of the foundational resolution is under challenge. (Paras 32-36)
Facts of the case:
The holding company (JMNIPL), holding 67.97% shares of its subsidiary (JPL), passed a board resolution on 14.07.2023 appointing two directors as its authorized representatives under Section 113 of the Companies Act to vote at all general meetings of JPL, superseding any earlier authorization given to another individual (Petitioner No.1). The resolution was challenged by Petitioner No.1 in CA No.30/2023, but no stay was granted. Despite this, Petitioner No.1 continued to cast votes on behalf of JMNIPL at JPL's meetings using a passcode (OTP) he retained. Based on this voting, certain independent directors were appointed/reappointed on JPL's board. Subsequently, JMNIPL issued a requisition under Section 100 to convene an EGM of JPL to remove these independent directors. JPL and other parties filed applications seeking to restrain the EGM, while JMNIPL and its authorized representatives sought directions to enforce the 14.07.2023 resolution and allow them to vote.
Findings of Court:
The Tribunal held that while the 14.07.2023 resolution had not been stayed, its validity in light of the Articles of Association was still sub judice in the main petition. Granting the relief sought in the present applications (either enforcing the 14.07.2023 resolution or restraining the EGM) would amount to pre-judging the merits of the disputed resolution. The interim order deferring the EGM was vacated. All three company applications were dismissed, with liberty to the parties to proceed as per the provisions of the Companies Act, 2013.
Issues: Whether the Tribunal should grant interim relief directing the enforcement of a board resolution (dated 14.07.2023) to allow specific persons to vote at an EGM, when the validity of that resolution is under challenge in pending proceedings; and whether the Tribunal should restrain a holding company from requisitioning an EGM to remove directors whose appointment itself is disputed.
Ratio Decidendi: An interim order that would effectively crystallize the rights of the parties on a substantial issue pending in the main petition (such as the validity of a board resolution) should not be passed. To do so would pre-empt a final decision on the merits of the pending application (CA No.30/2023) and the main company petition.
Result: C.A. Nos. 04 of 2026, 05 of 2026, and 06 of 2026 are dismissed. The interim order dated 27.02.2026 deferring the EGM stands vacated. Parties are at liberty to proceed as per the Companies Act, 2013. (Paras 37-38) Keywords: corporate governance, majority shareholder rights, board resolution, authorized representative, voting rights, requisition of EGM, removal of directors, sub judice, interim relief, NCLT jurisdiction Main Legal Point: A tribunal should not grant interim relief enforcing a board resolution whose validity is under challenge in the main petition, as doing so would pre-judge the merits of the pending dispute. Category: Company Law Sub-category: Oppression and Mismanagement Keywords: corporate governance, majority shareholder rights, board resolution, authorized representative, voting rights, requisition of EGM, removal of directors, sub judice, interim relief, NCLT jurisdiction
Legal Category Hierarchy
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company law
- shareholders' rights
- corporate governance
- meetings
- directors
- practice and procedure
Table of Contents
2. Applicant argues resolution valid under Section 113; Respondents argue Articles of Association and pending challenge preclude enforcement. (Para 7 , 11 , 14 , 19 , 27 )
3. Applications dismissed; interim stay on convening extraordinary general meeting vacated; parties at liberty to proceed per Companies Act. (Para 36 , 37 , 38 )
4. Should a court enforce a board resolution under Section 113 of the Companies Act, 2013, when its validity is under challenge in a pending proceeding?
No, if granting enforcement would tantamount to reaffirming and approving the resolution without final adjudication, thereby pre-empting the main dispute. (Para 32 , 33 , 34 , 36 )
5. Should a court restrain a company from convening an extraordinary general meeting requisitioned based on a challenged board resolution?
No, if such restraint would pre-empt the merits of the validity of the resolution and the main petition. (Para 33 , 34 , 36 )
6. What is the proper approach when a board resolution is under challenge but no stay has been granted?
The court should not grant interim relief that would effectively decide the dispute or pre-empt the main adjudication, even if no stay operates. (Para 32 , 34 , 36 )
ORDER
1. This order of ours shall deal with three applications, namely CA No. 4/2026, CA No. 5/2026, and CA No. 6/2026, as common questions of fact as well as law are involved in all these applications.
CA No.4/2026
2. This application has been filed by the Jagran Media Network Investment Private Limited (hereinafter referred to as “Applicant”/ “JMNIPL”/ “Applicant Company”), who is stated to be Respondent No.18 in the main Company Petition No.64/2023. The following prayer has been made in the present application:
(A) Direct that voting in the Shareholders meeting of JPL be carried out strictly in terms of the Board Resolution dated 14.07.2023 and only by a person so authorized and by no other person;
(B) Direct that JPL's Company Secretary and Scrutinizers verify the Board authorization dated 14.07.2023 passed by the Board of JMNIPL before accepting votes cast on behalf of JMNIPL;
(C) Restrain in the interim the Independent Directors on the Board of JPL from participating or voting in the Board meetings, NRC meetings of JPL;
(D) Pass any other order or grant any other relief(s) as this Hon'ble Tribunal may deem fit.
3. As stated in the application, the Applicant Company presently holds 67.97% of the paid-up equity share capital of Respondent No. 19 Company in main company Petition No. 64/2023 and Respondent No. 21 in the instant Application, namely Jagran Prakashan Limited (“JPL”/ “Respondent No. 19 Company”), thereby constituting the Applicant Company as the holding company of JPL being majority shareholder and entitling it to exercise controlling rights as majority shareholder in JPL through its authorised representative in terms of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”), and the Articles of Association (“AoA”) of JPL.
4. The primary grievance as raised by the Applicant Company in the Application is regarding continued exercise of alleged illegitimate control by Mr. Mahendra Mohan Gupta (Petitioner No.1 in the Main Company Petition) over JPL' s Board and management, and systematically suppressing the legitimate exercise of rights by the JMNIPL being majority shareholder.
5. As contended in the Application that Petitioner No.1 is a member of the Gupta Family promoter group and holds only 9.21% shares in JMNIPL, however being former Chairman and Managing Director of JPL (a position he held until 2023) , he continues to wield significant de facto influence over JPL's operations through unauthorized exercise of authority and systematic manipulation of governance processes of JPL despite not being authorised by JMNIPL to act on its behalf.
6. It is alleged that such control over JPL has been exerted by Petitioner No.1 by fraudulently casting votes on behalf of JMNIPL at JPL's general meetings despite express revocation of authorization by JMNIPL's Board, and illegally appointing Independent Directors of his choice in JPL with a view to entrenching control over the Board of JPL.
7. The Applicant further submits that Petitioner No.1 has acted without authority and in contravention of law by purporting to represent JMNIPL at the Annual General Meetings (“AGMs”) of JPL and by casting votes on its behalf in direct violation of clear and duly passed Board Resolutions of JMNIPL, which had expressly revoked his authorization and prescribed specific voting positions contrary to those adopted by him.
8. It is further stated that, in terms of the resolution dated 14.07.2023, which has been passed by the majority of the shareholders of the Applicant Company, two of its directors, namely Sh. Dhirendra Mohan Gupta and Sh. Sanjay Gupta have been appointed authorized representatives under Section 113 of the Companies Act, 2013, with specific instructions being holding company of JPL to cast a vote as the authorised representative of the Applicant Company in all the general meetings of the JPL on various agenda items including the appointment and re-appointment of directors.
9. The r
