NCLT Empowered to Rule on Gift Deed Executed by Shareholder | SC

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  • Last Updated on 6 September, 2025

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NCLT Jurisdiction on Gift Deed SC

Case Details: Mrs. Shailja Krishna vs. Satori Global Ltd. - [2025] 178 taxmann.com 70 (SC)

Judiciary and Counsel Details

  • Dipankar Datta & K. Vinod Chandran, JJ.
  • Ankur Mittal, Aor for the Appellant
  • S Niranjan Reddy, Gopal Sankaranarayanan, Sr Advs., Ashutosh Jha, Ms Sansriti Pathak, Aors, Ashutosh Gupta, Gaurav Rana, Oleander D Singh, Shivam Tomar, Ms Meha Ashok Agarwal, Shourya Dasgupta, Ms Trisha Chandran & Aman Prasad, Advs. for the Respondent

Facts of the Case

In the instant case, the appellant and her husband were the original promoters of the company ‘S’. The appellant transferred her entire shareholding in company ‘S’ to R4 (her mother-in-law) by executing a gift deed. The appellant filed a complaint under section 241 of the Companies Act, 2013, alleging oppression and mismanagement.

The NCLT, by its order, held that the complaint was maintainable and that the gift deed was invalid. The NCLAT set aside the order of the NCLT on the ground that it did not have the jurisdiction to decide issues of fraud, manipulation and coercion. Thereafter, an appeal was made before the Supreme Court.

It was noted that where the circumstances surrounding gift deed and subsequent transfer of shares were seriously questionable and must be declared invalid and board meetings had been conducted in a mala fide manner and against both statutory requirements of the 1956 Act and internal regulations of the Company, both of these instances showed that affairs of Company were being conducted in a manner prejudicially affecting the appellant and, thus, the appellant was victim of oppression and mismanagement.

Supreme Court Held

The Supreme Court held that since determination of validity of gift deed was central to decision in the instant case, the NCLT had the full jurisdiction to decide whether gift deed was valid or not, or whether it was against provisions of the Companies Act, 1956 Act and/or internal regulations of the Company, including but not limited to AoA and Memorandum of Association.

Thus, interference by the NCLAT with the judgment and order of the NCLT was quite unnecessary, and, therefore, the NCLAT order was to be set aside, and the order of the NCLT was to be restored.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied