No Legitimate Expectation to Board Seat | NCLAT

Case Details: Surinder Singh v. Achintya Healthcare (P.) Ltd. - [2025] 174 taxmann.com 945 (NCLAT-New Delhi)

Judiciary and Counsel Details

• Yogesh Khanna, Judicial Member & Ajai Das Mehrotra, Technical Member
• Ms Anju Jain, Hitesh, Rohit & Ms Prachie Jain, Advs., for the Appellant.
• Gaurav Mitra, Mayank Wadhwa, Shorya Goel, Ms Aarushi Mishra & Sumeet Batra, Advs., for the Respondent.

Facts of the Case

In the instant case, the appellant was appointed as an Additional Director of the respondent company. The appellant alleged that the respondent company was declared a Non-Performing Asset (NPA), and hence, the appellant infused capital for the revival of the company and was given a seat on the Board.

However, a notice was issued to hold an Extraordinary General Meeting (EOGM), one of the agenda items being the removal of the appellant from the Board of Directors, but respondents later withdrew the notice.

The appellant filed a petition before the NCLT alleging various acts of oppression and mismanagement committed by the respondents. The NCLT, in the impugned order, held that the alleged acts of oppression and mismanagement were not sustainable. Thereafter, an appeal was made before the NCLAT against the order passed by the NCLT.

NCLAT Held

The NCLAT observed that there was no illegality in the impugned order as it related to the removal of appellant No.1 as an Additional Director.

The NCLAT held that the NCLT had aptly dealt with all allegations in its judgement. Therefore, the appeal had no force, and it was to be dismissed. Further, the shareholder cannot seek relief of their appointment as a director on the doctrine of legitimate expectation.

List of Cases Reviewed

• Order of NCLT- New Delhi in CP-5/ND/2022, dated 16-10-2023 [Para 21]; affirmed.
• Mahima Datla v. Dr. Renuka Datla and Ors., Civil Appeal No.2776 of 2022 [Para 16]; distinguished.
• Tata Consultancy Services Ltd. v. Cyrus Investment (P.) Ltd. (2021) 9 SCC 449 [Para 20]; followed.

List of Cases Referred to

• Krishnaprasad Jwaladutt Pilani v. Golaba Land and Mills Co, AIR 1960 Bom 312 (para 17)
• P. Natarajan v. Central Government 2003 SCC OnLine Mad 878 (para 18)
• Opinion that shareholder cannot seek relief of his appointment as a director on a doctorine of legitimate expectation.
• In v. Krishnan and Ors v. Westford Hi-Tech Hospital Ltd and Ors (2008) 3 SCC 363 (para 19)
• Tata Consultancy Services Ltd v. Cyrus Investment Pvt Ltd (2021) 9 SCC 449 (para 20).