In Brief
The Supreme Court upheld the High Court's decision setting aside share allotments and transfers made by Hotel Queen Road Pvt. Ltd. (HQRL) in three Board meetings (27 July 2004, 7 January 2005, and 10 May 2005). The Court found the meetings violated the mandatory requirement to notify all Directors under section 286 of the Companies Act, breached fiduciary duties under section 300 (as interested Directors voted on their own benefits), and violated section 108 (share certificates were not physically present). Though isolated illegality may not constitute oppression, the series of illegal acts designed to exclude minority shareholders (particularly Ashok Mittal and Hillcrest, who had substantial financial interest) from participation amounted to oppressive and mismanaged conduct. The Court set aside the direction to prosecute Ram Prakash Mittal but upheld the cancellation of the disputed share allotments and transfers.
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