In Brief
A private company was controlled by the Gupta Group, which removed minority shareholders (Sanwalka Group) from the board, forfeited their shares, issued bonus shares and new equity shares only to itself, and converted preference shares to equity shares—all allegedly to reduce the minority to negligible shareholding. The Company Law Board upheld the minority's petition alleging oppression, and the High Court affirmed. The Supreme Court held that the forfeiture was procedurally invalid, the bonus shares were unauthorised by the Articles, and the 25,000 new shares should be allotted proportionately. The preference share conversion was struck down as unreliable given the majority's self-serving conduct. The Court thus dismissed the majority group's appeal and disposed of the minority's appeal with directions for proportionate allotment."
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