Recently, the Hon’ble Supreme Court of India in Mrs. Shailja Krishna vs. Satori Global Limited & Ors., held that the National Company Law Tribunal (NCLT) has jurisdiction to examine allegations of fraud and determine the validity of documents while adjudicating complaints of oppression and mismanagement under the Companies Act.

In this case, the Appellant, who was holding 98% of the company’s shares and serving as Executive Director, alleged that she was fraudulently ousted by her husband and in-laws. The allegations included fabrication of a gift deed transferring her shares, board resolutions for her removal without notice or quorum, and false records of resignation. While the NCLT restored her directorship and shareholding, the NCLAT reversed the decision, holding that issues of fraud and validity of the gift deed fell outside NCLT’s “summary jurisdiction.”

The Supreme Court, relying on Tata Consultancy Services Ltd. v. Cyrus Investments (P) Ltd. (2021), clarified that the NCLT/CLB possesses wide jurisdiction to adjudicate all matters incidental or integral to oppression and mismanagement, unless specifically barred by law. The Court observed that the validity of the gift deed was “central and integral” to the dispute and thus squarely within NCLT’s jurisdiction.

The Court held that the Appellant was a victim of oppression and mismanagement, finding the gift deed invalid and the board meetings mala fide and contrary to statutory and internal company regulations. Restoring the NCLT’s decision, the Court emphasised that acts of fraud cannot be strategically framed to oust NCLT’s jurisdiction.