Company Law Updates (April 2026)

TABLE OF CONTENTS

• Satinder Singh Bhasin v. Government of NCT of Delhi & Ors., 2026 INSC 310
• Satvik Rajiv Samani & Anr. v. Shardaben Prabhudas Samani & Anr., Notice of Motion No. 726 of 2014 in Suit No. 353 of 2014, with Notice of Motion No. 1526 of 2015
• Seco Tools India Private Limited v. State of Maharashtra & Ors., Writ Petition No. 3704 OF 2011
• GH Energy Pvt. Ltd. v. Flovel Hydro Technologies Pvt. Ltd. & Anr., Company Appeal (AT) Nos. 87, 89, 90 and 91 of 2024

NOTABLE JUDGMENTS APRIL 2026

1. Company cannot give loan to Director without Special Resolution in General Meeting: Supreme Court

Case Name: Satinder Singh Bhasin v. Government of NCT of Delhi & Ors. (click here)

Citation: 2026 INSC 310

Court: Supreme Court

Decided On: 02.04.2026 

FACTS

The issue arose when the Supreme Court examined the source of the Rs. 50 crore deposit made by the petitioner as a bail condition. It was stated that the amount had been taken from Bhasin Infotech and Infrastructure Private Limited (BIIPL), the company whose director is the petitioner. The Court was therefore required to consider whether company funds could be used for the personal benefit of a director without compliance with Section 185 of the Companies Act, 2013.

ISSUES

1. Whether a company can directly or indirectly give a loan to its director without passing a special resolution in a general meeting.
2. Whether use of company funds for securing the director’s personal bail can be treated as connected with the company’s principal business activities under Section 185 of the Companies Act, 2013.

JUDGMENT

The Hon’ble Supreme Court held that the arrangement by which the petitioner deposited Rs. 50 crores could not be sustained in law, since the deposit had been sourced from BIIPL and other related entities even though the bail condition had been imposed on the petitioner in his individual capacity. The Court found that this was not a case of bona fide personal compliance with the bail order, but a case where company funds were used for the personal benefit of the director without lawful corporate approval. It specifically noted that no board resolution had been passed by BIIPL before disbursal of the amount. Referring to Section 185 of the Companies Act, 2013, the Court observed that a company cannot directly or indirectly advance a loan to its director unless the statutory requirements are met, including approval by special resolution in the general meeting where applicable and use of the funds for the borrowing entity’s principal business activities. The Court further held that a loan taken for securing the petitioner’s personal bail had no nexus whatsoever with the principal 

business activities of the company. It also noted that the petitioner had invested no personal funds and had obtained an interest-free commercial benefit without even basic safeguards such as security or pledge. Accordingly, the Court decided this issue against the petitioner.

1. Civil Courts Cannot Decide Shareholder Disputes Requiring Rectification of Register: Bombay High Court

Case Name: Satvik Rajiv Samani & Anr. v. Shardaben Prabhudas Samani & Anr. (click here)

Citation: Notice of Motion No. 726 of 2014 in Suit No. 353 of 2014, with Notice of Motion No. 1526 of 2015

Court: Bombay High Court

Decided On: 06.04.2026

FACTS

The dispute concerned Panache Securities Private Ltd. The plaintiffs were Satvik Rajiv Samani (Plaintiff No. 1, son of the deceased Rajiv Prabhudas Samani) and Plaintiff No. 2 (ex-wife of the deceased, claiming 50% shareholding in Panache). Following the death of Rajiv Prabhudas Samani, the plaintiffs alleged manipulation of the records and affairs of Panache, challenging the changes in its shareholding and directorship including the role of Shardaben Prabhudas Samani (Defendant No. 1, mother of the deceased) and the alleged appointment of Defendant No. 3 as director and questioning the authority under which the Harileela Property, an asset of Panache (Defendant No. 7), came to be sold to the purchaser company (Defendant No. 4), whose directors were Defendant Nos. 5 and 6, the latter being Prateek Gupta. Fullerton India Pvt. Ltd. (Defendant No. 8) was the mortgagee of the Harileela Property, and Defendant No. 9 was the daughter of the deceased and step-sister of Plaintiff No. 1. The plaintiffs relied on the Memorandum and Articles of Association of Panache to assert their continuing shareholding rights and, on that basis, challenged the dealings with the company's property.

ISSUES

1. Whether the civil court has the power to grant reliefs that require rectification of the register of members and adjudication on directorship.
2. Whether the MoA and AoA by themselves were sufficient to establish actual and continuing shareholding in the company.
3. Whether a shareholder or heir of a shareholder could claim a direct right in the assets of the company or seek lifting of the corporate veil.

JUDGMENT

The Hon’ble Bombay High Court held that the reliefs sought were, in substance, matters of rectification of the register and adjudication concerning company management. Such reliefs fall within the exclusive domain of the NCLT under the Companies Act, 2013. The civil court’s jurisdiction was therefore barred by Section 430 of the Companies Act, 2013.

The Court further held that mere reliance on the MoA and AoA was not enough to prove actual and continuing shareholding. The Court observed that the MoA records subscription, but does not by itself establish payment, vesting, or continued holding of shares. It further held that, under company law, a share certificate is prima facie evidence of title to shares, and the register of members is prima facie evidence of membership. In the absence of such material, the plaintiffs failed to establish a sufficient prima facie case of shareholding.

The Court also reaffirmed the settled principle that a company is a distinct juristic person and that its assets belong to the company, not to its shareholders. On that basis, it held that the plaintiffs could not, merely by asserting shareholder status or heirship, claim a direct right in the Harileela Property, which admittedly stood in the company’s name.

2. Stamp Duty on Amalgamation Cannot Be Based on Goodwill, Share Premium Account Entries: Bombay High Court

Case Name: Seco Tools India Private Limited v. State of Maharashtra & Ors. (click here)

Citation: Writ Petition No. 3704 OF 2011

Court: Bombay High Court

Decided On: 01.04.2026

FACTS
The petitioner had a wholly owned subsidiary, Drillco Seco Limited, which stood amalgamated with the petitioner pursuant to a scheme of amalgamation and reduction of capital sanctioned by the Bombay High Court on 11 February 2005. Under the scheme, the petitioner's shares in the transferor company were cancelled; no fresh shares were issued and no monetary consideration was paid.

The petitioner filed the court order with the Registrar of Companies, but the RoC declined to register the amalgamation, including the reduction of capital, on the ground that proof of no stamp duty liability had not been furnished. The petitioner accordingly applied for adjudication of stamp duty, whereupon the stamp authorities held that duty was payable on the amalgamation order, computed it by treating goodwill and share premium as consideration, and also levied a penalty. The appellate authority upheld this position, following which the petitioner approached the High Court.

ISSUES

1958. Whether an order sanctioning a scheme of amalgamation under Section 394 of the Companies Act, 1956 is a conveyance within the meaning of Section 2(g) of the Maharashtra Stamp Act, 1958.
1959. Whether, in the facts of the case, stamp duty could be computed by treating figures such as goodwill, share premium and profit and loss account as consideration or as value referable to Article 25(da) of the Maharashtra Stamp Act, 1958.

JUDGMENT

The Bombay High Court held that an amalgamation order under Section 394 of the Companies Act, 1956 falls within the definition of "conveyance" under Section 2(g) of the Maharashtra Stamp Act and is therefore capable of attracting stamp duty. However, this only settled the question of chargeability and the actual computation of duty had to be made strictly in accordance with Article 25(da).

On the facts, the transferor company was a wholly owned subsidiary, all its shares were already held by the petitioner and stood merely cancelled on amalgamation, no fresh shares were issued, and no monetary consideration was paid. In these circumstances, the stamp authorities could not pick figures such as goodwill, share premium, and profit and loss balance from the books and treat them as consideration, as these were only accounting adjustments and did not reflect any actual issuance of shares or payment of consideration.

Accordingly, while the amalgamation order was held to be a conveyance, the method adopted for computing duty was held to be contrary to the statute, and the writ petition was allowed.

3. Non-Compete Clause in Shareholder Agreement Binding on Auction Purchaser: NCLAT New Delhi

Case Name: GH Energy Pvt. Ltd. v. Flovel Hydro Technologies Pvt. Ltd. & Anr (click here)
Citation: Company Appeal (AT) Nos. 87, 89, 90 and 91 of 2024

Court: National Company Law Appellate Tribunal, Principal Bench, New Delhi
Decided On: 08.04.2026

FACTS
Mecamidi HPP India Pvt. Ltd. was a joint venture company in which Mecamidi S.A. (France) held 47% shares pursuant to a Joint Venture and Share Purchase Agreement dated 15 September 2010. Upon Mecamidi S.A. entering insolvency and subsequently liquidation in France, its 47% shareholding was put to auction, and Flovel Hydro Technologies Pvt. Ltd. emerged as the highest bidder. The Paris Commercial Court by order dated 13.09.2021 approved the sale subject to conditions, which were confirmed by the French Appellate Court on 06.10.2022, with the additional requirement that the transfer comply with the charter documents of Mecamidi HPP India and applicable Indian law.

When Flovel sought registration of the shares in its favour, the company resisted on the grounds that original share certificates and Form SH-4 had not been submitted, and that Flovel was required to assume the obligations attached to the transferred shares. Flovel filed proceedings under Sections 241-242 and 59 of the Companies Act, 2013. By order dated 01.02.2024, the NCLT directed registration of the 47% shares in Flovel's name and declared the EOGM dated 04.06.2021 invalid. Both findings were challenged before the NCLAT in the connected appeals.

ISSUE

Whether a purchaser of shares through liquidation proceedings is bound by the transfer restrictions and obligations under the company's Articles of Association when seeking registration of such shares.

JUDGMENT

The NCLAT held that the transfer of Mecamidi S.A.’s 47% shareholding to Flovel could not be treated independently of the company’s Articles. It held that a transferee acquiring shares from a shareholder in liquidation must comply with the conditions attached to those shares under the company’s charter documents, and liquidation cannot be used to bypass such restrictions. The Tribunal read Article 22 as imposing a condition precedent, meaning that a third-party transferee must agree to be bound by the rights and obligations pertaining to the transferred shares before registration can be completed.

The NCLAT therefore held that Flovel could be admitted as a shareholder, but only subject to compliance with the obligations attached to the transferred shareholding. It set aside the NCLT’s view that Flovel was not bound to sign the non-compete clause and directed that Flovel will remain bound accordingly.