NCLT Ahmedabad: Director’s Removal Does Not Bar Oppression Petition, But No Relief Without Proof of Oppression

April 7, 2026 : The Ahmedabad Bench of the National Company Law Tribunal (NCLT) has held that removal from the post of director does not extinguish a person’s right as a shareholder to maintain a petition for oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013. However, the Tribunal dismissed the petition filed by Hardeep Singh Gill against Glulam Technologies Pvt. Ltd. and others, finding no evidence of oppressive or prejudicial conduct.

The petition arose from allegations that the petitioner, a shareholder holding 2,700 out of 10,000 equity shares, was wrongfully removed as director through a special notice dated 01.04.2019 and an Extraordinary General Meeting held on 11.05.2019. He further claimed exclusion from management and denial of access to company records, asserting that these actions constituted oppression and mismanagement.

The Tribunal first addressed the preliminary objection regarding maintainability. Rejecting the respondents’ contention, it clarified that the right to invoke Sections 241 and 242 is rooted in shareholding and not in directorship. Since the petitioner continued to hold substantial shares and met the threshold under Section 244, the petition was held to be maintainable. The Bench emphasized that cessation as director does not dilute a member’s statutory right to seek relief.

On merits, the Tribunal examined the process leading to the petitioner’s removal. It noted that a special notice was issued, board meetings were duly convened, and the Extraordinary General Meeting was held in accordance with statutory requirements. The petitioner had been given an opportunity to respond but failed to demonstrate procedural illegality or violation of natural justice.

The Bench observed that the dispute essentially reflected a breakdown of mutual trust between the parties. It reiterated that removal of a director by shareholders, when carried out in compliance with the Companies Act, cannot be interfered with unless it is shown to be oppressive or unlawful. In the present case, no such circumstances were established.

The Tribunal also took note of parallel civil proceedings initiated by the company against the petitioner concerning alleged misconduct and financial losses, observing that several issues were already sub judice before competent courts.

Concluding that no case of oppression or mismanagement had been made out, the Tribunal held that no equitable relief could be granted and dismissed the petition.

The order was passed by a Division Bench comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma on 07.04.2026.

Case Title: Hardeep Singh Gill v. Glulam Technologies Pvt. Ltd. & Ors.
Case No.: C.P. No. 51 of 2019