She was the Chairman of the Company from the date when her husband died, having

been associated with the Company even during the life time of the founder which
runs into several years. Yet, she was removed as Director without giving any cogent
and convincing reasons. Respondents No. 2 to 5 have not stated anything adverse to
Respondent No. 6. The Company is not sustaining any loss. It is not the case of
Respondents No. 2 to 5 that Respondent No. 6 acted against the interests of the
Company. There is no any allegation of mismanagement against Respondent No. 6.
Then, why Respondents No. 2 to 5 have taken this extreme step of removing
Respondent No. 6 as Director is not forthcoming. When it is a closely held company
among the family members, then it is deemed every member of the family has a right
to participate in the management of the Company. It is just like running of the
company as a partnership firm. There is absolutely no justification for such a drastic
step of removing the Respondent No. 6 as Director of the Company,
20. The learned counsel appearing for the petitioners has relied on the decision of
the Apex Court reported in MANU/SC/0050/1981 : AIR 1981 SC 1298. He has also
relied on the decision of the Hon'ble Supreme Court reported in MANU/SC/7193/2008
: 2008 (3) SCC 363. So, what is clear from the decisions cited is, an oppression is
made out where the conduct is harsh, burdensome or wrong. Where the action is
against probity and good conduct. Where the conduct is mala fide and is for a
collateral purpose where although, the ultimate objective may be in the interest of
the company, the immediate purpose would result in an advantage for some
shareholders vis-a-vis. others. Where the oppressive act complained of may be fully
permissible under law, but may yet be oppressive. The test is even if action is legally
permissible, yet, if it is otherwise against the probity, good conduct or is
burdensome, harsh or wrong, it amounts to oppression. The contention of the
learned counsel for Respondents No. 1 to 5 that the meeting was convened in
accordance with law and majority of shareholders have taken a decision for removal
of petitioners and Respondent No. 6 as Directors and there is no irregularity and
illegality in passing the resolution by the EGM and therefore, it cannot be treated as
oppressive. Relying on the principle stated above, the action is against probity, good
conduct, and is harsh and wrong because the petitioners are Directors and members.
The 1st petitioner is holding 42.04% of shares. She was the Director since 2002. The
2nd petitioner is also the Director from 2006. Respondent No. 6 is the mother of
Respondents No. 2 and 3 and she was a subscriber to the Memorandum of
Association and she was also the chairman of the Company for several years.
Therefore, the action in removing them is nothing but harsh, wrong and against
probity and therefore, oppressive in nature. As such, the resolution dated 25.04.2017
needs to be stayed and the petitioners and Respondent No. 6 to be restored to the
position in the Company prior to the date of resolution.
21. Counsel for Respondents No. 2 to 5 has relied on several rulings cited supra
dealing with the powers of the Board.
22. Considering the decisions cited by both sides, and acting on the proposition of
law as laid down by the Apex Court that though EGM was convened according to law,
yet the decision taken by majority of the shareholders, i.e., Respondents No. 2 to 5 is
against probity, good conduct, harsh and wrong and therefore, in our opinion, it is an
act of oppression and the decision deserves to be stayed by allowing the position of
the petitioners and Respondent No. 6 to status quo ante. Hence, we are inclined to
grant interim reliefs (a) and (b) of the interim reliefs by staying the operation of
resolution of EGM dated 25.04.2017 and order restoring the position of petitioners
and Respondent No. 6 as Directors of the Company and staying the appointment of

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 Respondents No. 4 and 5 as Directors till the disposal of the main petition.
23. Accordingly, the position of petitioners and Respondent No. 6 is restored to the
position of Directors prior to the resolution passed in the EGM dated 25.04.2017 and
the appointment of Respondents No. 4 and 5 as Directors of the 1st respondent
company is stayed till the disposal of the main petition.
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