Dr. Bais Surgical and Medical Institute Pvt. Ltd. v. Dhananjay Pande 2026 INSC 447 - Ss.397-399 Companies Act 1956 - Member
Companies Act, 1956 - Sections 397, 398 and 399 - The expression “member” cannot be construed in isolation or confined to the technical formulation contained in Section 41(2). It must be construed with reference to the wider definitional framework provided in Section 2(27) and allied provisions governing the rights of members. . The equitable foundation of Sections 397 and 398 must be a guiding factor to not construe the expression “member” in an unduly restrictive or technical manner confined solely to formal entry in the register, thereby frustrating the remedial purpose underlying the legislative scheme. (Para 22-23)
Case Info
Basic Case Details
Case name: Dr. Bais Surgical and Medical Institute Pvt. Ltd. & Ors. v. Dhananjay PandeNeutral citation: 2026 INSC 447Coram:
- Hon’ble Mr. Justice Pamidighantam Sri Narasimha
- Hon’ble Mr. Justice Alok Aradhe
Judgment date: 04 May 2026 (New Delhi)
Case Law Cited (with Citations)
- Balkrishan Gupta and Ors. v. Swadeshi Polytex Ltd. and Anr. – (1985) 2 SCC 167
- Nanalal Zaver and Anr. v. Bombay Life Assurance Co. Ltd. and Ors. – 1950 SCR 391
- Severn Trent Water Purification Inc. v. Chloro Controls (India) Private Ltd. and Anr. – (2008) 4 SCC 380
- Shri Balaji Textile Mills Pvt. Ltd. and Anr. v. Ashok Kavle and Ors. – 1988 SCC OnLine Kar 80
- M/s World Wide Agencies Pvt. Ltd. and Anr. v. Margarat T. Desor and Ors. – (1990) 1 SCC 536
- Umesh Kumar Baveja and Ors. v. IL and FS Transportation Network Ltd. and Ors. – 2013 SCC OnLine Del 6436
- Needle Industries (India) Ltd. & Ors. v. Needle Industries Newey (India) Holdings Ltd. and Ors. – (1981) 3 SCC 333
- Shri Gulabrai Kalidas Naik and Ors. v. Shri Laxmidas Lallubhai Patel of Baroda and Ors. – 1977 SCC OnLine Guj 47
- S.V.T. Spinning Mills P. Ltd. and Ors. v. M. Palanisami and Ors. – 2009 SCC OnLine Mad 3260
Statutes / Provisions Referred
- Companies Act, 1956
- Section 2(27) – Definition of “member”
- Section 41 – Definition / acquisition of “member”
- Sections 397 and 398 – Oppression and mismanagement
- Section 399 – Locus/eligibility to apply under Sections 397–398
- Section 114 – Share warrants
Three‑Sentence Brief Summary
The Supreme Court considered whether the respondent, whose name was not entered in the register of members, could nonetheless be treated as a “member” entitled to maintain petitions for oppression and mismanagement under Sections 397 and 398 of the Companies Act, 1956. Interpreting “member” in light of Section 2(27), Section 399 and the equitable nature of the oppression/mismanagement jurisdiction, the Court held that where substantial investment is accepted, utilised, and the investor is consistently treated as a stakeholder (including as Managing Director and “co‑owner”), formal non‑entry in the register cannot defeat his substantive rights. Holding that the High Court and Company Law Board were right in treating the respondent as a member, the Court dismissed the appeals and directed that the amount deposited with accrued interest be released to the respondent.