P Balaraman & 5 Others v. The India Envelopes Ltd.: Corporate powers cannot be exercised to secure collateral benefits for directors; improper property sales constitute oppression and mismanagement

13. P Balaraman & 5 Others V/sThe India Envelopes Ltd & 2 Others National Company Law Tribunal, Chennai Bench

Case Reference: CP/45/CHE/2021

Order dated 1st September, 2026

“Corporate powers cannot be exercised to secure collateral benefits for the directors themselves or for entities in which they have a personal interest…The fiduciary obligation of candour is not confined merely to statutory disclosures but extends to every material circumstance capable of influencing the informed decision of the shareholders.”

FACTS

• The petition was filed under Sections 241 and 242 of the Companies Act, 2013 (CA 2013) by six minority shareholders of The India Envelopes Ltd. (IEL), holding about 1% of the share capital but constituting more than one-tenth of total members, thus meeting the threshold under Section 244.
• IEL’s business of manufacturing paper envelopes had become commercially unviable, leaving its immovable property at Chidambaram as its sole valuable asset.
• Shareholders had passed special resolutions in 2016 and 2018 authorizing the Board (including Respondents 2 & 3, the Managing Director and Director) to sell the property fo
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