NANALAL ZAVER AND ANOTHER vs BOMBAY LIFE ASSURANCE CO. LTD.AND OTHERS

The Supreme Court held that the resolution to issue shares to existing shareholders in proportion to their holdings complied with Section 105-C of the Indian Companies Act, 1913, and was not ultra vires. The Court clarified that the motive of preventing an outsider from gaining control did not render the resolution illegal, as the company was in need of funds and the issuance was in its interest. The Bombay High Court's judgment was affirmed, allowing the resolution and share offer to stand.