S. P. JAIN vs KALINGA TUBES LTD.

The Supreme Court examined the applicability of Sections 397 and 398 of the Companies Act, 1956, in the context of a dispute among shareholders regarding the allotment of shares and control of the company. The Court held that the resolutions passed by the Board of Directors, which did not incorporate the terms of the private agreement made in 1954, were valid and binding. The appellant's suit challenging the legality of the resolution was dismissed, affirming the decision of the lower court and upholding the actions taken by the majority shareholders.