National Organic Chemical Industries ... vs Miheer H. Mafatlal & Anr

The Supreme Court addressed the validity of share allotment under Section 391 of the Companies Act, ruling that the approval of an amalgamation scheme does not invalidate prior share allotments made in contravention of an injunction if the appellant was not a party to the original proceedings. The Court held that the findings regarding the breach of injunction were not sustainable as the appellant's shares did not affect the requisite majority for the scheme's approval. Consequently, the appeal was allowed, and the High Court's findings on the share allotment were set aside.