NCLAT’s Approach to EOGM for Removal of Directors in Jagran Prakashan Limited Dispute

The decision in Jagran Prakashan Limited Vs Mahendra Mohan Gupta & Ors. (NCLAT Delhi) offers an important illustration of how appellate courts balance corporate democracy, governance concerns, and pending disputes over shareholder voting rights. The National Company Law Appellate Tribunal (NCLAT) was called upon to decide whether an Extraordinary General Meeting (EOGM) requisitioned to remove seven independent directors and one whole-time director should be halted, when the very basis of voting rights within the holding company was sub judice before the National Company Law Tribunal (NCLT).

NCLAT ultimately permitted the EOGM to go ahead but ordered that no resolution passed at that meeting be implemented until the core company petition before NCLT was finally decided.

Background of the Corporate Structure and Dispute

Shareholding and Control Landscape

The appellant, Jagran Prakashan Limited (JPL), is a widely held listed public company engaged in publication of newspapers, magazines, and journals. It is listed on the National Stock Exchange and Bombay Stock Exchange, and has more than 70,000 public shareholders collectively holding about 31% of its paid-up equity share capital.

The majority stake of 67.97% in JPL is held by its holding company Jagran Media Network Investment Pvt. Ltd. (JMNIPL). JMNIPL functions as the investment vehicle of six branches of the Gupta family, effectively making it the promoter holding entity.

At the relevant point in time, JPL’s Board comprised:

  • 9 independent directors
  • 8 promoter directors
  • 1 whole-time director (an employee-director)

Role of Respondent No.1 and Article 4.1

Respondent No.1, Mahendra Mohan Gupta, had served as Chairman and Managing Director of JPL from 01.01.2005 to 30.09.2023. Over time, serious disputes emerged among various promoter factions, centering on:

  • control over nomination rights,
  • competing proposals for appointment of the Managing Director, and
  • control over voting rights in the holding company JMNIPL and, through it, JPL.

At the heart of the controversy is Article 4.1 of the Articles of Association of JMNIPL, which is reproduced in the judgment and was kept intact in the NCLAT order. Under this Article:

  • each promoter of JMNIPL irrevocably appoints Respondent No.1 as agent and attorney-in-fact;
  • Respondent No.1 is empowered to exercise “all rights of the Promoters” under the Articles;
  • the promoters are to act as a “single unit”, and all such rights are to be exercised only by Respondent No.1.

Accordingly, the case of Respondent No.1’s side was that all voting rights of JMNIPL, including in JPL, had to be exercised exclusively through him by virtue of Article 4.1.

Resolutions in JMNIPL and Parallel Proceedings Before NCLT

Resolution Dated 14.07.2023 and its Challenge

A key turning point was a Board Resolution dated 14.07.2023 passed in JMNIPL. By this resolution:

  • the authority of Respondent No.1 to represent JMNIPL at JPL’s meetings was revoked;
  • instead, Mr. Dhirender Mohan Gupta and Mr. Sanjay Gupta were designated as authorised representatives of JMNIPL for such meetings.

Respondent No.1 and another promoter challenged the validity of this resolution in CA No.30/2023 before NCLT, Allahabad, where the matter remains pending.

Attempt to Amend Articles and Interim Protection

Another proceeding, CA No.58/2023, targeted proposed amendments to JMNIPL’s Articles, especially any modification or dilution of Article 4.1.

By an interim order dated 08.12.2023, the NCLT directed that the proposed amendment must not be implemented until further orders. Thus, while Article 4.1 remained in force, its interplay with later Board resolutions continued to be litigated.

On the other side, certain respondents moved CA No.6/2024, seeking directions to give effect to the Board Resolution dated 14.07.2023. Eventually, this relief was not pressed at final hearing, and the underlying questions were never finally adjudicated by NCLT.

NCLT’s Governance Framework and Appointment of Independent Directors

NCLT’s Interim Governance Arrangement

Given the serious management disputes, an application CA 47/2023 was filed seeking urgent directions on JPL’s governance. By orders dated 27.09.2023 and 04.10.2023, NCLT:

  • put in place a governance framework
  • vested a central role in independent directors to act as neutral facilitators between warring promoter factions and to oversee governance and performance review.

Appointment and Reappointment of Independent Directors

Pursuant to this environment:

  • Seven independent directors were appointed/reappointed by the Board on 10.08.2024, with participation from all Gupta family factions.
  • Their appointments/reappointments were confirmed by shareholders at general meetings held on 24.09.2024 and 19.09.2025.

Subsequently, a Board meeting on 07.12.2025 to review governance processes led to further disagreements. On 25.12.2025, some directors questioned the validity of the appointment of the independent directors, claiming that Respondent No.1 had cast votes without proper authority at the AGMs of 24.09.2024 and 19.09.2025 on behalf of JMNIPL.