In a petition under S. 241, the true question to be asked by the Tribunal is whether removal of a Director/Executive Chairman tantamount to conduct which is oppressive or prejudicial to some members. Further, even in cases where the Tribunal finds that the removal of a Director was not in accordance with law or was not justified on facts, the Tribunal cannot grant relief under S. 242 unless the removal is found to be oppressive or prejudicial. There may be cases where the removal of a Director might have been carried out perfectly in accordance with law and yet may be part of a larger design to oppress or prejudice the interests of some members and in such cases the Tribunal can grant a relief under S. 242. In the present case, on the facts held, CPM’s removal from Directorship happened subsequent to the filing of the original complaint and that too for valid and justifiable reasons and hence NCLAT could not have labored so much on the removal of CPM, for granting relief Ss.241 and 242, when no case of oppressive or prejudicial conduct was established.
[Tata Consultancy Services Ltd. v. Cyrus Investments (P) Ltd., (2021) 9 SCC 449]