SCO.LR | 2026 | Volume 5 | Issue 2

Volume 5 Issue 2 of the Supreme Court Observer Law Reports (SCO.LR) is here! In this Issue, we have shortlisted five important judgements from the Supreme Court. 

These judgements cover: 

• “Members” under Companies Act 
• High Court’s power to register FIRs under Article 226
• Ex-post facto environmental clearances
• Insolvency proceedings for individual debt claims
• Amendments to the Benami Act, 1998

All judgements are now available on our SCO.LR page with interactive citing tools and mindmaps.

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The Supreme Court Observer Law Reports

SCO.LR | Volume 5 | Issue 2

4 May – 8 May 2026

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Meaning of “Member” under Companies Act

Dr. Bais Surgical and Medical Institute v Dhananjay Pande

4 May 2026

Citation: 2026 INSC 447 | 2026 SCO.LR 5(2)[6]

Bench: Justices P.S. Narasimha and Alok Aradhe

The Supreme Court held that a person qualifies as a ‘member’ for oppression and mismanagement proceedings under Sections 397 and 398 of the Companies Act, 1956, even without a formal entry in the register of members.”

The respondent, Dhananjay Pande, filed proceedings under Section 397 and 398 of the Companies Act after fewer shares were allotted to him against the money paid by him. The appellant, Bais Surgical and Medical Institute, argued that the proceedings were not maintainable as Pande Pande was not a “member” since his name had not been entered in the register of members under Section 41 of the Act. The Company Law Board rejected the objection and treated Pande as a member. The Bombay High Court affirmed the finding, leading to the Institute approaching the Supreme Court.

The Supreme Court upheld the High Court’s interpretation and held that a conjoint reading of Sections 397, 398 and 399 indicates that the expression “member” cannot be confined to the technical formulation contained in Section 41(2). The Court directed that Pande was entitled to be treated as a member. It relied on the cumulative factual circumstances, including correspondence describing Pande as a “co-owner”, conciliation proceedings acknowledging his entitlement to shares and the utilization of his investment in the institute’s business.

Key words/phrases: Sections 397 and 398 of Companies Act, 1956—Meaning of “member”—Section 399 maintainability objection—Section 41(2) not determinative—Section 2(27) broader definition—Company Law Board treated respondent as member—Bombay High Court affirmed finding—Oppression and mismanagement proceedings—“Co-owner” correspondence—Civil appeals dismissed

Read the Judgement here. 

Mindmap 

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Registration of FIR under Article 226

Sujal Vishwas Attavar v State of Maharashtra

4 May 2024

Citations: 2026 INSC 442 | 2026 SCO.LR 5(2)[7]

Bench: Justices Sanjay Karol and A.G. Masih

The Supreme Court held that writ jurisdiction of a High Court under Article 226 cannot be invoked to direct the registration of First Information Report (FIR) unless statutory remedies have been exhausted. 

The appellant, a lease holder in the complainant-company, was accused of using forged documents, fabricated details and signatures to mislead revenue officials into completing measurement of the leased property, after an insolvency process was initiated. Subsequently, the complainant sought the registration of FIR with the Deputy Superintendent of Land Records Office, Tribakeshwar, which was declined. The Bombay High Court directed registration of the FIR after the complainant invoked its writ jurisdiction under Article 226. The appellants approached the Supreme Court in a criminal appeal. 

The Supreme Court set aside the High Court order, noting that the complainants failed to show that statutory remedies were unavailable or were inefficacious. The Court held that barring special circumstances, the High Court cannot act as a forum of first instance, bypassing the statutory scheme in its entirety. 

Key words/phrases: Allegations of fraud—Foregery—Land Records Office—Requesting First Information Report—Declined—High Court under Article 226—Directed registration of FIR—Criminal Appeal—Order set aside—Article 226 remedy not available—Statutory remedies to be explored. 

Read the Judgement here.

Mindmap. 

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Retrospective Environmental Clearances

Neetu Solvents v Vineet Nagar & Ors.

6 May 2026

Citation: 2026 INSC 455 | 2026 SCO.LR 5(2)[8]

Bench: Justices J.K. Maheshwari and Atul S. Chandurkar

The Supreme Court held that ex-post facto environmental clearance must be granted in strict conformity with applicable rules if a unit complies with pollution norms and the adverse consequences of denying clearance outweigh those of regularising the operation.

The National Green Tribunal had directed the closure of Formaldehyde units in Rajasthan and Haryana after holding that they were operating without prior environmental clearance. The units appealed to the Supreme Court arguing that the respective Pollution Control Board (PCB) had granted Consent to Establish and Consent to Operate. The Boards had belatedly applied for environmental clearance, which the units did within sixty days. The Order directing their closure was set aside in a separate judgement: Pahwa Plastics Private Limited v Dastak NGO (2022). The appeals from Rajasthan and Haryana remained pending.

The Supreme Court held that closure cannot be directed merely for procedural lapse where the regulator itself was mistaken about the requirement. The Court set aside the NGT’s closure orders and allowed the units to operate. It directed the Ministry of Environment, Forest and Climate Change to decide the pending clearance applications of the units within a month.

Key words/phrases: Formaldehyde units operating on consent to establish and consent to operate—Pollution Control Boards of Punjab and Haryana initially unaware of clearance requirement under EIA 2006—Boards directed units to apply for clearance, applications duly filed—NGT ordered closure—Supreme Court Appeal—Closure set aside

Read the Judgement here.

Mindmap. 

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Recovery of Debt under Insolvency and Bankruptcy Code 

Dhanlaxmi Bank Limited v Mohammed Javed Sultan

7 May 2026

Citations: 2026 INSC 460 | 2026 SCO.LR 5(2)[9]

Bench: Justices P.S. Narasimha and Alok Aradhe

The Supreme Court held that proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be used as a coercive recovery mechanism for individual contractual claims. 

Emerald Mineral Exim Pvt. Ltd. (Corporate Debtor) entered into an agreement with Bengal Shrachi Housing Development (Builder) over sale of a unit. The Debtor secured a loan facility of Rs. 1.5 crores with Dhanlaxmi Bank, with the amount directly disbursed to the Builder. Following a default in repayment, the Bank initiated proceedings before the Debt Recovery Tribunal (DRT), which directed the Builder to deposit Rs. 1.5 crores as security. The Bank then initiated insolvency proceedings under Section 7 of the IBC against the debtor, leading the NCLT to admit the petition and commence Corporate Insolvency Resolution Process (CIRP). The NCLAT set aside the NCLT’s decision and held that because the Bank did not directly disburse the amount to the Debtor, it cannot be termed as “Financial Creditor” under Section 7. The Bank appealed to the Supreme Court. 

The Supreme Court upheld the NCLAT order and dismissed the appeal. It held that the transaction was predominantly dependent on the contractual performance of the Builder. As the DRT was actively adjudicating the matter, the IBC proceedings were deemed impermissible as a recovery tactic. The Court held that the IBC’s purpose is to address financial distress and not resolve individual recovery claims. 

Key words/phrases: Recovery of loan amount—Quadripartite agreement—Loan amount directly disputed to builder—Recovery of loan at Debt Recovery Tribunal—Corporate Insolvency Resolution Process under Section 7 of Insolvency and Bankruptcy Code, 2016—CIRP not a forum to resolve individual claims—NCLAT judgement upheld 

Read the Judgement here. 

Mindmap

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Operation of Amendments to the Benami Act, 1988

Manjula v D.A. Srinivas 

8 May 2026

Citation: 2026 INSC 465 | 2026 SCO.LR 5(2)[10]

Bench: Justices J.B. Pardiwala and R. Mahadevan

The Supreme Court enforced retroactive operation of the 2016 amendments to the Prohibition of Benami Property Transactions Act, 1988. It held that confiscatory proceedings under the Act are not merely punitive, but serve a larger public purpose of preserving the sanctity of lawful ownership.

The respondent instituted a suit seeking declaration for ownership of properties based on a 2018 Will. The deceased was employed in the company of the respondent’s father. The land was purchased in Raghunath’s name to circumvent statutory restrictions on land acquisitions. The appellants (the wife and children of the deceased) filed an application under Order VII Rule 11(d) of the Civil Procedure Code, 1908 seeking rejection of the claim on the grounds that it was barred under the Benami Act and the Hindu Succession Act, 1956, as the plaintiff was being investigated by the CBI for murder of the deceased. The respondent claimed that he had a “fiduciary relationship” with the deceased and was exempted under the Benami Act. The trial Court rejected the suit but it was restored by the High Court of Karnataka in 2024 for adjudication on merits. The appellants approached the Supreme Court.

The Supreme Court restored the trial Court’s rejection of the suit, emphasising that no person can profit from a wrong doing. It relied on the 2016 amendments to deny exemption, stating that there is no fiduciary relationship between a company and its employee. The Court further held that the appellants were not entitled to the land and that it was liable for confiscation.

Key words/phrases: Plaint for declaration of title—Defendants seek rejection on grounds of bar under Prohibition of Benami Property Transactions Act, 1988—Trial Court rejects plaint—High Court of Karnataka restores the suit—Supreme Court restores trial Court rejection—Retroactive operation of 2016 Amendments—Confiscatory provisions remedial not punitive—No fiduciary relationship between company and employee—Bar may be express or implied.

Read the Judgement here.

Mindmap.