A company called Krisani Bio Sciences hired a scientist (Krishnam Raju Kalidindi) as its CEO and gave him:
Shares in the company.
SALARY AND MANAGEMENT POSITION.
Company funds, laboratories, and research facilities.
The company expected that any inventions developed using its resources would belong to the company.
However, the CEO allegedly:
Developed 120 patents using the company's resources.
Transferred only 5 patents to the company (as specifically mentioned in the agreement).
Registered the remaining 117 patents in another company owned or controlled by him.
Those patents later became extremely valuable.
The company argued that this was oppression and mismanagement under Sections 241 and 242 of the Companies
Act.
WHAT WAS THE MAIN LEGAL QUESTION?
The Tribunal had to decide:
Is this a case of corporate oppression (which NCLT can decide), or is it simply a contract/IP ownership dispute
(which should go to a civil court)?
What did NCLT decide?
The NCLT dismissed the petition for two major reasons.
1. This is not an oppression case
The Tribunal said:
The real dispute is who owns the patents.
That is a matter of interpreting a contract and deciding IP ownership.
Such disputes belong before a civil court or other appropriate forum, not under Sections 241 and 242.
Simply calling a contract dispute "oppression" does not make it an oppression case.
2. The case was filed too late**
The patents had been publicly published between 2011 and 2014.
Patent publications are public records.
The law assumes that everyone can know about publicly available records.
The petitioner filed the NCLT case only in 2024, nearly 10 years later.
Therefore, the Tribunal held that the claim was barred by limitation (time-barred).
Why wasn't it considered "oppression"?
For oppression under Sections 241 and 242, there must be conduct that:
is unfair or harsh, lacks honesty or fairness, harms shareholders in their capacity as shareholders, and
affects the management or affairs of the company.
Here, the Tribunal said:
Even if the CEO breached his employment agreement or fiduciary duties, that does not automatically become
oppression. It remains a dispute over contractual rights and patent ownership.
What happened to the company's claim?
The NCLT did not say the company was wrong.
Instead, it said:
"You have approached the wrong forum."
The company is still free to: file a civil suit, file intellectual property proceedings, initiate criminal proceedings if
appropriate.
It simply cannot use Sections 241 and 242 to resolve this dispute.
Why is this judgment important?
The case teaches three important lessons:
Choose the correct legal forum.
Contract disputes → Civil Court/Arbitration.
Oppression and Mismanagement → NCLT.
Draft agreements carefully.
If a company wants ownership of all future inventions, the agreement must clearly state that.
Do not delay legal action.
Public patent filings give "constructive notice."
Waiting many years can make the claim time-barred.
One-line summary
The NCLT held that the dispute was essentially about ownership of patents under a contract—not corporate
oppression—and therefore dismissed the petition, also noting that it was filed nearly 10 years after the patents
were publicly disclosed.