In order to fill the gaps in the Shareholders` Pact Act and its enforceability, several pioneering judgments have been issued by higher and higher courts. The decision in V.B.Rangaraj v. V.B Gopalakrishnan is still considered relevant, as it is the difference between the private limited company and the public company with respect to the shareholders` pact. The case of Premier Hockey Development Private Limited v. Indian Hockey Federation is invoked and considered in cases where the company is a party to the agreement. However, in light of recent judgments by the Delhi High Court and the Bombay High Court, it can be concluded that the inclusion of shareholder agreements in the company`s by-law is not a binding clause for their enforceability vis-à-vis the company. The precondition for their applicability is that shareholder agreements are not allowed to reduce the legal powers of the company and that they do not bind future shareholders, so they can be applied against the company, even if they are not included in the company`s statutes. We all know that, at the end of the day, all decisions about a company`s business, whether operational or executive, are made by shareholders. Shareholders have the right to vote at a company`s general meeting.
Assuming that there is a situation where two groups of shareholders do not agree with a decision, the majority shareholders` decision represses the decision of the minority shareholders. In order to demand a remedy under the Companies Act, the terms of the shareholders` pact are often taken in 2013 in accordance with the statutes of a company where the articles are amended after the conclusion of the agreement by the shareholders. The voting procedure for decisions is also defined in the shareholders` pact, as well as important elements requiring prior written approval of shareholders and/or directors and a resolution adopted by the board of directors. “Any dispute or difference that arises between the parties regarding the construction, scope, operation or effect of this agreement, or its validity or violation, is settled by arbitration proceedings, in accordance with the rules of international commercial arbitration of the Board of Arbitration of India, and the arbitration award in this contract binds the parties.” The general legal condition is that all agreements be linked and in accordance with the law.