NCLAT Chennai Upholds Denial of Interim Relief in Alleged Oppression and Mismanagement Due to Appellant’s Breach of Service Contract - The NCLAT’s decision reaffirms that interim orders are not a matter of right but a discretionary remedy, heavily dependent on the applicant’s conduct and the equities of the case. Applicants who fail to uphold contractual or fiduciary obligations, or who approach the court without clean hands, risk denial of equitable relief. The denial of interim relief in this case stands on sound legal principles and is not open to challenge. The appeal was consequently found to be misconceived and was dismissed.
NCLT Dismisses Oppression and Mismanagement Petition: Former Managing Director Barred by Constructive Res Judicata After Prior Settlement - Based on a holistic consideration of the facts, legal principles, and previous settlement, the NCLT concluded that the petition was devoid of merit. The prior mediation and settlement barred the petitioner from re-litigating the same issues due to the doctrine of constructive res judicata. The mere existence of an inspection report was found insufficient to establish a case of oppression or mismanagement. The petition was accordingly dismissed.
NCLAT Chennai Declines Share Division Petition by Partnership Firm; Dismisses Mismanagement Allegations Due to Non-Recognized Membership - The NCLAT Chennai concluded that petitions for division of shares or alleging mismanagement and oppression cannot be entertained where the applicant is a partnership firm, as such a firm lacks recognized membership status under the Companies Act, 2013. Furthermore, in the absence of credible evidence, allegations of mismanagement and oppression will not be sustained. The Tribunal also established a precedent for equitable sharing of mediation costs in corporate disputes.
NCLAT Refuses to Condon Delay Beyond Statutory Limit in Appeal Against Winding Up Order Under Companies Act - In view of the statutory framework and the facts of the case, the NCLAT concluded that the delay of 54 days beyond the already extended period of limitation could not be condoned in law. No sufficient cause was demonstrated to justify condonation, and the Tribunal is expressly prohibited from condoning any delay beyond the prescribed period. Accordingly, the appeal was dismissed as barred by limitation, with no relief granted to the appellant.
NCLAT Restores Appointed Date under Amalgamation Scheme: NCLT’s Unilateral Modification Set Aside for Breach of Natural Justice - The NCLAT’s decision conclusively establishes that the ‘Appointed Date’ in a scheme of amalgamation, as agreed by the parties and set out in the scheme, cannot be altered by the NCLT without explicit reasons, due process, and an opportunity to be heard. Stakeholders must ensure that appointed dates are robustly drafted and justified within their schemes. Any subsequent modification by judicial or quasi-judicial bodies must be supported by cogent reasons, with all affected parties being heard, in line with the principles of natural justice.
Delhi High Court Upholds NCLT’s Domain Over IRP Actions: Review Petition Dismissed for No Error Apparent on Record - Based on the established legal position and the facts presented, the Delhi High Court dismissed the review petition, holding that no error apparent on the face of the record was demonstrated. The Court reaffirmed that challenges to the IRP’s conduct or findings must be pursued before the NCLT, which retains exclusive jurisdiction over such matters within the framework of the IBC. Consequently, the application for review under Section 114 and Order XLVII Rule 1 CPC stood rejected.
NCLAT Upholds Company Strike-Off: Non-Appearance and Undisputed Tax Demand Prove Decisive Under Companies Act, 2013 - In light of the Appellant’s failure to appear and lack of any contestation regarding the tax demand, the NCLAT found no basis to disturb the order striking off the company’s name. The decision underscores the importance of both procedural diligence and substantive defense in restoration proceedings under Section 252 of the Companies Act, 2013.
NCLAT Rules Tribunal Orders Not Equivalent to Civil Court Decrees, Clarifies Mechanism for Recovery in Oppression and Mismanagement Cases - On the basis of the above decision, it is clear that applications seeking the drawing of formal decrees from orders of the NCLT or NCLAT—particularly those based on reports of Administrators—are not maintainable. The Adjudicating Authority was correct in dismissing such applications. Orders passed by the Tribunal under Sections 241 and 242 of the Companies Act are enforceable "as if" they were decrees of a civil court, but they do not become decrees as defined under the CPC, nor can they be formally drawn as such. Parties seeking enforcement must proceed under the statutory mechanism outlined in Section 424(3) of the Companies Act, rather than seeking relief in the form of a civil court decree.
Delhi High Court: Bank’s ‘Fraud’ Tag on Borrower Struck Down—No Additional Proof Beyond Wilful Default, Typographical Errors Corrected - In light of the reviewed judgment, the Delhi High Court has unequivocally quashed the banking respondent’s classification of the petitioner as ‘fraud’, holding that such action cannot be sustained on the same grounds previously found inadequate for wilful default, absent fresh, independent evidence. Practical action going forward requires that any attempt by banks to escalate from ‘wilful default’ to ‘fraud’ must be substantiated by new, independently verifiable material, meeting the higher standard of proof required for fraud declarations.
Delhi High Court Upholds SEBI’s Right to Relieve Administrator; Directs Consideration of Remuneration for Services Rendered in En Aromatic & Petro Chemicals Matter - The Delhi High Court reaffirmed that the appointment of an Administrator under the SEBI Act and relevant Regulations is inherently of limited tenure and subject to termination by SEBI at its discretion, provided such termination adheres to the conditions of appointment and regulatory prescriptions. The Court provided a clear, actionable direction to SEBI to address and determine the petitioner’s claim for outstanding remuneration in accordance with the governing documents.
NCLAT Allows Withdrawal of Amalgamation Appeal in Light of Per Incuriam Order: Permission Granted to Approach Tribunal for Recall - The NCLAT’s decision clarifies that when an impugned order has subsequently been held per incuriam in another matter, affected parties may be allowed to withdraw their pending appeals and seek recall of such orders before the original Tribunal. Parties should be vigilant in monitoring related proceedings and utilize the opportunity to rectify orders that may have been incorrectly passed due to oversight of legal principles.
NCLAT Affirms Lawful Cessation of Additional Director; Legitimate Expectation Doctrine Rejected in Oppression and Mismanagement Case - In summary, the NCLAT has reaffirmed that an Additional Director’s tenure ends by operation of law as per Section 161(1) of the Companies Act, 2013, and such cessation cannot be assailed as oppression or mismanagement unless accompanied by additional, substantive acts of wrongdoing. The doctrine of legitimate expectation does not create a legally enforceable right to appointment or continuance as a director. Moreover, procedural lapses such as failure to hold an AGM, while potentially actionable in other forums, do not by themselves constitute oppression or mismanagement for the purposes of Sections 241 and 242. Appellants should therefore focus on concrete evidence of mala fide or prejudicial conduct if seeking relief under these provisions.
NCLAT Overturns NCLT’s Dismissal: Demerger Scheme Sanctioned for Family-Owned Firms Based on Expert Valuation and Unanimous Shareholder Consent - The NCLAT has categorically found fault with the NCLT’s dismissal of the demerger application, especially when the statutory requirements under Sections 230-232 were evidently complied with. This decision reinforces that when a scheme is backed by expert valuation, full shareholder approval, and proper disclosures, the Tribunal should not ordinarily interfere unless there is an evident legal or procedural lacuna. Appellants should promptly seek consequential directions from the NCLT as per the appellate order to proceed with the scheme.
NCLAT Sets Aside NCLT’s Quorum Directions: Shareholder Meetings to Follow Section 103 of Companies Act, Including Virtual Participation - The NCLAT’s decision unequivocally establishes that the quorum for shareholders’ meetings must be determined strictly in accordance with Section 103 of the Companies Act, 2013. The Tribunal set aside the NCLT's directive that purported to fix the quorum independently of statutory provisions. It was further clarified that shareholders participating through video conferencing or other permitted electronic means must be included in the quorum count, and that all procedural aspects of the meeting must comply with MCA Circular No. 14/2020. The appeal was accordingly disposed of, restoring the primacy of the Companies Act in governing company meetings.
Supreme Court Rules State MPID Act Prevails Over SARFAESI, RDB, and IBC in Attachment of Properties Linked to Defrauded Depositors - The Supreme Court’s ruling establishes that, within Maharashtra, the MPID Act’s provisions for attaching properties of entities that default on the return of deposits to investors take precedence over the priority rights of secured creditors under the SARFAESI Act, the debt recovery regime under the RDB Act, and the moratorium under the IBC. Secured creditors cannot claim priority or seek to enforce their security against assets attached for the benefit of defrauded depositors under the MPID framework. Practically, authorities and claimants must recognize the superior claim of depositors protected by the MPID Act when dealing with attached properties in Maharashtra, and any action contrary to this hierarchy would be invalid.
NCLAT Clarifies: Amendment of Pleadings in S.241-242 Company Petitions Requires Formal Leave of Tribunal—No Suo Moto Additions Permitted - The NCLAT’s decision makes clear that in company law proceedings under Sections 241 and 242 of the Companies Act, 2013, pleadings are sacrosanct once filed and form part of the judicial record. Any amendment—whether to prayers or other substantive parts—requires a formal application to the Tribunal and must be accompanied by a judicial order granting leave. This ensures that due process is followed and that the opposing party is afforded a fair opportunity to respond.
Section 103 of the Companies Act, 2013 - NCLAT Rules That Only Statutory Quorum Under Section 103 Governs Shareholder Meetings; NCLT Lacks Authority to Alter Quorum Requirements - In light of the above, the NCLAT’s decision affirms that the statutory quorum requirements under Section 103 of the Companies Act, 2013, are mandatory and cannot be modified or overridden by the NCLT. Companies and their stakeholders must ensure that all meetings are convened in line with these statutory requirements, as any deviation may render the proceedings invalid and subject to challenge.
Delhi High Court Upholds Club’s Right to Suspend Dependent Privileges Beyond Age 21: No Vested Rights Without Full Membership - The Delhi High Court affirmed that the privileges extended to dependents beyond the age of 21 were at variance with the Club’s AoA. The Court held that such privileges were inherently temporary and could not be construed as vested rights in the absence of full membership. The decision of the Single Judge to deny interim relief was found to be well-reasoned, non-arbitrary, and firmly grounded in legal precedent regarding interlocutory injunctions.
NCLAT Chennai Denies Condonation of Inordinate Delay: Appeal Filed 2659 Days Late under Section 421(3) of Companies Act Dismissed - In this decision, the NCLAT, Chennai, has unequivocally clarified that the limitation period under Section 421(3) of the Companies Act, 1956, is inviolable beyond the statutorily prescribed maximum of 90 days. The responsibility lies with appellants to act diligently and pursue remedies within this period, including making timely applications for certified copies of relevant orders. Failure to do so—even in cases where the appellant alleges lack of knowledge due to ex parte proceedings—will not be condoned if the limitation period is grossly exceeded. The actionable takeaway is that parties must vigilantly monitor the progress of proceedings and take prompt steps to secure necessary documents for appeal within the limitation period to avoid forfeiting their right to appellate remedy.
SEBI Slaps Rs. 1 Lakh Penalty on Research Analyst for Delayed Annual Audit under RA Regulations: Upholds Accountability and Regulatory Compliance - SEBI’s decision makes it clear that timely conduct of annual audits is not merely a procedural formality, but a substantive requirement designed to uphold the integrity of the securities market. Research analysts must treat annual audit obligations as a critical compliance function. Any lapse, especially where compliance is only triggered by regulatory inquiry, will invite penal consequences. Firms should proactively schedule and complete annual audits and ensure timely submission to SEBI to mitigate enforcement risks.
SAT Upholds SEBI’s Decision: Recovery Proceeds from IL&FS Default to be Equally Distributed Among All Investors Post Scheme Reopening by Motilal AMC - Based on the facts and applicable law, the Securities Appellate Tribunal held that there was no legal or regulatory basis to set aside SEBI’s order. The Tribunal dismissed the appeal, upholding that the proceeds from recoveries on defaulted IL&FS commercial papers should be proportionately distributed among all investors holding units at the time of realization, including those who joined after the scheme’s reopening. The action of Motilal AMC in reopening the scheme and accepting new investments was found to be in compliance with the law and industry practice.
Supreme Court Sets Aside Remand in Disputed Share Transfer Amidst Winding Up; Orders High Court to Decide Appeal Maintainability First - The Supreme Court’s decision underscores the primacy of adjudicating threshold issues such as maintainability before examining the substantive aspects of any litigation. In the context of company winding-up and asset transfers—especially where regulatory embargoes and provisional liquidation are involved—judicial scrutiny must begin with procedural compliance. The High Court has thus been mandated to first decide whether the respondents’ appeals are maintainable before considering the factual disputes on share ownership and payment.
SEBI Slaps ₹5 Lakh Penalty on Entity for Engaging in Reversal Trades Creating Artificial Volumes in BSE Stock Options - In light of the evidence and the Noticee’s non-cooperation during the adjudicatory process, SEBI concluded that the Noticee had violated Regulations 3(a)-(d), 4(1), and 4(2)(a) of the 2003 Regulations, read with Section 12A of the SEBI Act, 1992. Consequently, a penalty of ₹5 lakh was imposed under Section 15HA, reinforcing the regulator’s commitment to maintaining market integrity and deterring manipulative activities. Entities facing similar allegations should ensure active and timely participation in regulatory proceedings to present their defense, failing which adverse inferences are likely to be drawn.
SEBI Cracks Down on Broker’s Spoofing Tactics; Directors Found Vicariously Liable for Market Manipulation Under PFUTP Regulations - In light of the compelling evidence and the gravity of the violations, SEBI concluded that PWAPL and its directors had engaged in practices constituting market abuse, in clear contravention of Section 12A of the SEBI Act and Regulations 3 and 4 of the PFUTP Regulations. The interim order was warranted to prevent further market distortion and to protect the interests of the investing public by insulating the market from manipulative actors.
SAT Overturns SEBI’s Insider Trading Order: Long-Term Holding and One Phone Call Not Enough for Violation in Aptech Case - Based on the available evidence and the legal framework, SAT decisively held that the mere existence of a single phone call and the subsequent long-term holding of shares do not satisfy the legal threshold for establishing insider trading under Regulation 4 of the PIT Regulations, 2015. The finding emphasizes the importance of substantial and corroborative evidence in proving violations relating to UPSI. As a result, SAT set aside SEBI’s order, allowing the appeal and exonerating the appellants from all charges of insider trading in Aptech shares.
High Court's Decision to Release Funds Reversed by Supreme Court: Investigation Preserved - The Supreme Court’s decision serves as a vital reminder of the balance between judicial interventions and ongoing criminal investigations. It reinforces that courts should exercise caution when engaging with cases where investigations are incomplete, particularly in matters involving financial transactions linked to fraudulent activities. Therefore, it is prudent for parties involved in similar circumstances to refrain from seeking premature judicial relief that can disrupt investigative procedures.
Gujarat High Court Rules Against Malicious Prosecution Over Non-Compliance With Companies Act - This judgment reinforces the criticality of adherence to established accounting standards when addressing related party transactions. It underscores the principle that prosecutorial actions must be anchored in substantive legal requirements. The ruling further signals a judicial commitment to upholding individual rights against unmeritorious allegations, thereby advocating for a more rigorous examination of conditions before initiating criminal proceedings. Practitioners should take heed to ensure that compliance with the Companies Act and associated standards is thorough to safeguard against potential legal repercussions.
Tribunal Upholds Validity of Corporate Actions Amidst Allegations of Oppression and Mismanagement - This decision confirms the power of the Tribunal to address and investigate claims of corporate malfeasance while maintaining the primacy of shareholder agreements and management rights. Companies must ensure proper documentation and transparency in financial dealings to mitigate risks of mismanagement claims. Companies should conduct regular audits and maintain open lines of communication with their shareholders to fend off potential disputes.
Supreme Court Mandates Clarity on Builder-Homebuyer Disputes under Real Estate Act - The Supreme Court's ruling delineates the responsibilities of both builders and home buyers while reaffirming the significance of procedural compliance before reaching the stage of contempt. Home buyers facing similar disputes should prioritize engaging with RERA to address any contested demands, thus potentially avoiding lengthy and complex contempt proceedings. This decision reinforces the need for home buyers to take proactive steps in settling disputes directly with builders through established legal channels rather than resorting to contempt actions prematurely.
Bombay High Court Clarifies Stamp Duty Computation on Demerger of Consumer Mobile Business - The Bombay High Court in its ruling reinforces the critical necessity of adhering strictly to the statutory guidelines laid out in Article 25 (da) of the Maharashtra Stamp Act regarding the computation of stamp duty in Schemes of Arrangement involving demergers. The correction of assessing stamp duty based on the market value of shares issued instead of 'enterprise value' or 'net worth' ensures compliance with legal requirements, underscoring the importance of accurate valuation methods for tax obligations. Tax practitioners and corporate entities must now ensure clarity in share valuation methods deployed to prevent similar miscalculations.