Unity Small Finance Bank vs Resilient Innovations Pvt Ltd And Ors
- Court
- Delhi High Court
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on : 1 September 2026
Judgment pronounced on : 05 November 2026
# CNR No. DLHC010385462026
+ FAO(OS) (COMM) 221/2026, CM APPL. 55533/2026 & CM
APPL. 55534/2026
UNITY SMALL FINANCE BANK .....Appellant
Through: Mr Mukul Rohtagi, Sr. Adv.
with Mr. Sanjay Gupta, Mr Ateev Mathur
and Ms. Jagriti Ahuja, Advs.
versus
RESILIENT INNOVATIONS
PVT LTD AND ORS .....Respondents
Through: Mr. Gopal Subramanium and
Mr. Amit Sibal, Sr. Advocates with Mr.
Mohit Goel, Mr. Anuj Berry, Mr. Sidhant
Goel, Ms. Aishna Jain, Mr. Ishaan Pratap
Singh, Mr. Pawan Bhushan, Mr. Shashwat
Mukherjee, Mr. Suradish Vatts, Mr.
Siddhant Juyal, Ms. Ramyani Sood, Mr.
Darpan Sachdeva, Advs. for R-1
Mr. Sandeep Sethi, Sr. Adv. with Mr Ajay
Monga and Mr. Amol Sharma, Advs.for R-2
Mr. Raj Shekhar Rao Sr Adv. with Mr.
Ashish Agarwal and Mr. Nalin Dhingra
Adv. for R-3
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
HON'BLE MR. JUSTICE VINOD KUMAR
JUDGMENT
% 05.11.2026
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 1 of 59
C. HARI SHANKAR, J.
S. No. Subject Para Nos
1. A. A Prefatory Note 1 - 6
2. B. The lis 7 - 11
3. C. Our view 12 - 25
4. C.I Breach of Clause 6.11(d) read with 8 of
the SHA
13 - 20
5. C.II Breach of Clause 5.2 of the SHA 21 - 25
6. D. Cited Clauses of the SHA and the
Memorandum of Association of Unity
26 - 27
7. E. Facts 28 - 39
8. F. The impugned judgment 40 - 72
9. F.I Submissions of Resilient 42 - 52
10. F.II Submissions of Unity 53 - 60
11. F.III Submissions of Centrum 61 - 64
12. F.IV Submissions of Resilient in Rejoinder 65 - 69
13. F.V Analysis by the learned Single Judge 70 - 72
14. G. Rival Submissions before us 73 - 85
15. G.I Submissions of Mr. Mukul Rohatgi for
Unity
73 - 79
16. G.II Submissions of Mr. Gopal
Subramanium, for Resilient
80 - 85
17. H. Scope of interference 86 - 87
18. I. Applying the above principle 88 - 110
19. I.1 Re. contention that impugned judgment
was rendered in haste
89 - 90
20. I.2 Re. Contention that learned Single Judge
could not have injuncted the holding of a
Board Meeting
91
21. I.3 Re. Deletion of “Reserved Matters” from
the AOA of Unity, pursuant to the
directive of the RBI - Clause 8 of SHA
prevails over the AOA in view of non
obstante clause
92 - 94
22. I.4 Whether subject matter of Agenda Item
8 constituted “Reserved Matter” within
the meaning of the SHA
95 - 99
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 2 of 59
23. I.5 Re. submission that SHA could not
override the AOA
100 - 101
24. I.6 Re. Jai Kumar Arya 102
25. I.7 Re. contention that Clause 5.1 of SHA
applied, and not Clause 5.2
103 - 105
26. I.8 Re. contention that the injunction granted
by the impugned judgment violates the
directives of the RBI
106 - 107
27. I.9 The Sequitur 108 - 110
28. J. Conclusion 111 - 112
A. A Prefatory Note
1
1. The appellant Unity Small Finance Bank challenges judgment
dated 24 July 2026, whereby a learned Single Judge has issued notice
in OMP (I) (Comm) 293/2026, filed by Resilient Innovations Pvt
2
Ltd , Respondent 1 herein, under Section 9 of the Arbitration and
3
Conciliation Act, 1996 , returnable on 28 October 2026, and has, in
the meanwhile, restrained Unity from tabling, considering,
deliberating or approving the Resolution proposed in Agenda Item 18,
proposed to be tabled in the next Board meeting of Unity which was,
scheduled for 25 July 2026.
2. The impugned order is, therefore, purely ad interim in nature.
3. We, therefore, suggested to learned Counsel for Unity that, as
the learned Single Judge is yet to render a final view in OMP (I)
(Comm) 293/2026, we could, instead of providing our views in the
matter, advance the hearing before the learned Single Judge with a
1
“Unity” hereinafter
2
“Resilient” hereinafter
3
“the 1996 Act" hereinafter
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 3 of 59
request to finally decide the OMP on a date to be fixed by us,
uninfluenced by the impugned judgment.
4. Our suggestion did not, however, find favour with Unity or
4
with Respondent 2 Centrum Financial Services Ltd , though Resilient
was agreeable to it.
5. We, therefore, heard arguments on the merits of the impugned
decision of the learned Single Judge, and proceed to provide our view
thereon.
6. The principal dramatis personae are, therefore, Unity, Resilient
and Centrum.
B. The lis
7. Though facially complex, the controversy is, in essence, simple.
8. The dispute turns round Clauses 5.2, 6.11(d) and 8 of a Share
5
Holders Agreement dated 26 October 2021, to which Unity, Resilient
and Centrum are privy, which reads thus:
“5.2 In case of requirement of additional capital for the
operation of the Company beyond the Initial Investment, further
Securities may be issued by the Company subject to provisions of
the Business Plans and Clause 8 (Reserved Matters). Any issue of
Securities to Persons other than the Promoter or RIPL and/or their
respective Affiliates shall require the consent of Centrum and
RIPL . ”
4
“Centrum” hereinafter
5
“SHA” hereinafter
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
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*
“6.11 Quorum
(d) It being understood and agreed by the Company and
Shareholders that no Reserved Matters shall in any event be
taken up for discussion or approved by the Directors at the
Initial Board Meeting and/ or Adjourned Board Meeting or
otherwise, without a written consent from the Centrum and
RIPL in accordance with Clause 8 (Reserved Matters).”
*
“8. Notwithstanding anything contained in this Agreement or
the Memorandum and Articles, the Company shall not take any
decisions or action in respect of the Reserved Matters (whether
through the Board, Committee, Shareholders, employees or
officers of the Company), unless such action or decision has been
approved (by way of an affirmative vote or prior written consent)
by at least 1 (one) representative from each of Centrum and
RIPL. In order to facilitate the process of the Board, prior to
taking up for decision or action any Reserved Matter or any action
connected with it, the Company shall send a written
communication, together with all available supporting documents
and proposed resolution, to Centrum and RIPL requesting their
consent to the same. Once Centrum and RIPL have consented to
the Reserved Matter , the same shall be taken up at the meeting of
the Board, Committee or Shareholders, as may be applicable, in
the Ordinary Course of Business of the Company.”
(Emphasis supplied)
9. Resilient has approached this Court, by way of OMP (I)
(Comm) 293/2026, seeking an interdiction against Unity tabling, for
consideration in its next Board meeting, Agenda Item 18, which read,
to the extent relevant, thus:
“ TO CONSIDER AND APPROVE INCREASE IN
AUTHORISED SHARE CAPITAL OF THE BANK AND
CONSEQUENT AMENDMENT IN CLAUSE V OF
MEMORANDUM OF ASSOCIATION AND SEEK PRIOR
APPROVAL FROM RBI IN THIS CONNECTION.
*
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 5 of 59
The present Authorised Capital of the Bank is Rs.
4000,00,00,000/- (Rupees Four Thousand Crore Only) divided into
170,00,00,000 (One Hundred and Seventy Crore) Equity share of
Rs. 10/- each and 230,00,00,000 (Two Hundred and Thirty Crore)
Preference share of Rs. 10/- each. Further, the present paid -up
capital of the Bank is Rs. 2953,39,90,360/- (Rupees Two
Thousand Nine Hundred Fifty Three Crore Thirty Nine Lakh
Ninety Thousand Three Hundred and Sixty Only) divided into
70,49,01,960 (Seventy Crore Forty Nine Lakh One Thousand Nine
Hundred and Sixty Only) Equity Shares of Rs. 10/- each and
224,84,97,076 (Two Hundred and Twenty Four Crore Eighty Four
Lakh Ninety Seven Thousand and Seventy Six) Preference Shares
of Rs. 10/- each.
Considering the above, the Bank is required to increase its
6
Authorised Share Capital to enable further issuance of CCPS as
well as Equity share.
Thus, it is proposed to increase the Authorised Capital of the Bank
from Rs. 4000,00,00,000/- (Rupees Four Thousand Crore Only)
divided into 170,00,00,000 (One Hundred and Seventy Crore)
Equity Share of Rs. 10/- each and 230,00,00,000 (Two Hundred
and Thirty Crore) Preference Share of Rs. 10/- each to Rs.
4900,00,00,000/- (Rupees Four Thousand Nine Hundred Crore
Only) divided into 170,00,00,000 (One Hundred and Seventy
Crore) Equity share of Rs. 10/- each and 320,00,00,000 (Three
Hundred and Twenty Crore) Preference Shares of Rs. 10/- each.
The Board may discuss and recommend any other amount as shall
be deemed fit by the Board.
The proposed increase in Authorized Share Capital would require
consequential amendment to the existing Capital Clause V of the
Memorandum of Association of the Bank. Thus, the Board is
requested to approve the following amendment:
V. The Authorised Share Capital of the Bank is Rs.
4900,00,00,000/- (Rupees Four Thousand Nine Hundr ed
Crore Only) divided into 170,00,00,000 (One Hundred and
Seventy Crore) Equity share of Rs. 10/- each and
320,00,00,000 (Three Hundred and Twenty Crore)
Preference Shares of Rs. 10/- each, with rights, privileges
and conditions, as are provided under the Articles of
Association of the Company and in accordance with
applicable law, with power to increase or reduce or
reclassify or alter the share
6
Compulsorily Convertible Preference Shares
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 6 of 59
capital of the Company and to divide/consolidate the
shares in the capital for the time being into several classes
and face values and to at tac h thereto respectively such
preferential, cumulative, convertible, guarantee, qualified
or other special rights, privileges, conditions or
restrictions, as may be determined by or in accordance
with the Articles of Association of the Company for the
time being and to vary, modify or abrogate any such right,
privilege or condition or restriction in such manner as may
for the time being be permitted by the Articles of
Association of the Company or the legislative provisions
for the time being in force.
The Board may note that as per the Shareholders Agreement dated
October 26, 2021, executed between Unity Small Finance Bank
Limited (’the Bank’), Centrum Financial Services Limited
(‘CFSL’)
and Resilient Innovations Private Limited (‘RIPL’), any
amendment to MOA / AOA or change in its capital structure of the
Bank is a Reserved Matter. Thus, approval of both RIPL and
CFSL is being sought by the Bank. However, the Board may note
that issuance of Warrants was duly approved by all stakeholders of
the Bank and amendment to the Authorised Capital is just a
consequent procedural requirement.
*
The Board is requested to discuss the above and pass the following
resolutions with or without modification:
“RESOLVED THAT pursuant to the provisions of
Sections 179, 13 , 61 and other applicable provisions, if
any, of the Companies Act, 2013 read together with the
rules made thereunder (including any statutory
amendment(s) or modification(s) or re-enactment(s)
thereof for the time being in force) , Section 49C and all
other applicable provisions of the Banking Regulation Act,
1949 (including any statutory amendment(s) or
modification(s) or re-enactment(s) thereof for the time
being in force), the rules, circulars and guidelines issued by
the Reserve Bank of India (hereinafter referred to as
“ RBI ”) from time to time, and subject to receipt of no
objection by the RBI and/ or such other approval(s),
consent(s), permission(s) and sanction(s) as may be
necessary from any statutory and regulatory authority(ies),
and subject to approval of the members of the Bank,
approval of the Board be and is hereby accorded to
increase the Authorized Share Capital of the Bank from Rs.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 7 of 59
4000,00,00,000/- (Rupees Four Thousand Crore Only)
divided into 170,00,00,000 (One Hundred and Seventy
Crore) Equity shares of Rs. 10/- each and 230,00,00,000
(Two Hundred and Thirty Crore) Preference shares of Rs.
10/- each to Rs. 4900,00,00,000/ - (Rupees Four Thousand
Nine Hundred Crore Only) divided into 170,00,00,000
(One Hundred and Seventy Crore) Equity share of Rs. 10/-
each and 320,00,00,000 (Three Hundred and Twenty
Crore) Preference Shares of Rs. 10/- each by the creation of
additional 90,00,00,000 (Ninety Crore) Preference Shares
of Rs. 10/- each and to alter the Clause V of the
Memorandum of Association of the Bank relating to
Capital by substituting with the following Clause V:
V. The Authorised Share Capital of the Bank is
Rs. 4900,00,00,000/- (Rupees Four Thousand Nine
Hundred Crore Only) divided into 170,00,00,000
(One Hundred and Seventy Crore) Equity share of
Rs. 10/- each and 320,00,00,000 (Three Hundred
and Twenty Crore) Preference Shares of Rs. 10/-
each, with rights, privileges and conditions, as are
provided under the Articles of Association of the
Company and in accordance with applicable law,
with power to increase or reduce or reclassify or
alter the share capital of the Company and to
divide/consolidate the shares in the capital for the
time being into several classes and face values and
to attach thereto respectively such preferential ,
cumulative, convertible, guarantee, qualified or
other special rights, privileges, conditions or
restrictions, as may be determined by or in
accordance with the Articles of Association of the
Company for the time being and to vary, modify or
abrogate any such right, privilege or condition or
restriction in such manner as may for the time
being be permitted by the Articles of Association of
the Company or the legislative provisions for the
time being in force. ”
(Underscoring supplied)
10. In view of the fact that Clause 6.11(d) of the SHA specifically
proscribes the very taking up for discussion, by the Board, of any
Reserved Matter, and in view of the fact that the subject matter of
Agenda Item 18 is a Reserved Matter, the learned Single Judge has,
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 8 of 59
ad interim , restrained Agenda Item 18 from being tabled before the
Board in its next meeting.
11. Unity claims to be aggrieved. Ergo this appeal, under Section
37(1)(b) of the 1996 Act.
C. Our View
12. There is obviously no ground, whatsoever, for us to interfere
with the impugned judgment of the learned Single Judge.
C.I Breach of Clause 6.11(d) read with 8 of the SHA
13. Clause 6.11(d) of the SHA clearly proscribes the very taking up
for discussion of any Reserved Matter by the Board of Unity, without
the written consent from Centrum and Resilient in terms of Clause 8.
It is admitted, in Agenda Item 18, that the subject matter of the
Agenda Item was a Reserved Matter. Again, admittedly, no consent
was granted by Resilient to the tabling of Agenda Item 18 before the
Board, despite three communications having been addressed by Unity
to Resilient, seeking written consent, on 23 October 2025, 1 May
2026 and 8 July 2026. These communications also manifested the
requirement of written consent of Resilient, before Agenda Item 18
was tabled. Resilient refused to grant such consent.
14. In these circumstances, the learned Single Judge had, to our
mind, in fact no option before him, but to interdict the tabling of
Agenda Item 18 before the Board of Unity.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 9 of 59
15. The learned Single Judge has also expressed his chagrin at the
fact that, despite the subject matter of Agenda Item 18 being
admittedly a Reserved Matter, as was recognised even in the wordings
of Agenda Item 18 itself, as well as in the three letters dated 23
October 2025, 1 May 2026 and 8 July 2026, Unity was seeking to
contend to the contrary before the Court.
16. We echo the chagrin.
17. Neither before the learned Single Judge, nor before us, has
Unity been able to adduce any sustainable submission to wish away
the express admission, in Agenda Item 18, that the subject matter of
the Agenda Item was a Reserved Matter, which necessitated prior
written consent of Resilient before it was placed before the Board.
18. In so far as the letters dated 23 October 2025, 1 May 2026 and
8 July 2026 are concerned, Unity has merely sought to underplay the
further admission, in these letters, of the subject matter of Agenda
Item 18 as being a Reserved Matter, as an “inadvertent error”.
19. It is obvious that such a submission cannot be countenanced,
least of all in an appeal against a discretionary ad interim order of the
learned Single Judge.
20. The fact that the subject matter of Agenda Item 18 was a
“Reserved Matter” thus standing admitted, the Agenda Item could not
be permitted to be tabled for consideration by the Board of Unity
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 10 of 59
without the prior written consent of Resilient. Said consent having
been expressly refused, the learned Single Judge cannot be said to be
in error in interdicting tabling of Agenda Item 18 as an ad interim
measure.
C.II Breach of Clause 5.2 of the SHA
21. It is admitted by Unity, both in the present appeal as well as in
the written submissions filed before us, that carrying out the
Resolution envisaged in Agenda Item 18 would require increase, by
Unity, of its authorised share capital. Para E.2 of the written
submissions filed by Unity expressly acknowledges this fact, thus:
“E.2 For conversion of warrants into CCPS it was necessary for
the Appellant to increase its authorised share capital.”
22. Clause 5.2 of the SHA is categorical on two aspects; firstly, that
induction of additional capital into Unity is “subject to provisions of
the Business Plans and Clause 8 (Reserved Matters) ” and, secondly,
that any issue of securities to third parties would “require the consent
of Centrum and Resilient ”.
23. The proposal to table Agenda Item 18 before the Board of
Unity, for consideration, therefore, additionally infracted Clause 5.2
of the SHA, having been taken without the prior consent of Resilient.
24. The impugned judgment of the learned Single Judge is,
therefore, unexceptionable.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 11 of 59
25. We would, somewhat later this judgment, be adverting to the
law regarding the scope of interference, under Section 37 of the
Arbitration and Conciliation Act, 1996, with interim orders passed
under Section 9 of the 1996 Act. Suffice it, here, to state that, within
those restrictive parameters, no case for interference with the
impugned judgment of the learned Single Judge is made out.
D. Cited Clauses of the SHA and the Memorandum of
7
Association of Unity
26. Though, as noted earlier, the scope of the dispute before us is
limited, in the interests of completeness, we may reproduce,
hereunder, the clauses of the SHA to which our attention was invited
during the course of arguments:
“ 1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement, the following capitalized terms not otherwise
defined in the body of this Agreement, wherever used (including
the recitals) shall have the meanings given hereunder:
*
“ Securities” shall have the meaning ascribed to it under the Act
and in the case of the Company, shall specifically include the
Shares and the Warrants;
*
“Warrants” shall mean warrants issued by the Company, from
time to time in accordance with the provisions of this Agreement
and Applicable Law.
*
7
“MOA” hereinafter
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
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FAO(OS) (COMM) 221/2026 Page 12 of 59
3. THE COMPANY AND THE RELATIONSHIP
BETWEEN THE SHAREHOLDERS
*
3.4 Each Shareholder hereby respectively agrees with and
undertakes to the other to procure that: (a) every person for the
time being representing it; and (b) every person appointed as a
Director of the Company in terms of this Agreement, will exercise
any power to vote or cause the power to vote to be exercised, at
any meeting of the Board or Shareholders, as the case may be, so
as to enable the approval of any and every resolution necessary or
desirable to procure that the affairs of the Company are conducted
in accordance with and otherwise to give full effect to this
Agreement, the Memorandum and Articles and provisions of
Applicable Laws.
3.5 Each Party agrees with the other that:
(a) it shall act in good faith towards the other;
(b) it will do all things necessary or reasonably
desirable to give effect to the spirit and intention of this
Agreement; and
(c) the affairs of the Company shall be managed in
accordance with and subject to: (i) the Memorandum and
Articles of the Company, (ii) this Agreement; (iii) the
provisions of Applicable Laws; and (iv) the Business Plan.
*
5. INITIAL CAPITAL CONTRIBUTION AND
ADDITIONAL FUND RAISING
5.1 The capital requirements of the Company shall be met
through the initial equity infusion by Centrum and RIPL in
accordance with the following (the “Initial Investment”):”
(a) Obligation to subscribe to Equity Shares
On or prior to the Effective Date, Centrum and
RIPL (collectively) shall have infused a minimum
capital of INR 1100,00,00,000 (Indian Rupees
Eleven Hundred Crore) in the Company in the ratio
of 51:49.”
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
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FAO(OS) (COMM) 221/2026 Page 13 of 59
(b) Obligation to bring further capital
Further capital shall be raised by the Company in
the manner as set out below and in relation to the
same, the Company shall issue warrants or such
other securities/instruments in consideration thereof
as may be permitted under applicable Laws:
(i) An aggregate capital of INR 900,00,00,000
(Indian Rupees Nine Hundred Crore), as
and when required to be infused in line
with the Business Plan of the Company, but
in any case within 5 (five) years from the
date of commencement of business by the
Company; and
(ii) An aggregate capital of INR
1,000,00,00,000 (Indian Rupees One
Thousand Crore), as and when required to
be infused in line with the Business Plan of
the Company, but in any case within 8
(eight) years from the date of
commencement of business by the
Company; “
5.2 In case of requirement of additional capital for the
operation of the Company beyond the Initial Investment, further
Securities may be issued by the Company subject to provisions of
the Business Plans and Clause 8 (Reserved Matters). Any issue of
Securities to Persons other than the Promoter or RIPL and/or their
respective Affiliates shall require the consent of Centrum and
RIPL.
*
6.11 Quorum
*
(d) It being understood and agreed by the Company and
Shareholders that no Reserved Matters shall in any event be
taken up for discussion or approved by the Directors at the
Initial Board Meeting and/ or Adjourned Board Meeting or
otherwise, without a written consent from the Centrum and
RIPL in accordance with Clause 8 (Reserved Matters).
*
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 14 of 59
8. Notwithstanding anything contained in this Agreement or
the Memorandum and Articles, the Company shall not take any
decisions or action in respect of the Reserved Matters (whether
through the Board, Committee, Shareholders, employees or
officers of the Company), unless such action or decision has been
approved (by way of an affirmative vote or prior written consent)
by at least 1 (one) representative from each of Centrum and RIPL.
In order to facilitate the process of the Board, prior to taking up
for decision or action any Reserved Matter or any action
connected with it, the Company shall send a written
communication, together with all available supporting documents
and proposed resolution, to Centrum and RIPL requesting their
consent to the same. Once Centrum and RIPL have consented to
the Reserved Matter, the same shall be taken up at the meeting of
the Board, Committee or Shareholders, as may be applicable, in
the Ordinary Course of Business of the Company .”
*
12.1 Restrictions on Transfer
*
(a) Lock-in
Subject to any internal restructuring within the Company
(including but not limited to buy-back or for establishment
of non-operative financial holding company done (if
required) in accordance with Applicable Laws , Centrum
and RIPL shall not for a period of 5 (five years from the
date of commencement of business by the Company,
directly or indirectly, Transfer any Securities held by it in
the Company such that its shareholding will fall below
40% (forty parent) of the total paid up voting equity share
capital of the Company without the prior written approval
of Centrum or RIPL, as the case may be.
(b) General Restrictions on Transfer of Securities
(i) No Shareholder shall Transfer or attempt to
Transfer any Securities, except as expressly permitted
under Clause 12 (Lock-In/Transfer of Securities/Transfer
Restrictions) of this Agreement or otherwise as agreed to in
writing by Centrum and RIPL.
(ii) The Company and Shareholders agree that the
Transfer restrictions in this Agreement and in the Articles,
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 15 of 59
shall not be capable of being avoided by the holding of
Securities of the Company indirectly through a company or
other entity that can itself be sold in order to dispose of an
interest in Securities of the Company. Any transfer,
issuance or other disposal of any Securities of the Company
(or other interest) resulting in any change in the Control, of
Centrum or of RIPL shall be treated as being a Transfer of
the Securities held by the relevant Shareholder, and the
provisions of this Agreement in respect of the Transfer of
Securities shall accordingly apply.
(iii) Any purported Transfer (including upon invocation
of an Encumbrance) which is not in accordance with this
Agreement shall be null and void ab initio. And the
Company shall not register such Transfer and shall reject
any such Transfer made or attempted suo moto without
necessity of decision of the Board or order of any
Governmental Authority. Any Transfer or attempted or
purported Transfer of Securities of the Company by any
Shareholder in contravention of the provisions of this
Agreement shall constitute a Material Concern under this
Agreement.
(iv) The provisions of this Clause 12 (Lock-In/ Transfer
of Securities/Transfer Restrictions) shall not apply to any
Transfer of Securities by a Shareholder required in order to
comply with Applicable Law (including, but not limited to,
any order/ directions passed by a Governmental Authority).
(c) Third Party Transfer
(i) Subject to Clauses 12.1(b)(i) (General Restrictions
on Transfer of Securities) no Shareholder shall Transfer its
Securities in the Company to any Person except without
receipt of the prior written consent of RIPL and Centrum,
as may be applicable, which consent shall be given at
mutually acceptable terms.
*
12.4 All Shareholders and proposed transferee of Securities of
the Company shall, at all times, comply with the fit and proper
requirements issued by the RBI, from time to time and as a
condition to acquisition of the said Securities, execute a deed of
adherence or deed of undertaking, as may be decided by Centrum
and RIPL for such proposed transferee substantially in the form as
set out in Part A or Part B, as applicable, of Schedule 3. The deed
of adherence and deed of undertaking may be subject to such other
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 16 of 59
modifications as may be required by Centrum and RIPL. Provided
that where such proposed transferee is a Controlled Person or on a
cumulative basis acquires more than 4.99% (four point nine nine
porcent) of the total paid up equity voting capital of the Company,
then such proposed transferee shall execute a deed of adherence
substantially in the format as set out in Part A of Schedule 3, with
such modifications as may be agreed to by Centrum and RIPL.
*
17. DISPUTE RESOLUTION
17.1 Any dispute arising out of or in connection with this
Agreement, including any question regarding its existence,
validity, termination or performance or a Material Concern in
accordance with Clause 10.2(c) (each a "Dispute") shall, so far as
is possible, be settled amicably between the Parties.
17.2 If after a period of 30 (thirty) Business Days from a Party
notifying the other of the existence of a Dispute, the Parties have
failed to reach an amicable settlement, each Party will designate
senior management personnel to meet in person to resolve the
Dispute within an additional period of 30 (thirty) Business Days. If
after such additional period, the Dispute has not been resolved,
then such Dispute shall (at the request of either Party serving a
written notice to that effect on the other (the "Dispute Notice")) be
referred to and finally resolved by arbitration administered by the
(Indian) Arbitration and Conciliation Act, 1996 ("Arbitration Act")
for the time being in force, which Arbitration Act is deemed to be
incorporated by reference in this Clause 17 (Dispute Resolution).
17.3 The seat and place of the arbitration shall be New Delhi.
The language of the arbitration shall be English.
*
SCHEDULE 2
RESERVED MATTERS
(a) Any amendments to the Memorandum and/or Articles of
the Company that affects the rights of the Shareholders;
(b) Any merger, demerger, divestment or sale of the Company,
its subsidiaries (if any), its undertakings or its business, other
corporate restructuring including by way of a scheme of
amalgamation, arrangement / compromise / reorganization, slump
sale, consolidation, partnership, joint venture, strategic alliance,
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
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profit sharing arrangement and/or exclusive supply / distribution
arrangements (other than is the Ordinary Course of Business);
(c) Any acquisition or purchase of any undertaking,
businesses, companies, body corporate, by the Company;
(d) Any disposal or sale of assets of the Company in excess of
Rs. 100 Crore (Rupees One Hundred Crore only) annually or
which is not in the Ordinary Course of Business;
(e) Creation of any charge or lien on the assets of the Company
other than those created in the Ordinary Course of Business;
(f) Any change in its capital structure, including through new
issue of Shares or Securities of the Company, buy back, reduction
in share capital rights issue, bonus issue, stock/ share split,
employee stock options, etc. or any amendment of rights,
concessions, terms or restrictions relating to a security of the
Company;
(g) Approval of the Business Plan; any amendments to the
Business Plan and the approval or ratification of any departure or
deviation from the same;
(h) Any reorganization of the Company's capital or otherwise
commencement of any proceedings relating to voluntary winding
up;
(i) Undertaking an initial public offering or listing of any
Securities of the Company, and
(j) Any action that may alter the rights, privileges,
entitlements and preferences of Centrum and/or RIPL, as holders
of Securities.”
27. Clause V of the MOA, which Agenda Item 18 proposes to
amend, read thus:
“V. The Authorised Share Capital of the Bank is Rs.
4900,00,00,000/- (Rupees Four Thousand Nine Hundred Crore
Only) divided into 170,00,00,000 (One Hundred and Seventy
Crore) Equity share of Rs. 10/- each and 320,00,00,000 (Three
Hundred and Twenty Crore) Preference Shares of Rs. 10/- each,
with rights, privileges and conditions, as are provided under the
Articles of Association of the Company and in accordance with
applicable law, with power to increase or reduce or reclassify or
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 18 of 59
alter the share capital of the Company and to divide/consolidate
the shares in Signature the capital for the time being into several
classes and face values and to attach thereto respectively such
preferential, cumulative, convertible, guarantee, qualified or other
special rights, privileges, conditions or restrictions, as may be
determined by or in accordance with the Articles of Association of
the Company for the time being and to vary, modify or abrogate
any such right, privilege or condition or restriction in such manner
as may for the time being be permitted by the Articles of
Association of the Company or the legislative provisions for the
time being in force.”
E. Facts
28. Though we were taken through a wide range of facts, we
intend, while capturing all the aspects which were argued, to
concentrate on those facets which are relevant to the issue at hand.
29. Unity, Resilient and Centrum executed, among themselves, the
SHA on 26 October 2021. Resilient and Centrum held 49% and 51%
shareholding, respectively, in Unity.
30. Purportedly in compliance with a letter dated 18 June 2021,
whereby final approval was granted by the Reserve Bank of India to
Unity to carry out banking activities, warrants were issued by Unity in
2021, for sale to third parties, proposing conversion of equity
shareholding of Unity into Compulsorily Convertible Preference
8
Shares . These warrants were transferred to 181 third party individuals
in 2021. On the basis of these warrants, the holders/transferees thereof
were entitled to become shareholders in Unity. By an Extraordinary
8
“CCPSs” hereinafter
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 19 of 59
9
General Body Meeting held on 22 October 2021, warrants were
issued, to the tune of ₹ 90 crores, for conversion of equity
shareholding of Unity into CCPSs. As per the conditions contained in
the letter dated 18 June 2021 from the RBI to Centrum, the
shareholding of Centrum, which was in excess of 40%, was to be
diluted to below 40% within eight years from the date of
commencement of business by Unity. This period of eight years is
scheduled to expire on 31 October 2026. Within the same period,
para 2(i)(c) of the letter dated 18 June 2021, also required holding of
the shareholding of the Resilient to be reduced to 10% of the paid up
voting equity share capital. Para 2(i)(c) of the letter dated 18 June
2021 read thus:
“2. We, hereby, convey our 'in-principle' approval to Centrum
Financial Services Limited (CFSL) for setting up a small finance
bank (SFB), along with Resilient Innovations Private Limited
(RIPL), which is treated as 'person acting in concert' with CFSL.
The validity of this 'in-principle' approval is 120 days from the
date of granting 'in-principle' approval i.e. 120 days from the date
of this letter. The promoting entity may apply to RBI in case more
time is required for setting-up the bank due to reasons beyond its
control. The 'in-principle' approval is subject to conditions as
detailed in the Annex to this letter. However, due to the proposed
amalgamation of the PMC bank with the small finance bank, if and
when the applicant is issued a SFB license, the following
additional conditions shall also be applicable:
(i) The promoting entity shall be required to ensure
compliance with the SFB Guidelines - 2019 issued by
Reserve Bank of India (RBI) from the date of
commencement of business as a SFB with following
relaxations/exemptions-
*
(c) The promoter's initial shareholding, in
excess of 40 per cent shall be diluted to 40 per cent
9
“EOGM” hereinafter
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
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or below (or as amended by RBI from time to time)
of paid-up voting equity share capital of the
proposed SFB within a period of not more than
eight years from the date of commencement of
business by the proposed SFB. The shareholding of
RIPL, the 'person acting in concert' and non-
promoter, shall be brought down to 10 per cent (or
as amended by RBI from time to time) of paid-up
voting equity share capital within maximum of
eight years from the date of commencement of
business by proposed SFB. (This relaxation may be
read with stipulation relating to lock-in requirement
on promoter's holding during first five years as
mentioned in para 8 of Annex to this letter)”
31. It is not disputed that compliance with para 2(i)(c) of the letter
dated 18 June 2021 from RBI to Centrum would result in dilution of
the shareholding of Resilient in Unity from 40% to 21%.
10
32. JBCG Advisory Services Pvt. Ltd , Respondent 3 herein, is
also a transferee of warrants issued by the Unity in 2021 and has
executed the deed of undertaking as required by Clause 3.2 of
Annexure A to the warrants, setting out their terms and conditions,
which read thus:
3.2 Securities as defined under the Shareholders' Agreement
includes Warrants - Series 1. Accordingly, the Warrant Series 1 are
transferable, subject to the approval of the Board of Directors or
any Committee of the Board, the Shareholders Agreement and
Articles of Association. The Series 1 Warrant Holder shall adhere
to the terms of the Shareholders' Agreement and shall execute a
Deed of Adherence or Deed of Undertaking, as may be required by
the Company, to this effect subject to and in accordance with the
provisions of the Shareholders' Agreement.”
33. It is significant that Clause 3.2 of Annexure-A to the warrants
acknowledges that the warrants constitute “securities”.
10
“JBCG” hereinafter
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
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34. On 23 October 2025, 1 May 2026 and 8 July 2026, Unity
addressed the following emails to, inter alia, Resilient and Centrum:
E-mail dated 23 October 2025
“Fwd: Approval for increase in Authorised Capital in order to meet
the Licencing condition of RBI
---------- Forwarded message ---------
From: Archana Goyal <[email protected]>
Date: Thu, 23 Oct 2025 at 7:34 PM
Subject: Approval for increase in Authorised Capital in order to
meet the
Licencing condition of RBI
To: legal_ [email protected] <legal_
[email protected]>,
[email protected]. in <[email protected]. in>
Cc: Ranjan Ghosh <[email protected]>, Rahul Chopra
<[email protected]>, Aanchal Aggarwal
<aanchal. [email protected]>, Sumeet Singh
<sumeet@bharatpe. com >
INTERNAL
Dear Sir/Madam,
We propose to place the following matter for approval at the Board
meeting of USFB scheduled to be held on Nove1nber 1, 2025:
1. To consider and approve Increase in Authorised Share
Capital of the Bank and consequent amendment in clause V of
Memorandum of Association and seek prior approval from RBI in
this Connection.
Draft Agenda note on the said matter is enclosed herewith for your
reference.
Pursuant to the Shareholders' Agreement dated October 26, 2021
("SHA"), your affirmative consent is requested for placing the
aforesaid Agenda before the Board for discussion/approval.
Please let us know if you have any questions or queries in this
connection.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 22 of 59
Thanks & regards,
E-mail dated 1 May 2025
“ Fwd: Approval for placing a Reserved matter at the Board
meeting to be held in May 9, 2026.
9 messages
---------- Forwarded message ---------
From: Archana Goyal <[email protected]>
Date: Fri, 1 May 2026 at 4:54 PM
Subject: Approval for placing a Reserved matter at the Board
meeting to be
held in May 9, 2026.
To: Nalin Negi <[email protected]>
Cc: Ranjan Ghosh <[email protected]>
INTERNAL
Dear Nalin,
We propose to place the following matter for approval at the Board
meeting scheduled to be held on May 09, 2026:
1. To consider and approve Increase in Authorised Share
Capital of the Bank and consequent amendment in clause V of
Memorandum of Association and seek prior approval from RBI in
this Connection.
A note on the said matter is enclosed.
Pursuant to the Shareholders' Agreement dated October 26, 2021
("SHA") executed between Centrum Financial Services Limited
("CFSL "), Resilient Innovations Private Limited ("RJPL "), and
Unity Small Finance Bank Limited ("the Bank"), the
aforementioned reserved matter require written consent from RJPL
and CFSL before being placed before the Board for discussion/
approval.
We kindly request you to share your consent in this regard.
Please let us know if you have any questions or queries.
Thanks & regards,
Archana Goyal
Company Secretary & Head of Sustainability I Unity Small
Finance Bank Limited Centrum House, CST Road, Vidyanagari
Marg, Mumbai – 400098 +91 9867029555 I 022- 42159000
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 23 of 59
[email protected]”
E-mail dated 8 July 2026
“Fwd: Proposal for Increase in Authorised Share Capital of Unity
Bank Aanchal Aggarwal <[email protected]>
Wed, Jul 8, 2026 at 7:11 PM
To: Transaction Legal <[email protected]>
---------- Forwarded message---------
From: Nalin Negi <[email protected]>
Date: Wed, 8 Jul 2026 at 7:10 PM
Subject: Fwd: Proposal for Increase in Authorised Share Capital of
Unity Bank
To: Sumeet Singh <[email protected]>, Aanchal Aggarwal
<[email protected]>, Rajnish Kumar
<Kumar.rafnishl [email protected]>
---------- Forwarded message---------
From: Ranjan Ghosh <[email protected]>
Date: Wed, 8 Jul 2026 at 7:08 PM
Subject: Fwd: Proposal for Increase in Authorised Share Capital of
Unity Bank
To: Nalin Negi <[email protected]>
Hi Nalin,
As discussed, we need to increase the Authorised Share Capital of
the Bank in order to facilitate the conversion of existing warrants.
Current Authorised Share Capital:
The present Authorised Capital of the Bank is Rs.
4000,00,00,000/- (Rupees Four Thousand Crore Only) divided into
170,00,00,000 (One Hundred and Seventy Crore) Equity share of
Rs. JOI- each and 230,00,00,000 (Two Hundred and Thirty Crore)
Preference share of Rs. 10/- each. Further, the present paid -up
capital of the Bank is Rs. 2953,39,90,360 /divided into 70,49,
01,960 Equity Shares of Rs. 10/- each (issued to Centrum/Bharat
Pe) and 224,84,97,076 Preference Shares of Rs. 10/- each (issued
to institutional depositors as per scheme of PMC)
Proposed Authorised Share Capital:
It is proposed to increase the Preference shares by 50 Crores.
Thus, the revised Authorised Capital will be Rs.
4500,00,00,000/- (Rupees Four Thousand Five Hundred Crore
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 24 of 59
Only) divided into 170,00,00,000 (One Hundred and Seventy
Crore) Equity share of Rs. 10/- each and 280,00,00,000 (Two
Hundred and Eighty Crore) Preference Shares of Rs 10/- each.
The proposal involves an increase only in the Preference Share
Capital as warrants which have been subscribed already have to
mandatorily convert into CCPS as per scheme (we have kept a
buffer). There is sufficient headroom available under the existing
Equity Authorised Capital (Rs. 1,700 Crore - Rs. 705 Crore = Rs.
995 Crore) to facilitate any future rights issue or preferential
allotment of equity shares. Since the entire process will take close
to 3 months, (see below) we intend to place this matter at the
ensuing board meeting. We need to do this right away as we will
be in a difficult spot when subscribed warrants are due for
conversion to CCPS in Oct26. Please note that raising the
Preference capital limit does not impact the discussion between
shareholders on future capital structure.
The proposed process flow and indicative timelines are set out
below:
Sr.
No.
Process Flow Timelines
1. Approval by the Board for
Increase in Authorised Capital
July 25, 2026
2. Submission of Application to
RBI for approval of Increase in
Authorised Capital and
obtaining NOC
July 28, 2026
3. RBI Approval 2 months (September
30, 2026)
4. Approval of the Board through
Circulation for convening
EGM
Within 3 days of RBI
approval.
5. Convening of Extra Ordinary
General Meeting at shorter
notice for member's approval
Within 7 days from the
approval by Board by
giving Shorter Notice.
6. Filing of e-form SH-7 and
MGT-14 for the approval of
such Increase
Forms will be filed
within 3 days from the
approval of members,
the approval from the
Registrar of Companies
(ROC) will be received
on the same day of
filing as these are STP
forms.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
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35. Clearly, therefore, acknowledging the fact that steps to be taken
towards compliance with the directives of the RBI would constitute a
“Reserved Matter” within the meaning of Clauses 6.11(d) and 8 of the
SHA, the written consent of Resilient thereto the was being sought by
Unity, vide the aforenoted e-mails.
36. By communication dated 5 May 2026 and 9 July 2026,
Resilient specifically rejected the proposal of Unity for increasing its
authorised share capital and reducing the shareholding of Resilient in
the process.
37. Despite the rejection, by Resilient, of Unity’s proposal, Unity,
on 18 July 2026, circulated an Agenda for meeting of its Board to be
convened on 25 July 2026, which included Agenda Item 18 supra .
38. Resilient immediately addressed a communication dated 20
July 2026 to Unity objecting to tabling of Agenda Item 18 before the
Board on 25 July 2026, specifically asserting that Agenda Item 18
could not be tabled without the prior written consent of Unity as
required by Clauses 5.2, 6.11(d) and 8 of the SHA.
39. As the tabling of Agenda Item 18 before the meeting of the
Board, scheduled for 25 July 2026, was imminent, and as Clause 17 of
the SHA envisages resolution of dispute by arbitration, Resilient has
approached this Court by means of OMP (I) (Comm) 293/2026,
containing the following prayer clause:
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 26 of 59
“In view of the facts and circumstances mentioned hereinabove, it
is respectfully prayed that this Hon’ble Court may be pleased to:-
a. Pass an interim measure of protection, restraining
Respondent No.1, its directors and any person acting on its
behalf, from taking up for consideration, deliberating upon,
voting on, approving, passing any resolution, ratifying or
acting upon Agenda Item No. 18 and 20 of the Impugned
Agenda dated 18 July 2026, at the meeting of the Board of
Directors of Respondent No.1 scheduled on 25 July 2026
or at any adjourned or subsequent meeting, or by
circulation or otherwise, without the prior written consent
of the Petitioner in accordance with Clauses 6.11(d) and 8
read with Schedule 2 of the Shareholders’ Agreement dated
26 October 2021;
b. Pass an interim measure of protection, restraining
the Respondents, their directors, officers, employees,
agents and any person acting on their behalf, from taking
any decision or action in respect of any Reserved Matter
under Clauses 6.11 (d) and 8 read with Schedule 2 of the
Shareholders’ Agreement dated 26 October 2021, including
any increase in the authorised share capital of Respondent
No.2, any amendment to Clause V of its Memorandum of
Association, and any application to the Reserve Bank of
India or any other authority in respect thereof without the
prior written consent of the Petitioner;
c. Pass an interim measure of protection, restraining
the Respondents, their directors, officers, employees,
agents and any person acting on their behalf, from
breaching the Shareholders’ Agreement dated 26 October
2021;
d. Direct the Respondents to maintain status quo, as on
the date prior to circulation of the Impugned Agenda Item
Nos.18 and 20 on 18 July 2026;
e. Direct the Respondents to furnish all details of the
current holders of Warrants of Respondent No.1, as well as
the details of all transfers and encumbrances, undertaken by
Respondent Nos. 2 and 3 of the Warrants till date;
f. Pass an ad-interim ex-parte reliefs in terms of
prayers (a) to (e) hereinabove; and
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 27 of 59
Pass such other and further orders as this Hon'ble Court
may deem just, equitable and proper in the facts and
circumstances of the present case.”
F. The impugned judgment
40. By judgment dated 24 July 2026, a learned Single Judge of this
Court has issued notice in OMP(I)(Comm) 293/2026 and has granted
ad interim relief in the following terms:
“26. Having regard to the overall circumstances of the case, the
respondents are restrained from tabling, considering, deliberating
or approving any proposed resolution contained in the impugned
Agenda item no.18. It is made clear that the meeting scheduled to
be held on 25.07.2026 may continue, however, only in respect of
items other than impugned Agenda item no. 18.
”
41. The rival submissions of the parties before the learned Single
Judge were as under.
F.I Submissions of Resilient
42. Resilient submitted that the word “securities”, as defined in
Clause 1.1 of the SHA, was to be ascribed the meaning applicable to
the expression as defined in the Companies Act 2013. Thus
understood, the warrants issued by Unity in 2021 and transferred to
third parties, on the basis of which CCPSs could be issued, would also
be encompassed within the expression “securities”.
43. Resilient predicted its case primarily on Clause 6.11(d) of the
SHA. It was pointed out that the Clause proscribed the very taking up
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
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of reserved matters by the Board of Unity without the prior written
consent of Resilient and Centrum in terms of Clause 8 of the SHA.
44. This requirement was reiterated in Clause 8 as well. No item
which constituted a “Reserved Matter”, within the meaning of the
Schedule 2 to the SHA could, therefore, be taken up in a Board
Meeting of Unity sans such prior written consent.
45. The proposal contained in Agenda Item 18 was, it was
submitted, a “Reserved Matter” under Schedule 2 to the SHA,
particularly clauses (a) and (f) therein, as it proposed amendments in
the MOA of Unity which would affect the rights of the shareholders.
It was further pointed out that clause (f) in the Schedule 2 to the SHA
embraced any change in the capital structure of Unity, including
changes introduced by new issues of shares, securities etc., as falling
within the ambit of the expression “Reserved Matter”.
46. Thus, it was not permissible to table Agenda Item 18 before the
Board of Unity without the prior written consent of Resilient. This
position was acknowledged not only in the expressed wordings of
Agenda Item 18 but also in the e-mails dated 23 October 2025, 5 May
2026 and 8 July 2026 addressed by Unity to Resilient and Centrum.
47. It was pointed out that Resilient had responded specifically to
each of these e-mails, opposing the proposal to table Agenda Item 18
in the meeting of the Board of Unity. Resilient reiterated the fact that
Agenda Item 18 specifically envisaged consideration and approval for
increase in the authorised share capital of Unity, which would require
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
17:32:20
FAO(OS) (COMM) 221/2026 Page 29 of 59
amendments in Clause V of its MOA and would, therefore, constitute
a “Reserved Matter” for the purposes of Clauses 6.11(d) and 8 of the
SHA.
48. It was also pointed out that passing of the proposed Resolution
by the Board would result in reduction of the shareholding in Unity
from 49% to 21% which could not be affected without Unity’s written
consent in terms of Clause 5.2 of the SHA. The entire exercise,
submitted Resilient, was in the nature of a devious ploy to
substantially decrease Resilient’s shareholding in Unity.
49. Resilient, therefore, submitted that a clear prima facie case
existed to restrain Unity, pending resolution of the dispute by
arbitration, from tabling Agenda Item 18 in its Board Meeting.
50. Grant of such an injunction, it was submitted, would not violate
any statutory provision or Regulation issued by the RBI.
51. It was also pointed out that Annexure A to the warrants
themselves, which contained the terms and conditions thereof,
specifically provided that the terms and conditions stipulated in the
SHA would prevail over those contained in the warrants in the case of
conflict. Clause 3 of the SHA also provided that transfer of the
warrants was subject to the Articles of Association of Unity and to the
SHA. A similar covenant was to be found in Clause 4.2 (b) of the
SHA.
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
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52. In these circumstances, Resilient submitted that, applying the
principles of a prima facie case, balance of convenience and
irreparable loss, a clear case for grant of interim protection, in
exercise of the powers conferred on this Court by Section 9 of the
1996 Act, was made out.
F.II Submissions of Unity
53. Contesting the submissions advanced by Resilient, Unity
asserted that issuance of warrants and conversion of warrants to the
CCPSs would not constitute a “Reserved Matter” within the meaning
of Clause 8 or Schedule 2 to the SHA. The warrants, it was submitted,
had already been approved and issued in 2021, and what was being
tabled before the Board of Unity was only conversion of the warrants
to CCPSs. The intention was to increase the share value of the
warrants.
54. Warrants totalling ₹ 90 crores already stood issued consequent
to the EOGM meeting of Unity held on 22 October 2021, to which
Resilient was a party. Unity submitted that, at that time, Resilient
never raised any objection to issuance and transfer of the warrants and
did not take any steps towards challenging such issuance or transfer
by any means known to law. These warrants were due for conversion
into CCPSs by 31 October 2026. For this, however, Unity was in need
of adequate authorized share capital, so as to be able to issue the
requisite number of CCPSs. It was for this purpose that Unity
proposed to increase its authorized share capital from ₹ 4,000 crores
to ₹ 4,900 crores, which, in turn, required an amendment in Clause
Signature Not Verified
Digitally Signed By:AJIT
KUMAR
Signing Date:05.11.2026
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FAO(OS) (COMM) 221/2026 Page 31 of 59
(B) of the MOA. As the warrants had been issued in 2021, and were
due for conversion into CCPSs on or before 31 October 2026, the
resolution to that effect was required to be approved by the Board of
Unity.
55. Unity further stressed that Clause 4.2 of the Annexure A to the
warrants required the warrants to be converted into CCPSs within 60
months from allotment, failing which they would lapse and the
amount paid by the transferees for transfer of the warrants would
stand forfeited by Unity. It was further submitted that conversion of
the warrants into CCPSs did not result in any prejudice to Resilient, as
the CCPSs would not confer any voting rights to the holders thereof,
as specified in Clause 4.4(g) of Annexure A to the warrants. For ready
reference, Clauses 4.2 and 4.4(g) of the Annexure A to the warrants
may be reproduced as under:
“4.2 Warrant Exercise Period
(a) The Exercise Right may be exercised by the Series
1 Warrant Holder, at its option and in line with the
provisions of the Shareholders Agreement (read with such
deed of adherence/ deed of undertaking executed by the
Series 1 Warrant Holder), at any time during normal
business hours before expiry of 60 (sixty) months from the
date of the Allotment, and in no event thereafter ("Warrant
Exercise Period").
(b) Any Warrant — Series 1 which has not been
exercised on or before expiry of 60 (sixty) months from the
date of the allotment, will lapse and cease to be valid and
any amounts paid towards them to date will stand forfeited
by the Company.”
*
“4.4 Issue of Compulsorily Convertible Preference Shares
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Pursuant to Clause 4.3 above, the Compulsorily
Convertible Preference Shares to be issued upon exercise
of the Warrant — Series 1, shall be issued and subscribed
to in accordance with the provisions of Applicable Laws
and shall carry the following terms and conditions:
*
(g) The holders Compulsorily Convertible Preference
Shares shall not be entitled to any voting rights, except in
relation to matters that directly affect the terms of
Compulsorily Convertible Preference Shares. Further, the
Warrants — Series 1 by itself does not provide to the
Holder any right of shareholders of the Company, including
voting right.”
56. Unity contested the submission of Resilient that Agenda Item
18, and its subject matter, constituted a “Reserved Matter” within the
meaning of Clauses 6.11(d) and 8 of the SHA. It was submitted that,
in fact, Agenda Item 18, and its subject matter, fell within Clauses
5.1(a) and (b) of the SHA, which did not constitute “Reserved
Matters”. Unity sought to contend that initial investment was covered
by Clauses 5.1(a) and (b) of the SHA and it was only infusion of
additional capital beyond the initial investment which would
constitute a “Reserved Matter” for the purposes of the SHA.
57. Failure to convert the warrants to CCPSs on or before 31
October 2026, it was sought to be contended, would result in
catastrophic consequences. Especial reliance was placed by Unity on
the letter dated 18 June 2021 from RBI to Centrum, which required
the dilution of Centrum's initial shareholding to below 40% and
reduction of the shareholding of Resilient to below 10% to be effected
within 8 years of commencement of business, which would expire on
31 October 2026. Agenda Item 18 had been issued only in compliance
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with the mandate of the RBI.
58. In the event of failure to comply with the requirements in para
2(i)(c) of the letter dated 18 June 2021, the amounts invested by the
transferees of the warrants would stand forfeited, which would result
in serious financial repercussions. Reliance was also placed by Unity
on a letter dated 10 June 2024 between Resilient and Centrum,
whereby, according to Unity, the obligations contained in Clauses
12.1 and 12.4 of the SHA were waived by mutual consent, and neither
party was required to obtain consent before third party transfers of the
warrants.
59. Unity, therefore, sought to contend that Resilient was, by means
of the OMP, seeking to block an issue to which it had already lent its
consent. It was further submitted that Unity was not entitled to
maintain its claim even on application of the principles of estoppel
and acquiescence. The prayer of Unity to interdict the tabling of
Agenda Item 18 would also not be in public interest. It was further
submitted that the transferees of the warrants had not been made
parties, who would be affected by the grant of relief sought by the
parties and had not been made parties in the OMP.
60. For all these reasons, Unity submitted that the prayers of
Resilient deserve to be rejected and prayed accordingly.
F.III Submissions of Centrum
61. Centrum advanced separate submissions before the learned
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Single Judge. Centrum claimed that it was also a warrant holder to
whom warrants had been transferred in 2021 for conversion of the
equity shareholding of Unity into CCPSs. Centrum had also executed
the required Deed of Undertaking on 28 October 2022.
62. In such circumstances, Centrum submitted that conversion of
the warrants to the CCPSs was a vital right of the warrant holder
under the SHA as well as under Annexure A to the warrants
themselves. Failing to ensure such conversion before 31 October 2026
would result in lapsing of the warrants and enormous financial loss to
the warrant holders.
63. Centrum further submitted, relying on Clause 3.1 of Annexure
A to the warrants, that, transfer of the warrants to third parties having
already been processed, the approval of the Board of Unity, thereto,
had to be deemed to have been granted, as provided in Clause 3.1(a).
It was for this reason that warrant holders, such as Centrum, had
already executed Deeds of Undertaking as required by Clause 3.1(b)
of Annexure A to the warrants. Following this, the transfers were
being processed absolutely in terms of the Depositories Act, 1996, as
required by Clause 3.3 of Annexure A to the warrants.
64. Centrum further placed reliance on Section 22(3)(a), (b) and (c)
11
of the Banking Regulation Act, 1949 , as the license to conduct
banking business had been issued by RBI to Unity in terms of Section
22 thereof. Any violation of the conditions imposed by the RBI in its
letter dated 12 October 2021 while granting final approval to Unity to
11
“the BRA” hereinafter
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conduct banking business in India would, therefore, render Unity
liable to penalty under Section 47A of the 1949 Act. Centrum further
echoed Unity’s submission that the OMP filed by Resilient was
devoid of merit and prayed for its dismissal.
F.IV Submissions of Resilient in Rejoinder
65. In rejoinder, Resilient once again reiterated its reliance on the
letters dated 23 October 2025, 1 May 2026 and 8 July 2026 from
Unity to Resilient and Centrum. It was submitted that once Unity had
admitted, in the said letters, that the subject matter of Agenda Item 18
constituted a “Reserved Matter”, which needed the written consent of
Resilient, it was estopped from arguing to the contrary.
66. Resilient further submitted that Unity had conflated the aspect
of compliance with the conditions imposed by the RBI in its letter
dated 18 June 2021 while issuing approval to Unity to carry out
banking business with the aspect of whether Agenda Item 18 could be
tabled without prior written consent of Resilient.
67. It was further submitted that the consent given in 2021 was not
for an amendment of the MOA or the capital structure of Unity and
could not, therefore, estop Resilient from maintaining its OMP. In any
event, submitted Resilient, the SHA was executed after the approval
letters dated 18 June 2021 and 12 October 2021 from RBI.
68. Resilient finally contended that there was no dispute about the
fact that CCPSs constituted equity share capital of Unity. Conversion
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of ₹ 100 crores worth of additional equity capital of Unity to CCPSs
would result in reduction of the shareholding of Resilient from 49% to
21%, which would be in direct contravention of the SHA, and would
also result in proportionate increase of the shareholding of Centrum
and JBCG.
69. Resilient, therefore, reiterated its prayers in the OMP.
F.V Analysis by the learned Single Judge
70. In arriving at the conclusion to issue notice on the OMP and
grant an ad interim relief as noticed earlier, the learned Single Judge
has reasoned thus:
(i) The expression “securities”, as defined in Clause 12.4 of
the SHA specifically included, within its ambit, warrants.
(ii) Clauses (a) and (f) in Schedule 2 to the SHA specifically
included any amendment to the MOA or the AOA, which could
affect the rights of the shareholders or change the capital
structure of Unity, either through issue of new shares or
securities or by reduction in share capital, or any amendment of
the rights, concessions, terms or restrictions relating to the
securities of Unity.
(iii) Clause 6.11(d) of the SHA specifically proscribed taking
up, for consideration or approval, any Reserved Matter, by the
Board of Unity, without prior written consent from Resilient
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and Centrum. The clause brooked of no ambiguity and was
mandatory in terms.
(iv) Clause 8 of the SHA commenced with a non-obstante
clause and, therefore, prevailed over all remaining clauses of
the SHA.
(v) Unity was, therefore, completely proscribed from any
decision or action in respect of Reserved Matters unless
approved by affirmative vote or prior written consent, by
Resilient as well as Centrum. For this purpose, before taking
any decision or action on a Reserved Matter, Unity was
required to send a written communication with the relevant
material to Resilient and Centrum, seeking for their consent. It
was only after consent was received that the Reserved Matter
could be taken up for any decision or action by the Board of
Unity.
(vi) Annexure A to the warrants provided that the SHA would
prevail over the terms of the warrants. Clause 3.1(e) in
Annexure A specifically stated that the warrants were subject to
the SHA in force at the time of the proposed transfer of the
warrants. This rendered the transfer of warrants subject to
Clauses 6.11(d), 8 and Schedule 2 of the SHA.
(vii) Similar wordings were to be found in Clause 8 of the
SHA, which read thus:
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“8. RESERVED MATTERS
Notwithstanding anything contained in this Agreement or
the Memorandum and Articles, the Company shall not take
any decisions or action in respect of the Reserved Matters
(whether through the Board, Committee, Shareholders,
employees or officers of the Company), unless such action
or decision has been approved (by way of an affirmative
vote or prior written consent) by at least 1 (one)
representative from each of Centrum and RIPL. In order to
facilitate the process of the Board, prior to taking up for
decision or action any Reserved Matter or any action
connected with it, the Company shall send a written
communication, together with all available supporting
documents and proposed resolution, to Centrum and RIPL
requesting their consent to the same. Once Centrum and
RIPL have consented to the Reserved Matter, the same
shall be taken up at the meeting of the Board, Committee or
Shareholders, as may be applicable, in the Ordinary Course
of Business of the Company.”
(viii) If, therefore, the subject matter of Agenda Item 18 was a
“Reserved Matter” within the meaning of Clauses 6.11(d), 8 of
the SHA read with Schedule 2 thereto, it could not have been
tabled without prior written consent of Resilient. Specifically,
as Resilient had refused consent, the said Agenda Item could
not be allowed to be tabled.
(ix) The learned Single Judge, thereafter, goes into detail
whether the subject matter of Agenda Item 18 constituted a
“Reserved Matter” within the meaning of the SHA.
(x) The very title of Agenda Item 18 indicated that it was
intended to increase the authorized share capital of Unity and
involved amendment of Clause V of the MOA and seeking
prior RBI approval therefor. The reason for Agenda Item 18
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was not, therefore, in dispute.
(xi) The Agenda Item itself stated that Unity was required to
increase its authorized share capital to enable further issuance
of CCPSs and equity shares.
(xii) As per the SHA, any amendment to the MOA or the
AOA of Unity, or change in its capital structure, was a
“Reserved Matter”. It was for this reason that Unity wrote
repeatedly to Resilient and Centrum, seeking their approval for
tabling of Agenda Item 18 in the Board meeting.
(xiii) Agenda Item 18 itself admitted that, for its
implementation, amendment of the MOA of Unity, and change
in its capital structure, was required, and that this constituted a
“Reserved Matter”. In view of the plain admission, in Agenda
Item 18 itself, that its subject matter constituted a “Reserved
Matter”, it was not open either to Unity or to Centrum to
contend to the contrary. Unity acknowledged this position by
writing to Resilient on 23 October 2025, 1 May 2026 and 8 July
2026, seeking the consent of Resilient for discussion and
approval of the proposed resolution contained in Agenda Item
18.
(xiv) In that view of the matter, the contention of Unity before
the Court, that Agenda Item 18 did not constitute a “Reserved
Matter”, was contrary to its own course of conduct.
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(xv) In response to the communications from Unity, Resilient
had, in writing, specifically refused to give consent for tabling
of Agenda Item 18.
(xvi) Unity and Centrum, however, also sought to contend that
the subject matter of Agenda Item 18 related to action to be
taken post approval thereof, which was relatable to Clause
5.1(a) and (b) of the SHA, and not to Clause 5.2 thereof, and
was not, therefore, a “Reserved Matter”. This submission was
unsustainable. Agenda Item 18 did not cover action to be taken
after decision on the issues mentioned therein, but specifically
dealt with tabling of the proposal to alter the share capital of
Unity and take action which was clearly covered within the
definition of “Reserved Matter”. It was also admitted that, for
such action to be taken, the MOA/AOA of Unity would have to
be amended. As such, the subject matter of Agenda Item 18
clearly fell within the ambit of the expression “Reserved
Matter” as envisaged in Clauses 6.11(d) and 8 and Schedule 2
to the SHA.
(xvii) It was necessary therefore, for Unity and Centrum to
comply with the mandate of SHA and the procedure envisaged
therein.
(xviii) Resilient had approached the Court, apprehending
drastic reduction of its shareholding in Unity from 49% to 21%
if the amendment of Clause V of the MOA was permitted to
take place. This apprehension was required to be considered
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and addressed before Agenda Item 18 was tabled before the
Board. This clearly indicated that the requirement of prior
written consent of Resilient and Centrum before tabling of said
Agenda Item was not a mere formality, but was mandatory.
(xix) Clause V was an integral part of the MOA. Any
amendment of Clause V had, therefore, to be by way of a Board
resolution, which mandated prior consent of all majority
shareholders, which included Resilient.
(xx) In view of the express covenants and terms of the SHA,
the argument of public interest, advanced by Unity, was
unappealing.
(xxi) In these circumstances, it was clear that there was a
prima facie case in favour of Resilient. On a construction and
interpretation of the various clauses of the SHA, Clause V of
the MOA and Annexure-A to the warrants, the balance of
convenience was also in favour of the Resilient. In the event of
Agenda Item 18 being permitted to be tabled before the Board,
Unity was liable to suffer irreparable loss.
71. In these circumstances, the learned Single Judge expressed the
opinion that a case for restraining Unity from tabling or considering
the resolution envisaged in Agenda Item 18 was made out, and
ordered accordingly.
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72. The impugned judgment permits the meeting of the Board of
Unity to continue in respect of Agenda Items other than Agenda Item
18.
G. Rival Submissions before us
G.I Submissions of Mr. Mukul Rohatgi for Unity
73. Mr. Rohatgi submits that Unity was working under a license
12
issued to it by the RBI in terms of Section 22(1) of the BRA and
that, therefore, the RBI was empowered to issue directions to Unity
13
under Section 35-A(1) thereof, which would be statutorily binding
on Unity. He submits that Unity had suppressed the directions issued
by the RBI in 2021. The learned Single Judge, submits Mr. Rohatgi,
could not have injuncted compliance with Section 35-A(1) of the
BRA.
74. Unfortunately, submits Mr. Rohatgi, the learned Single Judge
provided no time to Resilient to bring the necessary documents and
information on record. Agenda Item 18 was issued on 18 July 2026,
12
22. Licensing of banking companies .—
(1) Save as hereinafter provided, no company shall carry on banking business in India unless
it holds a licence issued in that behalf by the Reserve Bank and any such licence may be issued
subject to such conditions as the Reserve Bank may think fit to impose.
13
35-A. Power of the Reserve Bank to give directions .—
(1) Where the Reserve Bank is satisfied that—
( a ) in the [public interest]; or
( aa ) in the interest of banking policy; or
( b ) to prevent the affairs of any banking company being conducted in a manner
detrimental to the interests of the depositors or in a manner prejudicial to the interests of
the banking company; or
( c ) to secure the proper management of any banking company generally;
it is necessary to issue directions to banking companies generally or to any banking company in
particular, it may, from time to time, issue such directions as it deems fit, and the banking
companies or the banking company, as the case may be, shall be bound to comply with such
directions.
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arguments were heard by the learned Single Judge on 21 July 2026,
orders were reserved by him on 23 July 2026, and pronounced on 24
July 2026, a day before the meeting of the Board of Unity.
75. Mr. Rohatgi submits that there was no justification or necessity
for the learned Single Judge to injunct the holding of the Board
meeting. He specifically cites the judgment of a Division Bench of
this Court, authored, incidentally, by one of us (C. Hari Shankar J.) in
14
Jai Kumar Arya v. Chhaya Devi , relying on paras 133 to 135, 145,
151, 152 to 154, 157, 159 and 160 thereof.
76. Mr. Rohatgi further submits that the RBI had specifically
directed that the reference to “Reserved Matters” was to be removed
from the AOA of Unity, and that it was duly removed as far back as in
2021. This fact, too, he submits, was concealed by Unity in its OMP.
The SHA, he submits, cannot override the AOA. He cites paras 261 to
266 of the judgment of the Supreme Court in Vodafone International
15
Holdings BV v. Union of India . Mr. Rohatgi further places reliance
on Article 142 of the AOA of Unity, which read thus:
OVERRIDING EFFECT
142.
(1) All actions under these Articles shall be carried on
in abidance with Applicable Law. Further, the Company
shall do all such things as are permitted by Applicable Law,
including but not limited to, the Guidelines, the Act, the
Banking Act, the RBI Act, and any other applicable
regulation enacted or amendment made to existing laws or
judicial decisions, made from time to time.
14
2017 SCC OnLine Del 11436
15
(2012) 6 SCC 613
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(2) In case of any inconsistency between the provisions
of these Articles and the Act, the provisions of the Act will
prevail.
(3) The provisions of the Act shall apply to the
Company except in so far as the said provisions are
inconsistent with the provisions of the Banking Act or the
Guidelines. In case of any inconsistency between the
provisions of the Act and Banking Act or the Guidelines,
the provisions of Banking Act or the Guidelines, as the case
may be, will prevail.
77. Agenda Item 18, submits Mr. Rohatgi, did not constitute a
“Reserved Matter”, within the meaning of the SHA. The reference, to
the contrary, in the letter is addressed by Resilient to Unity, which
were written by a Company Secretary, he submits, was by mistake.
Without prejudice, Mr. Rohatgi relies on Clauses 3.5(c), 5.1 and 5.2
of the SHA to submit that the initial capital infusion of ₹ 900 crore
was not subject to Clause 8, and only additional capital, beyond the
initial investment, was so subject.
78. Mr. Rohatgi also placed reliance on a Mutual Waiver Letter
dated 10 June 2024 executed between Resilient and Centrum,
whereby they agreed to transfer the securities, including warrants,
held by them in Unity to any third person for a consideration of up to
₹ 750 crores each. The requirement of taking of written consent of
Resilient before issuing the warrants, it is submitted, stands novated
by this communication.
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79. Mr. Rohatgi has also cited, in support of his submissions, paras
16
47 to 49 of Gujarat Bottling Co. Ltd v. Coca-Cola Co. and para 6
17
and 100 of LIC v. Escorts Ltd .
G.II Submissions of Mr. Gopal Subramanium, for Resilient
80. Responding to the submissions of Mr. Rohatgi, Mr. Gopal
Subramanium once again referred us to the three requests by Unity to
Resilient to accede to the tabling of Agenda Item 18. He submits that
Unity’s plea that the reference to the Agenda Item 18 as a “Reserved
Matter”, in the said communications, was an inadvertent error, can
obviously not be accepted. Inasmuch as Agenda Item 18, and is
subject matter, fell within the ambit of the expression “Reserved
Matter”, within the meaning of Clause 8 of the SHA, Mr.
Subramanium submits that it could not have been tabled without the
prior written consent of Unity and Centrum. Clause 8, he points out,
commences with a nonobstante clause and, therefore, also supersedes
the AOA. In case the Resolution proposed by Agenda Item 18 is
passed by the Board of Unity, Mr Subramanium submits that the share
capital of Resilient would stand reduced from 49% to 21%, rendering
the arbitration itself academic.
81. Mr. Subramanium further points out that, in a bid to resolve the
controversy, a notice under Section 21 of the 1996 Act stands issued
by Resilient on 11 August 2026, but that there is no response from
Unity.
16
(1995) 5 SCC 545
17
(1986) 1 SCC 264
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82. With respect to the mutual waiver letter dated 10 June 2024,
Mr. Subramanium submits that the true facts have not been disclosed
to this Court. Two days after the said letter was written, he points out
that, by letter dated 12 June 2024, Resilient and Centrum engaged
18
Rothschild & Co. Pvt Ltd as their financial advisory with third
parties for transfer of shareholdings. They, therefore, executed an
Addendum to the Mutual Waiver Letter dated 19 June 2024,
permitting third-party transfer of shareholdings only through
Rothschild. In any event, submits Mr. Subramanium, the Mutual
Waiver Letter, as well as the Addendum thereto, were subject to the
SHA. He further points out that, by letter dated 26 August 2025,
Resilient communicated that the mandate of Rothschild had expired
and that, therefore, the Mutual Waiver Letter and the Addendum
thereto had ceased to be in force.
83. The contention that the clause relating to “Reserved Matters”
stands deleted from the AOA, consequent to the directions issued by
the RBI, submits Mr. Subramanium, is in the nature of a sham
defence. No such contention was urged before the learned Single
Judge. In any event, submits Mr. Subramanium, the letter dated 28
September 2021 of the RBI merely directed deletion of Articles 169
and 170 from the AOA and did not specifically issue any direction
with regard to the “Reserved Matters” Clause in the SHA. He points
out, in this regard, that the SHA, which was issued thereafter, was
specifically to the RBI for approval, and that the RBI did not notice or
point out any infirmity in the “Reserved Matters” Clause. Relying on
18
“Rothschild” hereinafter
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paras 261 to 268 of the judgment of the Supreme Court in Vodafone ,
Mr. Subramanium submits that an affirmative covenant in the SHA
would be enforceable even in the absence of any parallel covenant in
the AOA.
84. Mr. Subramanium further submits that implementation of the
impugned judgment of the learned Single Judge would not breach any
directive of the RBI. He submits that Clause 5.1 of the SHA is not
applicable. No capital infusion for the 2026-2027 Financial Year has
been planned even in the Business Plan of Unity for that year. He has
specifically drawn attention to the wordings of Clause 5.1 (b) of the
SHA. He further points out that Clause 4.2 of the Terms and
Conditions of the Warrants are in line with the provisions of the SHA.
85. For all these reasons, submits Mr. Subramanium, no case for
interference, by this Court, with the judgment of the learned Single
Judge, can be said to exist.
H. Scope of interference
86. The impugned order of the learned Single Judge is
fundamentally discretionary in nature. The scope of interference, in
appeal, with discretionary orders passed in commercial matters, stands
thus explained by the Supreme Court in Wander Ltd v. Antox India
19
Pvt Ltd :
19
1990 Supp SCC 727
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“14. The appeals before the Division Bench were against the
exercise of discretion by the Single Judge. In such appeals, the
appellate court will not interfere with the exercise of discretion of
the court of first instance and substitute its own discretion except
where the discretion has been shown to have been exercised
arbitrarily, or capriciously or perversely or where the court had
ignored the settled principles of law regulating grant or refusal of
interlocutory injunctions. An appeal against exercise of discretion
is said to be an appeal on principle. Appellate court will not
reassess the material and seek to reach a conclusion different from
the one reached by the court below if the one reached by that court
was reasonably possible on the material. The appellate court would
normally not be justified in interfering with the exercise of
discretion under appeal solely on the ground that if it had
considered the matter at the trial stage it would have come to a
contrary conclusion. If the discretion has been exercised by the
trial court reasonably and in a judicial manner the fact that the
appellate court would have taken a different view may not justify
interference with the trial court's exercise of discretion. After
referring to these principles Gajendragadkar, J. in Printers
20
(Mysore) Private Ltd. v. Pothan Joseph :
“... These principles are well established, but as has been
observed by Viscount Simon in Charles Osenton & Co. v.
21
Jhanaton ‘...the law as to the reversal by a court of
appeal of an order made by a judge below in the exercise of
his discretion is well established, and any difficulty that
arises is due only to the application of well settled
principles in an individual case’.” ”
87. As a Court exercising appellate jurisdiction over the exercise of
discretion by the learned Single Judge, we, therefore, would interfere
only if the exercise of discretion is arbitrary, capricious or perverse, or
ignores the settled principles relating to grant of interim injunctions.
We have to regard the appeal as an appeal on principle. Our
jurisdiction is, therefore, limited to determining whether the learned
Single Judge has erred on principle, and does not extend to
undertaking a virgin exercise into the facts and assessing, for
ourselves, whether we would have decided as the learned Single
20
AIR 1960 SC 1156
21
1942 AC 130
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Judge has. To employ a cliché, we are not to substitute our view for
the view of the learned Single Judge, even if we are of the opinion
that our view is more appropriate or apposite.
I. Applying the above principle
88. We have already indicated, towards the commencement of this
judgment, brief reasons for our decision not to interfere with the
judgment of the learned Single Judge, which would be reiterated
somewhat later. Prior thereto, we proceed to deal with the submissions
of Mr. Rohatgi, seeking setting aside of the impugned judgment,
seriatim .
I.1 Re. contention that impugned judgment was rendered in haste
89. Mr. Rohatgi expressed his unhappiness at the fact that the
learned Single Judge had not granted any opportunity to the appellant
to place its stand in writing, and has passed the impugned judgment in
haste. We do not agree. The power of the learned Single Judge to pass
ex parte ad interim directions cannot be disputed. The impugned
judgment has been rendered after hearing both sides. Inasmuch as the
meeting of the Board of Unity was to take place on 25 July 2026, the
learned Single Judge was clearly justified in passing the impugned
order prior thereto.
90. We, in fact, find the submission of Mr. Rohatgi surprising as
we had ourselves suggested that the learned Single Judge could be
directed to dispose of the OMP on an early date to be fixed by us. Mr.
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Rohatgi, on instructions, was unable to concede to this suggestion. It
cannot, therefore, lie in the mouth of Unity to contend that the learned
Single Judge acted in haste.
I.2 Re. Contention that learned Single Judge could not have
injuncted the holding of a Board Meeting
91. Mr. Rohatgi further submitted that the learned Single Judge
could not have injuncted the holding of a meeting of the Board of
Unity. The learned Single Judge has not, in fact, done so. The
impugned judgment merely restrains the tabling of Agenda Item 18, in
view of the fact that its subject matter was a “Reserved Matter” within
the meaning of Clause 8 of the SHA. Again, the power of the learned
Single Judge to do so can hardly be gainsaid.
I.3 Re. Deletion of “Reserved Matters” from the AOA of Unity,
pursuant to the directive of the RBI - Clause 8 of SHA prevails over
the AOA in view of non obstante clause
92. Considerable emphasis was placed, by Mr. Rohatgi, on the
letters from the RBI, calling for deletion, from the AOA of Unity, of
the clause dealing with “Reserved Matters”. Mr. Subramanium has
correctly countered the submission by pointing out that the deletion,
or otherwise, from the AOA, of “Reserved Matters”, did not in any
manner affect Clause 8 or Schedule 2 to the SHA.
93. Moreover, Clause 8 commences with a non obstante clause, by
operation of which Clause 8 would take precedence over the AOA
and MOA of Unity. The existence, or otherwise, of the clause
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pertaining to “Reserved Matters” in the AOA is, therefore, entirely
insignificant.
94. We also find substance and Mr. Subramanium’s submission
that the SHA, which was executed after the communication dated 28
September 2021 from the RBI, was itself sent to the RBI for approval,
and that the RBI did not express any reservation with respect to any
covenant of the SHA, including Clause 8 of the existence, therein, of
“Reserved Matters”. The RBI itself having not found anything
untoward or objectionable in the SHA, Unity cannot seek to escape
the rigour of Clause 8 or Schedule 2 to the SHA by referring to the
directives of the RBI.
I.4 Whether subject matter of Agenda Item 8 constituted “Reserved
Matter” within the meaning of the SHA
95. Mr. Rohatgi further submitted that the subject matter of Agenda
Item 18 was not, in fact, a “Reserved Matter”, and that the reference,
to the contrary, in the communications dated 23 October 2025, 1 May
2026 and 8 July 2026, from Unity to Resilient, was in the nature of an
inadvertent error.
96. These communications not only acknowledge the fact that the
subject matter of Agenda Item 18 was a “Reserved Matter”, they also
affirmatively seek the consent of Resilient for tabling the Agenda Item
before the Board of Unity. The express consent, sought in these e-
mail, may be reproduced for ready reference:
e-mail dated 23 October 2025
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“We propose to place the following matter for approval at the
Board meeting of USFB scheduled to be held on November 1,
2025:
1. To consider and approve Increase in Authorised
Share Capital of the Bank and consequent amendment in
clause V of Memorandum of Association and seek prior
approval from RBI in this Connection.
Draft Agenda note on the said matter is enclosed herewith for your
reference.
Pursuant to the Shareholders’ Agreement dated October 26, 2021
(“SHA”), your affirmative consent is requested for placing the
aforesaid Agenda before the Board for discussion/approval.
Please let us know if you have any questions or queries in this
connection.”
(Emphasis supplied)
e-mail dated 1 May 2026
“We propose to place the following matter for approval at the
Board meeting be held on May 09, 2026:
1. To consider and approve Increase in Authorised
Share Capital of the Bank and consequent amendment in
clause V of Memorandum of Association and seek prior
approval from RBI in this Connection.
A note on the said matter is enclosed.
Pursuant to the Shareholders’ Agreement dated October 26, 2021
(“SHA”) executed between Centrum Financial Services Ltd
(“CFSL”), Resilient Innovations Private Limited (“RIPL”) and
Unity Small Finance Bank Ltd (“the Bank”), the aforementioned
reserved matter require written consent from RIPL and CFSL
before being placed before the Board for discussion/approval .
We kindly request you to share your consent in this regard.”
(Emphasis supplied)
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97. The plea of the admission, by Unity, in the aforesaid
communications to Resilient, that the subject matter of Agenda Item
18 was a “Reserved Matter” having been an inadvertent error cannot
be raised in the present appeal, the scope of which is limited. In any
event, even on merits, the submission does not commend itself to
acceptance, as the communications from Unity specifically sought the
approval and concurrence of Resilient for Agenda Item 18, as it
constituted a “Reserved Matter”. Mr. Rohatgi’s submission to the
contrary merits rejection even on this sole ground.
98. Agenda Item 18 itself identified its subject matter as a
“Reserved Matter”, which required prior consent of Resilient. Unity
cannot be heard to argue to the contrary
99. That apart, when one refers to the various subjects which
constitute “Reserved Matters” as defined in Schedule 2 to the SHA, it
is clear that Agenda Item 18 in fact pertained to a “Reserved Matter”.
As was correctly submitted by Mr. Subramanium, the subject matter
of Agenda Item 18 squarely falls within clause (f) in Schedule 2,
which encompasses any change in the capital structure of Unity,
including, inter alia, by new issue of shares. Agenda Item 18 clearly
proposed change of the capital structure of Unity and throwing open
shareholding with third parties, with a reduction in the shareholding of
Resilient. We cannot, therefore, accept Mr. Rohatgi’s submission that
the subject matter of Agenda Item 18 was not a “Reserved Matter” as
envisaged by the SHA.
I.5 Re. submission that SHA could not override the AOA
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100. Mr. Rohatgi submitted, with emphasis, that the SHA could not
override the provisions of the AOA. This submission is obviously not
available to Unity, as a signatory to the SHA, Clause 8 of which
commences with a non obstante clause, according it pre-eminence
over the provisions of the AOA.
101. In any event, the submissions of Resilient, as accepted by the
learned Single Judge, do not result in according of any predominance
to the SHA over the AOA. The AOA, if amended in terms of the
directive of the RBI, but not contain any clause pertaining to
“Reserved Matters”. It does not, therefore, contain any clause which is
contrary to Clause 8 of the SHA. In enforcing Clause 8, therefore, no
provision of the AOA would be infracted.
I.6 Re. Jai Kumar Arya
102. Mr. Rohatgi also placed reliance on various paragraphs from
the judgment of the Division Bench of this Court authored by one of
us (C. Hari Shankar J.) in Jai Kumar Arya . We have already noted, in
para 76 supra , the various passages from Jai Kumar Arya on which
Mr. Rohatgi places reliance. None of the passages is of any particular
significance to the controversy before us, and we do not deem it
necessary to burden this judgment by referring individually to the said
paragraphs. The conclusion in para 160 of Jai Kumar Arya , which
Mr. Rohatgi especially emphasised, read thus:
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“160. The position, in law, that (i) there is no obligation to
disclose the reasons for removing a person from Directorship of a
Company prior to the EGM where such proposal is to be
considered, (ii) no injunction, of the decision to hold such EGM,
can be granted by the court, and (iii) the said reasons are immune
from judicial review, stands reinforced by this decision.”
The reliance, placed by Mr. Rohatgi, on this decision, underscores the
hazards in relying on a judicial pronouncement agnostic of the issue
which was before the Court. The Division Bench was seized with the
correctness, or otherwise, of the order passed by a learned Single
Judge, restraining the defendants before him from acting upon a
notice dated 8 July 2017, and the resolutions passed in the meeting of
the Board of Directors of Prabhat Zarda Factory Pvt. Ltd. convened
on 26 August 2017. This Court held that, as there was no obligation to
disclose the reasons for removing a person from Directorship of a
Company prior to the EGM where the proposal was to be considered,
the holding of the EGM could not have been injuncted by the Court.
Unity, in our view, cannot seek to rely on the observation that the
Court ought not to have injuncted the holding of the EGM in isolation,
as though it is an absolute proposition. Jai Kumar Arya is, therefore,
clearly distinguishable.
I.7 Re. contention that Clause 5.1 of SHA applied, and not Clause
5.2
103. We also express our inability to agree with Mr. Rohatgi in his
submission that Agenda Item 18 attracted Clause 5.1, and not Clause
5.2 of the SHA. As has been pointed out by Mr. Subramanium, Clause
5.1 deals with infusion of aggregate capital of ₹ 900 crores in line
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with the Business Plan of Unity. No such plea has been advanced
before the learned Single Judge.
104. On the other hand, Clause 5.2 squarely covers investment of
additional capital for the operation of Unity beyond initial investment.
Agenda Item 18 clearly envisaged such induction, by throwing open
shareholding to third parties. This specific eventuality is also
contemplated by Clause 5.2 in its further stipulation that issue of
Securities to persons other than the promoter or Resilient would
require the consent of both Centrum and Resilient.
105. We, therefore, are constrained to reject Mr. Rohatgi’s
submission that Agenda Item 18 attracted Clause 5.1 of the SHA.
I.8 Re. contention that the injunction granted by the impugned
judgment violates the directives of the RBI
106. This contention, as advanced by Unity, is predicated on the
premise that, as per the directives of the RBI, the warrants were
required to be enforced and that the learned Single Judge has
effectively blocked their enforcement.
107. The contention is obviously misplaced. The learned Single
Judge has not interdicted enforcement of the warrants, but has merely
directed, effectively, that their enforcement had to be in terms of
Clause 8 of the SHA. No directive of the RBI stands breached
thereby.
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I.9 The Sequitur
108. Having thus addressed the various submissions advanced by
Mr. Rohatgi, we can do no better, towards endorsing the findings of
the learned Single Judge, than reiterate them. The matter, as we see it,
is elementary. Clause 8 of the SHA specifically proscribes the taking
of any decision or action with respect to a Reserved Matter, within the
meaning of Schedule 2 to the SHA, without the prior written consent
of Resilient and Centrum. That the subject matter of Agenda Item 18
is a “Reserved Matter” is apparent, as it directly attracts clause (f) in
the list of Reserved Matters as enumerated in Schedule 2 to the SHA.
The fact that Agenda Item 18 involves a “Reserved Matter”, and
required the prior written consent of Resilient is also expressly
acknowledged, in writing, in Agenda Item 18 itself, as well as in
various communications addressed by Unity to Resilient, expressly
seeking such consent. Unity is clearly aware of this position, which is
why it seeks to wish away these communications by referring to them
as having been issued in “inadvertent error”. That, quite clearly, is
merely an argument of desperation, and nothing more.
109. In, therefore, interdicting the tabling of Agenda Item 18, absent
any written consent from Resilient therefor, the learned Single Judge
has merely conformed to the rigour of Clause 8 of the SHA, which
Unity, unsuccessfully, has tried to escape.
110. Other aspects argued by Unity, though addressed by us
hereinabove, are actually tangential to the issue at hand.
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J. Conclusion
111. We, therefore, find no cause to interfere with the impugned
judgment of the learned Single Judge.
112. The appeal is dismissed.
C. HARI SHANKAR, J.
VINOD KUMAR, J.
November 05, 2026
/
dsn AR
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