Resilient Innovations Private Limited vs Unity Small Finance Bank And Ors
- Court
- Delhi High Court
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Order reserved on: 23.07.2026
Order delivered on: 24.07.2026
+ O.M.P.(I) (COMM.) 293/2026, I.A. 19139/2026 & I.A. 19140/2026
RESILIENT INNOVATIONS PRIVATE LIMITED .....Petitioner
versus
UNITY SMALL FINANCE BANK AND ORS .....Respondents
Advocates who appeared in this case:
For the Petitioner : Dr. Abhishek Manu Singhvi and Mr. Amit Sibal,
Senior Advocates with Mr. Mohit Goel, Mr.
Sidhant Goel, Mr. Anuj Berry, Mr. Suradhish
Vats, Ms. Aishna Jain, Mr. Shashwat Mukherjee
and Mr. Ishaan Pratap Singh, Advocates.
For the Respondents : Mr. Sandeep Sethi, Senior Advocate with Mr.
Sanjay Gupta, Mr. Ateev Mathur, Ms. Jagriti
Ahuja and Mr. Amol Sharma, Advocates for R-1
and 2.
Mr. Rajshekhar Rao, Senior Advocate with Mr.
Sanjay Gupta, Mr. Ateev Mathur, Ms. Jagriti
Ahuja and Mr. Amol Sharma, Advocates for R-3.
CORAM:
HON’BLE MR. JUSTICE TUSHAR RAO GEDELA
O R D E R
TUSHAR RAO GEDELA, J.
1. The present petition under Section 9 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as “the Act” ) has been filed
by the petitioner seeking following prayers:-
“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
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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
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.”
BRIEF FACTS:-
2. The petitioner, Resilient Innovations Private Limited, claims to be a
company incorporated under the Companies Act, 2013, having its
registered office in New Delhi. The petitioner is stated to operate a
successful fintech business under the trade name “BharatPe”.
3. It is stated that the respondent no.1, Unity Small Finance Bank
Limited is a small finance bank, established in 2021, incorporated under the
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Companies Act, 2013, having its registered at New Delhi, India, and its
corporate office at Mumbai. It is stated that respondent no.1 is a contracting
party to the Shareholders Agreement (hereinafter referred to as “ SHA ”) and
that it was founded, and is promoted by respondent no.2, namely, Centrum
Financial Services Limited, which owns 51% of respondent no.1.
4. The respondent no.3, namely, JBCG Advisory Services Private
Limited, is stated to be a part of the promoter group of respondent no.2. It
is further stated that certain Warrants of respondent no.1 have been
transferred to respondent no.3 by respondent no.2, in one or more tranches,
and that respondent no.3 has executed a Deed of Undertaking dated
28.10.2022, in terms of Clause 12.4 of the SHA, through which it is bound
by the SHA.
5. It is therefore stated that respondent no.1 is a company in which the
petitioner and respondent no.2 hold 49% and 51% shareholding
respectively, since November 2021. The petitioner has invested
approximately Rs.746 Crores into respondent no.1 to acquire a 49%
shareholding therein. It is stated that respondent no.1, in breach of Clauses
6.11(d) and 8 read with Schedule 2 of the SHA, has decided to include
Agenda item no.18 for consideration by the Board, seeking to increase the
Authorized Share Capital and amend Clause V of the Memorandum of
Association (hereinafter referred to as “ MoA ”), which is extracted
hereunder:
“ 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
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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, p ivilege or condition or restriction in such
r
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.
”
6. The petitioner, by its letter dated 20.07.2026, is stated to have called
upon respondent no.1 to withdraw the impugned Agenda item no.18 from
the upcoming Board meeting on the ground that it was contrary to and in
breach of the SHA. It is stated that despite receipt of the said letter,
respondent no.1 has neither responded thereto nor provided any indication
that the impugned Agenda item no.18 would be withdrawn. In these
circumstances, it is stated by the petitioner that there exists a real and
imminent apprehension that respondent no.1 will proceed to place the
impugned Agenda item no.18 before the Board, and procure its approval in
breach of Clauses 6.11(d) and 8 read with Schedule 2 of the SHA.
7. It is stated that in view of the above circumstances, the petitioner is
constrained to seek urgent intervention and ad-interim reliefs from this
Court. It is further stated by the petitioner that Clause 17 of the SHA,
provides that the arbitration shall be conducted in accordance with the
provisions of the Act, and the seat and place of the arbitration shall be New
Delhi, hence, the present petition.
CONTENTIONS OF THE PETITIONER:-
8. After alluding to the brief facts of the case, Mr. Abhishek Manu
Singhvi and Mr. Amit Sibal, learned senior counsel for the petitioner
submit as under:-
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8.1. Learned senior counsel submitted that it is undisputed that the
petitioner had invested a sum of Rs.746 Crores into the respondent
no.1 and the ratio of shareholding between the petitioner and
respondent no.2 is 49:51. They would contend that the controversy
which has arisen in the present petition is in respect of breach of the
provisions under Clauses 6.11(d) and 8 of the SHA and Schedule 2 to
the said SHA which was executed on 26.10.2021.
8.2. While referring to Clause 1.1 of the SHA learned senior
counsel would submit that the definition of word ‘Securities’ was
what is ascribed to it under the Companies Act, 2013 and also
includes shares and warrants. Similarly, the word ‘Warrant’ would
mean warrants issued by the company in accordance with the
provisions of this agreement and the applicable law.
8.3. Inviting attention of this Court to Clause 6.11(d) of the SHA,
it was stated that those matters which were covered under the
definition of ‘Reserved Matters’ were proscribed from being taken up
for discussion or approval by the Board without the prior written
consent from petitioner and respondent no.2 in terms of Clause 8 of
the SHA. Clause 8 of the SHA was referred to demonstrate that the
Board is precluded from taking any decision or action in respect of the
‘Reserved Matters’ unless such action or decision has been approved
by way of an affirmative vote or prior written consent by at least one
representative from each of respondent no.2 and the petitioner. Thus,
it was emphasized that unless and until the petitioner consented in
writing for any issue which would fall within the ambit of ‘Reserved
Matter’, no such issue could even be put up in the impugned Agenda
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for it to be tabled before the Board for discussion of any nature
whatsoever.
8.4. As to what would be the nature of Reserved Matters, learned
senior counsel invited the attention of this Court to Schedule 2 of the
SHA which enumerates seven Reserved Matters. According to learned
senior counsel, the relevant Reserved Matter for the present case is
contained in para (a) and para (f) of Schedule 2 to the SHA. Learned
senior counsel contended that the impugned Agenda item no.18 in the
opening paragraph itself and in other paragraphs clearly indicates that
what was being sought to be discussed and placed for approving, was
the proposed resolution seeking amendments to the MoA and of
Articles of Association (hereinafter referred to as “ AoA ”) which,
according to him, would affect the rights of the shareholders. It was
further contended that para (f) of the Reserved Matters was in relation
to any change in the capital structure, including through the issue of
new issue of shares or securities etc., which too would be an
excepted/Reserved Matter.
8.5. In order to demonstrate that the respondents were conscious of
the aforesaid Clauses of the SHA, including Clause 8 and Schedule 2
of the SHA in respect of the proscription regarding Reserved Matters,
learned senior counsel referred to various letters/e-mails issued by the
respondent no.2 to the petitioner. In that, the respondent no.2 vide e-
mail/letters dated 23.10.2025, 01.05.2026 and 08.07.2026, admittedly
sought express written consent of the petitioner to include the issue
which is challenged by the petitioner in Agenda item no.18 in the
meeting of Board. It was forcefully contended that to each of the
aforesaid letters, the petitioner in express written terms had refused to
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give consent for such an issue to be placed in the Agenda for
consideration of the Board.
8.6. Learned senior counsel would also state that it is rather strange
that despite the petitioner clearly refusing consent in written at least
three times in the recent past, no mention thereof is present in the
Agenda item no.18, which is impugned herein. In fact, according to
learned senior counsel, it is admitted in the impugned Agenda item
no.18 itself that the consideration and approval of increase in
Authorized Share Capital of the bank would require amendment in
Clause V of the MoA. If that is so, as per learned senior counsel, the
same would fall within the definition of ‘Reserved Matters’ for which
express written consent of the petitioner is mandatory in the absence
whereof, no such Reserved Matter can even be tabled before the
Board.
8.7. Reading further the impugned Agenda item no.18, learned
senior counsel would submit that yet again the respondent has
admitted, that too in bold print that as per the SHA, if any amendment
to MoA/AoA or change in its capital structure is proposed, the same
would be a Reserved Matter and, therefore, approval of both
respondent no.2 and the petitioner was being sought. According to
learned senior counsel, a bare reading of the proposed resolution itself
indicates that not only the MoA/AoA has to be amended but an
approval is also sought for increasing the Authorized Share Capital,
both of which would fall within the Reserved Matters as per para (a)
and (f) of Schedule 2 of SHA.
8.8. Learned senior counsel would contend that if the consent of
the petitioner was not mandated, there would have been no
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requirement for the respondent no.2 to issue three communications, as
noted above, seeking written consent from the petitioner.
8.9. Another relevant contention raised by the petitioner is in
respect of the apprehension that if the proposed resolution is passed, it
will have a severe financial impact upon the petitioner inasmuch as
the share of the petitioner which is at 49% as on date, would fall
immediately to 21%. According to learned senior counsel, this appears
to be a devious ploy employed by the respondents in order to
substantially decrease the shareholding of the petitioner in respondent
no.1.
8.10. It was contended that if the Warrants-Series 1 are not acted
upon in the manner proposed under the impugned Agenda item no.18,
it would neither violate any statutory provision nor any regulation of
the Reserve Bank of India (hereinafter referred to as “ RBI ”). In any
case, it is submitted that the Warrant - Series 1 are to expire only in
the month of October, 2026, and consequently there is no urgency or
pressing emergency to pass any such resolution as proposed in the
impugned Agenda item no.18 requiring immediate consideration.
8.11. Drawing attention to Annexure-A - Terms and Conditions of
Warrants Series-1, learned senior counsel would emphatically contend
that the opening para itself clearly specified the terms and conditions
of the SHA would prevail over those contained in the terms of
Warrants Series-1, in case of any conflict. Meaning thereby, that
Clauses 6.11(d), Clause 8 and Schedule 2 to the SHA would prevail
over any of the terms and conditions contained in Annexure-A Terms
and Conditions of Warrants - Series 1. Moreover, Clause 3 of the SHA
respecting transfers of Warrants clearly specified that such transfers
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were subject to both the AoA and SHA. Also, Clause 4.2(b) of the
SHA too stipulated the similar condition.
8.12. Learned senior counsel would thus contend that so far as
interim orders under Section 9 of the Act as sought by the petitioner is
concerned, the aforesaid facts would cumulatively establish prima
facie strong case in favour of the petitioner for grant of prayer (a) of
the petition.
CONTENTIONS OF RESPONDENT NO.1:-
9. Mr. Sandeep Sethi, learned senior counsel appears for respondent
no.1 and 2 and vehemently refuted the submissions made on behalf of the
petitioner. He submits as under and made the following submissions:
9.1. At the outset, Mr. Sethi, learned senior counsel categorically
submitted that the issuance of warrants and conversion of the same to
fully paid Compulsorily Convertible Preference Share (hereinafter
referred to as “ CCPS ”) is not a Reserved matter falling within Clause
8 or Schedule 2 of the SHA. He would submit that the Warrant -
Series 1 had already been duly approved and issued and it is only
conversion/issuance of CCPS which is being tabled and decided by
way of a resolution in the impugned Agenda item no.18 by the Board.
The question according to Mr. Sethi is to increase the share value of
such warrants.
9.2. Referring to the impugned Agenda item no.18, learned senior
counsel would contend that the 90 Crore warrants, which have already
been issued in the year 2021 are due for conversion into CCPS by
31.10.2026 for which the respondent no.1 would need adequate
Authorised Share Capital to issue the requisite number of CCPS.
Learned senior counsel would also contend that it is proposed to
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increase the Authorised Share Capital from Rs.4000 Crores to
Rs.4900 Crores, for which purpose a consequential amendment in the
existing capital Clause V of MoA would be required. He states that
having regard to the fact that the warrants were issued way back in the
year 2021 and are due for conversion by 31.10.2026 the proposed
resolution is necessary to be considered and passed by the Board.
9.3. In support of the aforesaid submissions, learned senior counsel
invited attention to Clause 4.2 of Annexure-A Terms and Conditions
of Warrants - Series 1 to submit that the time period for conversion of
the Warrant - Series 1 to CCPS as per the said Clause is 60 months
from the date of the allotment, failing which the said Warrant - Series
would lapse and any amount paid towards them would stand forfeited
by the company. In order to allay the fear of petitioner, learned senior
counsel would submit that conversion of Warrant - Series 1 to CCPS
would not confer any voting rights to such holders of CCPS. In the
same context, learned senior counsel also pointed out to Clause 4.4 (g)
of Annexure-A Terms and Conditions of Warrants - Series 1 to submit
that the said Clause specifies that the CCPS holder would not be
entitled to any voting rights.
9.4. Contrary to the submission of the petitioner that the resolution
said to be passed in respect of Clause V of the MoA would fall within
the purview of ‘Reserved Matter’, learned senior counsel invited
attention to Clause 5 of the SHA respecting “Initial Capital
Contribution and Additional Fund Raising”, particularly Clause 5.1 (a)
& (b) of the SHA. According to learned senior counsel, the action
sought to be undertaken falls within the purview of Clause 5.1 of the
SHA and thus, does not fall within the ‘Reserved matters’ under
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Schedule 2 of the SHA. The distinction is sought to be demonstrated
by learned senior counsel by referring to Clause 5.2 of the SHA
which, in contradistinction to Clause 5.1(a) & (b) of the SHA
specifically refers to the additional capital being subject to Clause 8 of
the SHA which refers to ‘Reserved Matters’. Thus, learned senior
counsel would forcefully contend that the action proposed under the
proposed resolution purely falls within the realm of Clause 5.1(a) &
(b) of the SHA wherein there is no proscription of it being a Reserved
Matter. Accordingly, learned senior counsel would submit that the
contention of the petitioner on this score is a bogey and ought to be
rejected.
9.5. Learned senior counsel further clarified the aforesaid
submission that Clause 5.1(a) of the SHA is in respect of Equity Share
while Clause 5.1(b) of the SHA is in respect of further capital to be
raised by the company which would fall within the definition of
“Initial Investment”. Such matters, as per the said Clause of the SHA
are not Reserved Matters and it is only the additional capital beyond
the initial investment that would be subject to Clause 8 (Reserved
Matters) of SHA. Thus, there is no question of the actions proposed to
be undertaken by virtue of the proposed resolution being prohibited by
Clauses 6.11(d), Clause 8 or Schedule 2 to the SHA.
9.6. Learned senior counsel also referred to RBI letter dated
18.06.2021 granting in-principle approval to establish a Small Finance
Bank (SFB) particularly to para 2(i)(c), to submit that the respondent
no.1 is obliged to dilute the promoters initial shareholding to 40% or
below of paid up voting equity share capital within a period of not
more than eight years from the date of commencement of business and
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the shareholding of petitioner which is “Person Acting in Concert”
was to be brought down to 10% of paid up voting equity share capital
within a maximum period of eight years. He further invited the
attention of this Court to a letter dated 12.10.2021 of the RBI granting
final approval where too, the same clauses have been repeated.
Learned senior counsel referred to para 6 of the said letter to state that
the RBI also mandated that Warrants of Rs.900 Crore shall be issued
at par to the promoter/respondent no.3 and person acting in
concert/petitioner for capital infusion within third and fifth year from
the date of commencement of the operations of the bank. According to
learned senior counsel, it is in compliance of this mandate/requirement
of the approval granted by the RBI, that the respondent had issued the
impugned Agenda item no.18.
9.7. Learned senior counsel handed over the Bench the Minutes of
the of the Extra-Ordinary General Meeting (EOGM) dated 22.10.2021
to submit that the resolution to approve issuance of Warrants was
passed as far back as in the year 2021 and it is these very Warrants
that are now being sought to be converted into CCPS. Learned senior
counsel would contend that the petitioner too was part of the EOGM
and had never objected to such resolution. He also would contend that
the said EOGM has not been challenged either in the past or in the
present petition. Thus, now to contend that conversion of Warrant -
Series 1 to CCPS would be matters covered under the ‘Reserved
Matters’ is completely false and contrary to the documents on the
record of respondent no.1. (The EOGM and Board Resolution dated
22.10.2021 are taken on record).
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9.8. Drawing reference to the letter dated 26.10.2021 particularly
to para 3, Learned senior counsel would contend that the petitioner
was fully aware that the Warrants which were issued earlier have also
been transferred to as many as 181 individuals who are third parties.
Handing over the list of 181 entities including individuals, learned
senior counsel would contend that even these transfers have not been
challenged nor have these persons/entities arrayed as party-respondent
to the present petition the list of ‘Details of Warrant Holders as on
June 30, 2026’, handed over to the Bench are taken on record.
9.9. Learned senior counsel would contend that in any case the
proposed resolution causes no prejudice to the petitioner by because
the respondent no.2 is transferring a part of its 51% shares. Moreover,
learned senior counsel submitted that even if the resolution is passed
by the Board in its meeting to be held on 25.07.2026, it will take
almost 90 days to get the necessary approvals from RBI. If that be so,
learned senior counsel would contend that there is no urgency as
falsely portrayed by the petitioner requiring this Court to pass any
interim order restraining the meeting of the Board on 25.07.2026.
9.10. Handing over a letter dated 10.06.2024 purported to be a
‘Mutual Waiver Letter’ executed between the petitioner and
respondent no.2, learned senior counsel would contend that in terms of
para 4 of the said letter neither of the parties were required to obtain
consent before proceeding with the third party transfers and had
mutually waived the rights and obligations to follow the requirements
under Clause 12.1 and 12.4 of the SHA in connection with the third
party transfer. According to learned senior counsel, this letter clearly
pointed out to the fact that the petitioner is well aware of the issuance
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of Warrant-Series 1 and the legal requirements and obligations of their
conversion into CCPS within 60 months as stipulated in Annexure-A
Terms and Conditions of Warrants - Series 1. Thus, the submission
that these are Reserved Matters is a bogey requiring rejection.
9.11. In sum and substance, learned senior counsel would contend
that (i) the petitioner wants to block an issue which was consented to;
(ii) Warrants fall within the scope of initial investment under Clause
5.1 (a)&(b) of the SHA and thus would not constitute “Reserved
Matters”; (iii) the conduct of the petitioner is barred by doctrine of
estoppel and acquiescence; (iv) petitioner has consented and acted
upon the aforesaid issues as far back as in the year 2021, therefore,
barred by doctrine of laches; (v) a large number of transferees have
not been made parties whose interests are at stake; (vi) having regard
to the above, the prayer for restraining the Board from meeting on
25.07.2026 would not be in public interest; (vii) the non compliance
of obligations under the RBI letter dated 12.10.2021 granting approval
would result in penalties under Section 47A and Section 22 of the
Banking Regulation Act, 1949.
9.12. Learned senior counsel reiterated and reaffirmed that the
conversion of Warrant-Series 1 into CCPS would not impact
petitioner’s shareholdings of 49% as the CCPS holder possesses no
voting rights. Thus, in view of the aforesaid submissions and
contentions, learned senior counsel would pray that the present
petition be dismissed and/or in the alternative respondent be permitted
to file their reply and no ad-interim injunction be passed in the
meantime.
CONTENTIONS ON BEHALF OF RESPONDENT NO.3:-
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10. Mr. Rajshekhar Rao, learned senior counsel, appearing for
respondent no.3 adopts the arguments addressed by Mr. Sandeep Sethi,
learned senior counsel. In addition to the arguments addressed by Mr.
Sandeep Sethi, Mr. Rajshekhar Rao would submit as under:
10.1. Mr. Rao, learned senior counsel would submit that respondent
no.3 forms part of the promoter group entity of respondent no.2 and is
also the warrant holder being the transferee of certain Warrant - Series
1. At the outset and as a preliminary objection, learned senior counsel
would submit that while respondent no.3 has been arrayed as a party
respondent, the petitioner has not arrayed other transferees as party to
the present petition whose interest would be adversely impacted in
case of any orders passed by this Court and as such, the petition
suffers from non-joinder of necessary parties.
10.2. Referring to the Deed of Undertaking dated 28.10.2022,
learned senior counsel stated that the said deed is supplemental to the
SHA dated 26.10.2021 and have direct financial interest in the
proposed resolutions which are to be tabled and passed by the Board
in its meeting to be held on 25.07.2026. In that, being a warrant
holder, the conversion to CCPS is a vital right provided by the SHA as
also the Annexure-A Terms and Conditions of Warrants - Series 1
according to which, the time period specified of 60 months for such
conversion would get over by 30.10.2026. In other words, if the
Warrants - Series 1 are not converted to CCPS on or before such
stipulated date, such warrants would simply lapse and get forfeited to
the account of respondent no.1 causing enormous financial losses to
respondent no.3 and all such Warrants - Series 1 holders to the extent
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of Rs.900 crores. Thus, according to him, such proposed meeting and
proposed resolution ought not to be injuncted by this Court.
10.3. In addition and in support of the aforesaid contention, learned
senior counsel would submit that respondent no.3 being a promoter
has invested a sum of Rs.300 crores in Warrants - Series 1 which, if
not converted to CCPS or stalled for any reason whatsoever, shall
cause irreparable and irrecoverable financial loss to respondent no.3.
Referring to Clause 2.2 and Clause 3 of the Annexure-A Terms and
Conditions of Warrants - Series 1, learned senior counsel would
contend that the transfer of warrants was not only in the knowledge of
the petitioner but no objection to such transfer was ever raised or
lodged by the petitioner. He would contend that the transfer of
warrants under Clause 3.1 having already been processed to third
parties would be deemed to have been approved by the Board as
stipulated in Clause 3.1(a). He would contend that in terms of Clause
3.1(b), the warrants holders like the respondent no.3 have already
executed the deed of adherence/deed of undertaking as required under
the said Clause. He would contend that such transfers were processed
absolutely under the Depositories Act, 1996 as stipulated in Clause 3.3
of Annexure-A i.e., Terms and Conditions of Warrants - Series 1.
Referring to Clause 4.2 of Annexure-A i.e., Terms and Conditions of
Warrants - Series 1, learned senior counsel contended that the Warrant
Exercise Period stipulated therein is 60 months from the date of
allotment which is to expire on 30.10.2026, and failure to exercise
such right of conversion before the stipulated period would render the
Warrants Series-1 to lapse and cease to be valid and the amounts paid
towards such warrants would stand forfeited by respondent no.1. This
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would clearly lead to great financial losses to each of such warrant
holders of Warrants Series-1.
10.4. Reiterating the stand taken by Mr. Sandeep Sethi, learned
senior counsel referred to sub para (g) of para 4.4 of Annexure A i.e.,
Terms and Conditions of Warrants Series-1 to submit that mere
conversion of Warrants Series-1 to CCPS would not impact or cause
any prejudice to the petitioner inasmuch as such holders of CCPS are
not entitled to any voting rights whatsoever. Thus, according to
learned senior counsel, the contention that the proposed resolution in
the impugned Agenda item no.18 would severely impact the
petitioner’s interest is absolutely false and frivolous.
10.5. Learned senior counsel referred to para 26 and para 35 of the
petition to demonstrate the incongruity in the stand taken by the
petitioner. He would contend that while in para 26, the petitioner
sought to demonstrate that the petitioner had refused approval for
increase in the Authorized Share Capital since, according to it, the
approval for such increase constituted a ‘Reserved Matter’ which
requires express consent of the petitioner whereas, according to
learned senior counsel, in para 35, it is stated that the petitioner’s
terms of warrants were amended to permit their exercise at the end of
5th and 8th years from the commencement of business by respondent
no.1 and these deviations were orally communicated to RBI. Meaning
thereby, for the similar issues, the petitioner had taken contradictory
stands as to what would constitute Reserved Matters and that in so far
as issues pertaining to warrants are concerned, no such express
consent was required.
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10.6. Learned senior counsel referred to and relied upon Section
22(3) particularly sub-clauses (a), (b) and (c) of the Banking
Regulation Act, 1949, to contend that the submission of the petitioner
that there would be no penal consequences for violation of any of the
terms of the approval granted by RBI vide the approval letter dated
12.10.2021 is absolutely incorrect and contrary to the said provisions.
He would submit that the license has been issued to respondent no.1 to
conduct its banking business in India under the provisions of Section
22 of the Banking Regulation Act, 1949 and as such, any violation of
the conditions laid down in the final approval letter dated 12.10.2021
would visit the respondent no.1 with penalties proposed under Section
47A of the Banking Regulation Act, 1949. The aforesaid argument has
been put forth by the learned senior counsel only to support the
contention that the proposed action for tabling and passing the
proposed resolution under the impugned Agenda item no.18 is purely
within the four corners of the requirements of RBI’s approval as also
in tune with the SHA and the terms and Conditions of Annexure A
i.e., Terms and Conditions of Warrants Series - 1.
CONTENTIONS IN REJOINDER ON BEHALF OF PETITIONER:-
11. While reiterating and reaffirming the submissions made in the
opening arguments for the petitioner, Mr. Amit Sibal, learned senior
counsel rejoins as under:-
11.1. Referring to the three letters dated 23.10.2025, 01.05.2026 and
08.07.2026, learned senior counsel would contend that once the
respondent themselves have admitted that the issue in impugned
Agenda item no.18 is a reserved matter requiring written consent of
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the petitioner, the respondents are estopped from submitting to the
contrary.
11.2. Learned senior counsel contends that the respondents have
conflated the issue about compliances necessary to be completed by
respondent no.1 in terms of the RBI approval with the issue in the
impugned Agenda item no.18. He would contend that the issue of
warrants and the consent of the petitioner in respect of such warrants
which were approved in the year 2021 is not a consent which is
required for amendment of the MOA or the capital structure of
respondent no.1. Thus, these are two different issues which are not
interrelated.
11.3. So far as the emphasis laid by the respondent to Clause V of
the Annexure to the In-principle Approval Letter of RBI dated
18.06.2021 is concerned, learned senior counsel would contend that
no letter or any communication in regard to the compliance or non-
compliance of any of the conditions stipulated in the said letter has at
all been issued by the RBI nor has any such document been shown to
this Court. In any case, learned senior counsel would contend that the
SHA was executed and entered into after the approval was granted by
the RBI. Furthermore, he would contend that all the documents
including the SHA are already furnished to the RBI.
11.4. He vociferously contended that warrants by themselves are
securities as defined in the SHA and hence any increase or change in
the share capital would also fall within “reserved matters”. Thus, no
such matter can be tabled, deliberated or discussed or approved by the
Board unless a written consent is obtained by the respondents from the
petitioner.
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11.5. He vehemently contended that CCPS is treated as equity share
capital and thus the moment Rs.900 Crores of additional equity capital
is converted to CCPS, the shareholding of the petitioner would be
diluted from 49% to 21% which will be in direct contravention of the
SHA and would result in increasing the shareholding of respondent
nos.2 and 3. He would also contend that though the respondents assure
that the voting rights of the petitioner will not be affected, however,
insists that the shareholding of the petitioner would definitely
plummet drastically to 21% reducing the stakes of the petitioner in
respondent no.1 to its detriment. According to learned senior counsel,
it is clear that the respondent nos.2 and 3 appear to be moving towards
the aforesaid reduction in the shareholding of the petitioner.
ANALYSIS AND CONCLUSION:-
12. It must be borne in mind that the present petition is one under section
9 of the Act and thus the Court at this stage, where the petitioner is seeking
ad-interim injunction, is only required to assess whether the conditions for
a prima facie case are made out or not. The Court is neither bound nor
expected to delve deep into facts of the case which may be ascertained once
the reply is filed by the respondents.
13. Before adverting and alluding to the facts submitted by both the
parties, it would be appropriate to cull out and bear in mind the definitions
of core words coupled with the Clauses of the SHA and other related
documents. It may also be relevant to consider the definitions of certain
core words defined in Section 2(8) Companies Act, 2013, as “ “authorised
capital” or “nominal capital” means such capital as is authorised by the
memorandum of a company to be the maximum amount of share capital of
the company ”. Such relevant aspects are extracted hereunder:
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By:YASHRAJ
Signing Date:24.07.2026
20:56:35
“ DATED OCTOBER 26, 2021
SHAREHOLDERS'AGREEMENT
AMONGST
CENTRUM FINANCIAL SERVICES LIMITED
AND
RESILIENT INNOVATIONS PRIVATE LIMITED
AND
UNITY SMALL FINANCE BANK LIMITED
xxxx xxxx xxxx
6.11 Quorum:
(a) xxx xxx
(b) xxx xxx
(c) xxx xxx
(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).
xxxx xxxx xxxx
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.
xxxx xxxx xxxx
SCHEDULE 2
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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, profit sharing arrangement
and/or exclusive supply/ distribution arrangements (other than in the
Ordinary Course of Business);
(c) Any acquisition or purchase of any undertaking, businesses,
companies, body corporates, 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 .”
……………………………………………………………………………..
“ Annexure A
Terms and Conditions of Warrants – Series 1
Issue of up to 90,05,50,000 (ninety crores, five lakhs and fifty thousand
only) Warrants – Series 1, on rights basis, under the provisions of Section
62(1)(a) of the Companies Act, 2013 read with rules issued thereunder was
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authorized pursuant to resolutions of the Board of Directors dated October
22, 2021. The Warrants – Series 1 are to be issued at the Warrant Issue
Price i.e. at a price of Re. 0.01 (one paisa) per Warrant – Series 1 (fully
paid –up). Terms used herein, and not defined, shall have the same meaning
as set out in the Shareholders’ Agreement (as defined below). In the event of
any conflict between the terms of the Warrants – Series 1 and the
Shareholders Agreement, the Shareholders Agreement shall prevail. The
following are the terms and conditions of the Warrants – Series 1 (the
“ Warrant Conditions ”) applicable to the Warrants – Series 1:
1. Status
The Warrants – Series 1 constitute contractual obligations of the
Company in terms of the Warrant Conditions.
2. Form, Denomination
2.1 Form
(a) The allotment of Warrants – Series 1 shall only be in
dematerialized form (i.e., not in the form of physical
certificates, but be fungible and be represented by the
statement issued through the electronic mode). The
Company has made depository arrangements with National
Securities Depository Limited (“ NSDL ”) and Central
Depository Services (India) Limited (“ CDSL ”, and
together with NSDL, the “ Depositories ”) for the issue of
Warrants – Series 1 in dematerialised form. The Series 1
Warrant Holders will hold the Warrants – Series 1 in
dematerialised form and deal with the same in accordance
with the provisions of the Depositories Act, 1996 and the
rules as notified by the Depositories from time to time.
(b) The Warrants – Series 1 are subject to the rules,
regulations, directions and notifications of the Reserve
Bank of India (“ RBI ”); provisions of the Companies Act,
2013 and the rules thereunder; the memorandum of
association and articles of association of the Company;
and to the extent applicable, provisions of the regulations
of Securities and Exchange Board of India (“ SEBI ”). In
addition, the Warrant – Series 1 shall also be subject to
applicable laws, guidelines, notifications and regulations
issued from time to time by the Government of India, SEBI,
RBI and/or other authorities.
2.2 Denomination
Each Warrant – Series 1 is exchangeable for 1 (one) Compulsorily
Convertible Preference Share only at the Warrant Exercise Price.
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3 Transfers of Warrants
3.1 Transfer of Warrants.
(a) Transfer of Warrants may be effected after seeking prior
approval by the Board of Directors or any Committee of the
Board, subject to Articles of Association and Shareholders
Agreement.
(b) In addition to the terms of the Warrant – Series 1, Series 1
Warrant Holders will need to comply with the terms of the
shareholders agreement proposed to be executed by two
founding shareholders (CFSL and RIPL) (hereinafter defined as
(“ Shareholders Agreement ”)). The Series 1 Warrant Holders
(including any person subsequently acquiring the Warrant –
Series 1) shall execute such deed of adherence and/ or deed of
undertaking as may be required by the Company in accordance
with the provisions of the Shareholders Agreement.
(c) Warrants will be subject to the Shareholders Agreement in
force at the time of proposed transfer of Warrants.
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.
3. 3 Transfers of Warrant – Series 1 shall be effected only through the
Depository(ies) through which such Warrant – Series 1 to be
transferred are held, in accordance with the provisions of the
Depositories Act, 1996, rules as notified by the Depositories from
time to time and other Applicable Law.
3.4 Title
(a) The person for the time being appearing in the register of
beneficial owners of a Depository will have the title as the
Series 1 Warrant Holder, and shall be treated so for all
purposes by the Company, the Depositories and all other
persons dealing with such person as the holder thereof and
as its absolute owner for all purposes (whether or not it is
overdue) and regardless of any notice of ownership, trust
or any interest in it. In these Warrant Conditions, “ Series 1
Warrant Holder ” means the person in whose name a
Warrant – Series 1 is registered.
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(b) The Company shall maintain at its Registered Office (or
such other place as permitted by law) a register of warrant
holders (the “ Register of Warrant holders ”). The Register
of Warrant holders maintained by a Depository for
Warrant – Series 1 in dematerialised form shall be deemed
to be a Register of Warrant holders for the purposes of this
Warrant Condition 3.4(b).
(c) Title to the Warrant – Series 1 shall pass only by transfer
and registration as described in Warrant Condition.
4 Exercise Right, Warrant Exercise Period and Warrant Exercise
Price
4.1 Exercise Right
(a) The Series 1 Warrant Holder shall have a right to exchange
1 (one) Warrant – Series 1 for 1 (one) fully paid
Compulsorily Convertible Preference Share, at the Warrant
Exercise Price, on the terms and conditions of Warrant –
Series 1 (the “ Exercise Right ”).
(b) The Exercise Right shall be available to all Warrant Holder
on date of the call for exercise.
(c) At the time of exercise of the Exercise Right by the Series 1
Warrant Holder, it is essential that the Warrant Exercise
Price to the extent specified is paid and accompanied by a
written notice from the Series 1 Warrant Holder expressly
requesting issue of the Compulsorily Convertible
Preference Shares against surrender of the Warrant –
Series 1, as per the terms of Warrants.(d) Upon exercise
of Exercise Rights in relation to any Warrant – Series 1 and
the fulfillment by the Company of all its obligations in
respect thereof, the relevant Series 1 Warrant Holder shall
have no further rights in respect of such Warrant – Series 1
and the obligations of the Company in respect of the
Warrant – Series 1 shall be extinguished.
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”).
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(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.
4.3 Warrant Exercise Price
Rs. 10 (Rupees Ten) per Warrant – Series 1.
Each Warrant – Series 1, when exercised, shall entitle the Series 1
Warrant Holder to subscribe for a fully-paid up Compulsorily
Convertible Preference Share of Face value Rs. 10 (Rupees Ten)
(“ Warrant Exercise Price ”).
4.4 Issue of Compulsorily Convertible Preference Shares
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:
(a) The face value of each Compulsorily Convertible
Preference Share shall be Rs. 10 (Rupees Ten). However,
the Compulsorily Convertible Preference Shares shall not
carry any coupon.
(b) Each Compulsorily Convertible Preference Share shall
convert into 1 Equity Share, having the face value of Rs. 10,
upon the earlier of (i) occurrence of an initial public
offering of the Equity Shares of the Company; (ii) expiry of
8 (eight) years from the date of commencement of business
by the Company; (iii) before the equity share capital and
share premium of the Company, on a fully diluted basis,
excluding any warrants that may be issued as part of the
Depositors Settlement Plan of PMC Bank, exceeds INR
3,005 crore.
(c) The Equity Shares issued upon conversion of the
Compulsorily Convertible Preference Shares shall be
issued in accordance with the provisions of Applicable
Laws and upon due surrender of the dematerialised shares
held by the holder of Compulsorily Convertible Preference
Shares to the Company.
(d) The Equity Share issued as above shall rank pari passu in
all respects with the then existing ordinary Equity Shares of
the Company and shall carry such rights and be subject to
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such terms and conditions as may be applicable to the then
existing Equity Shares of the Company.
(e) Each Compulsorily Convertible Preference Share shall be
issued in dematerialised form. Transfers of Compulsorily
Convertible Preference Shares shall be effected only
through the Depository(ies) through which such
Compulsorily Convertible Preference Shares to be
transferred are held, in accordance with the provisions of
the Depositories Act, 1996, rules as notified by the
Depositories from time to time and other Applicable Law.
(f) Securities as defined under the Shareholders’ Agreement
shall include the Compulsorily Convertible Preference
Shares issued in exchange for the Warrants – Series 1.
Accordingly, the Compulsorily Convertible Preference
Shares shall be transferable, subject to the terms of the
Shareholders Agreement and Articles of Association. The
holder of Compulsorily Convertible Preference Shares
shall adhere to the terms of the Shareholders’ Agreement
and shall execute a Deed of Adherence or Deed of
Undertaking, as required by the Company, to this effect
subject to and in accordance with the provisions of the
Shareholders’ Agreement.
(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.
5 Representations and Warranties of Series 1 Warrant Holders
Each Series 1 Warrant Holder shall represent and warrant to the
Company at all times it holds Warrants Series – 1 that:
(a) it is a validly and legally existing entity and is duly
incorporated under the laws of the country of its
incorporation and has all necessary corporate power,
authority and capacity to carry on its business;
(b) it has the legal right and full power and authority and has
taken all necessary corporate actions to subscribe to the
Warrant – Series 1;
(c) it has complied with the applicable Laws with respect to its
investment in the Company and is eligible to hold Securities
of the Company and that it has obtained the necessary
Consents required in relation thereto;
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(d) all investments in the Company shall:
(i) be made from genuine, bona fide and verifiable
sources
(ii) made in a transparent and authorized manner;
(iii) in accordance with the provisions of Applicable
Laws; and
(iv) not attract domestic and international legal
prohibitions against money laundering and related
offences as applicable.
(e) the subscription of the Warrant – Series 1 on terms and
conditions as set out herein shall be in compliance with the
law applicable to it and all necessary filings/ approvals in
this regard have been made and, to the extent necessary,
shall be made from time to time by it.
(f) the subscription of Warrants – Series 1 by it will not result
in a breach of, entitle a third party to exercise any right
under, relieve a third party from any liability or obligation
under, or give rise to or increase any of its liability or
obligation under any: (i) agreement or other document
(including its own memorandum of association and articles
of association), the benefit of which it is entitled to or by
which it is bound; (ii) Consents and approvals required to
enable it to carry on its business as it is presently carried
on; (iii) underlying order, decree, judgment, award or
decision of any court, tribunal, arbitrator, mediator or
Governmental Authority or other competent authority or
agency to which it is entitled or by which it is bound;
(g) there is no litigation, pending or, threatened against it,
preventing it from subscribing to the Warrants – Series 1 or
performing its obligations hereunder; and
(h) the information submitted by the Series 1 Warrant Holders
to the Company in relation to its business activities, and its
technical and financial capabilities is true, correct and
accurate and not misleading in all material respects.
6 Rights of Series 1 Warrant Holders
6.1 The Holders shall have no other rights or privileges except as
expressly provided in these Warrant Conditions.
6.2 The Warrants – Series 1 by itself does not provide to the Holder
any right of shareholders of the Company, including voting right.
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6.3 On exercise of the Warrants – Series 1 and subsequent allotment of
Compulsorily Convertible Preference Shares, the Holders shall
enjoy the rights and privileges of Compulsorily Convertible
Preference Shareholders and not of Holder of Warrants – Series 1.
6.4 The Holders shall not be entitled to any dividend or any other
corporate benefits, which may be declared or announced by the
Company from time to time, until such time that the Warrants –
Series 1 and/ or CCPS are exchanged for the Equity Shares and
the Equity Shares so allotted, in accordance with these Warrant
Conditions.
7 Miscellaneous
7.1 Fractional Entitlement
In case of any fractional entitlement arising out of issue or
conversion of the Warrant – Series 1, the Board will make suitable
arrangements to deal with such fractions and the decision of the
Board shall be final and binding on all shareholders and warrant
holders.
7.2 Governing law and jurisdiction
The Warrants – Series 1 are governed by, and shall be construed
in accordance with, the laws of India and any dispute arising out
of or in connection with the Warrants – Series 1 shall be subject to
the exclusive jurisdiction of courts at New Delhi.
7.3 Amendment
Any amendment or modification of these terms of issue of Warrants
– Series 1 shall be subject to the approval of the Board and require
consent of 51% (fifty one percent) of the Warrant – Series 1
Holders.
7.4 Severability
If any provision of these Warrant Conditions are determined to be
invalid or unenforceable in whole or in part, such invalidity or
unenforceability shall attach only to such provisions or the
applicable part of such of such provisions and the remaining part
of such provision and all other provisions of these Warrant
Conditions shall continue to remain in full force and effect.”
14. The overall and purposive interpretation of the aforesaid definitions
and clauses of the SHA coupled with the terms and conditions specified in
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Signing Date:24.07.2026
20:56:35
Annexure A i.e., Terms and Conditions of Warrants Series-1 impel this
Court to prima facie form the following opinion:
14.1. The Warrants Series-1 issued by respondent no.1 clearly fall
within the definition of the word “Securities”. “Warrants” itself mean
warrant issued by the respondent no.1 from time to time in accordance
with the provisions of SHA and the applicable law.
14.2. “Reserved Matters” have been defined as matters listed in
Schedule 2 of the SHA. Schedule 2 of the SHA, particularly, paras (a)
and (f) appear to be germane to the issue at hand. The said paragraphs
clearly postulate that any amendments to the MoA or the AoA which
might affect the right of the shareholders; and any change in the
capital structure of respondent no.1, including through new issue of
shares or securities, buy back, reduction in share capital, rights issue
etc., or any amendment of rights, concessions, terms or restrictions
relating to a security of respondent no.1, would cumulatively fall
within the domain of “ Reserved Matters” .
14.3. Clause 6.11(d) of SHA manifestly delineates that parties were
ad idem that no Reserved Matter shall, in any event, be taken up for
discussion or approval by the Board without a written consent from
both, the petitioner and respondent no.2. There is a clear reference to
Clause 8 of the SHA which specifically governs ‘Reserved Matters’.
Clause 6.11(d) of the SHA brooks no ambiguity as to the intention of
the parties that no issue pertaining to the Reserved Matters would be
taken up for discussion or approval unless it is preceded by a written
consent of both the parties. The word “and” employed between
“Centrum” and “RIPL” makes the clause mandatory for both parties to
give their respective consent in writing. It can therefore be safely
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20:56:35
presumed that consent of one of the parties would not be enough to
overcome the stipulation in Clause 6.11(d) of SHA.
14.4. Clause 8 of the SHA commences with the words
“ notwithstanding ” implying thereby that the said clause is non
obstante . Pithily put, it would override the remaining clauses of the
SHA. Respondent no.1 is completely proscribed from taking any
decision or action in respect of ‘Reserved Matters’ unless such action
or decision has been approved (by way of an affirmative vote or prior
written consent) by at least one representative from each of respondent
no.2 and the petitioner. It is made more clear from Clause 8 of the
SHA that respondent no.1 has been provided the opportunity to, prior
to taking decision or action on any ‘Reserved Matter’ or any action
connected with it, send a written communication with all the relevant
materials to respondent no.2 and the petitioner requesting their
consent and it is only and only after such consent is received that such
Reserved Matter could possibly be taken up for decision or action.
Thus, having regard to the language employed coupled with the fact
that Clause 8 is non obstante , the prohibition stipulated therein is clear
and complete. Of course, such rigours are applicable only if such an
issue falls within the purview of ‘Reserved Matters’.
[emphasis supplied]
14.5. It must be noted that the Annexure - A i.e., Terms and
Conditions of Warrants - Series 1 containing the terms and conditions
of Warrant Series-1, clearly stipulates, inter alia, that “ In the event of
any conflict between the terms of the Warrants Series-1 and the
Shareholders Agreement, the Shareholders Agreement shall prevail” .
There is no ambiguity as to the effect and impact the SHA would have
Signature Not Verified
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By:YASHRAJ
Signing Date:24.07.2026
20:56:35
over Annexure A - Terms and Conditions of Warrants - Series 1. The
aforesaid observation is reiterated, if sub-clause (c) of Clause 3.1
respecting “Transfer of Warrants”, taken into consideration. The said
sub-clause clearly stipulates that Warrants would be subject to the
SHA in force at the time of proposed transfer of Warrants. In other
words, the transfer of Warrants is subject to Clause 6.11(d), Clause 8
and Schedule 2 to the SHA. Similar are the wordings contained in
Clause 3.2 of Warrant Series-1. Thus, the net effect of the aforesaid
Clauses would, prima facie, be that the terms and conditions specified
in the SHA will override the other documents placed on record or
referred to by the respondents.
15. Having regard to the aforesaid, it would be apposite to now consider
whether the issue covered/mentioned in the impugned Agenda item no.18
are “ reserved matters” .
15.1. A perusal of the title of the impugned Agenda item no.18 as
extracted hereinabove in no uncertain terms makes it apparent that
what was to be tabled for discussion, consideration and approval of
the Board was increase in Authorized Share Capital of the Bank and
the amendment in Clause V of the MoA and to seek prior approval
from RBI in that regard. There is no dispute as to the reason for which
the proposed resolution under impugned Agenda item no.18 was
mooted.
15.2. After having alluded to the background as to why the proposed
resolution was required to be considered and approved, the Agenda
claims that respondent no.1 was required to increase its Authorised
Share Capital to enable further issuance of CCPS as well as equity
share. Consequent upon the discussion, it was noted that the proposed
Signature Not Verified
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Digitally Signed
By:YASHRAJ
Signing Date:24.07.2026
20:56:35
increase in Authorised Share Capital would require consequential
amendment to the existing Capital Clause V of the MoA of respondent
no.1.
15.3. Significantly, it was also noted that as per the SHA dated
26.10.2021, any amendment to MoA/AoA or change in its capital
structure is a ‘Reserved Matter’ and that approval of both RIPL
(petitioner) and CFSL (respondent no.2) was being sought by the
respondent no.1.
15.4. It is intriguing to note that the impugned Agenda item no.18
itself admits that the amendment to MoA and/or change in the capital
structure of respondent no.1 is a Reserved Matter and yet, it is
contended on behalf of the respondents that the issues raised therein
are not Reserved Matters.
15.5. If the respondents are to be believed that the issues and the
proposed resolution covered under impugned Agenda item no.18 is in
fact not a Reserved Matter, it is bewildering to note as to why the
respondent no.1 would send three communications dated 23.10.2025,
01.05.2026 and 08.07.2026 seeking consent from the petitioner for
tabling and discussing and approval of the proposed resolution
mentioned in the impugned Agenda item no.18. The conduct of
respondent no.1 is contrary to the contentions placed before this Court
on behalf of the respondents. It is settled that documentary evidence
shall exclude oral evidence. In other words, a document containing
certain admissions cannot now be set at naught by mere oral
submissions.
15.6. It is undisputed that as against all the aforesaid three
communications dated 23.10.2025, 01.05.2026 and 08.07.2026, the
Signature Not Verified
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Digitally Signed
By:YASHRAJ
Signing Date:24.07.2026
20:56:35
petitioner had, in written, refused to grant any consent whatsoever.
Thus, it cannot be assumed that any consent was in fact obtained or
that no consent was required.
16. An argument was predicated on Clause 5.1(a) and (b) of the SHA to
submit that the action proposed to be taken post approval of the proposed
resolution covered in impugned Agenda item no.18 squarely falls within
the realm of aforesaid Clauses and not Clause 5.2 which in
contradistinction to Clause 5.1, exclusively refers to Reserved Matters.
Thus, it was contended that since there was no such reference to Reserved
Matters in Clause 5.1, the actions which could have been undertaken as per
Clause 5.1(a) and 5.1(b) did not require any prior consent or any consent at
all.
17. At the first blush, the argument appears to be attractive and
plausible. However, on a closer scrutiny, the said contention cannot be
acceded to. It is not the action which is proposed to be undertaken post the
decision on issues covered by impugned Agenda item no.18, but the very
fact that for such action to be undertaken, the amendment of the MoA/AoA
would be necessarily required to be completed before any such action can
be initiated. Thus, it appears that amendment of MoA/AoA would be
necessitated which clearly falls within the Reserved Matters requiring
written consent of both, the petitioner and respondent no.2. Therefore, the
submission is without any merit and is not accepted.
18. A lot of arguments and submissions were based on documents like
the in principle approval letter dated 18.06.2021 and final approval dated
12.10.2021 issued by the RBI, to contend that the action proposed to be
undertaken post the approval of the resolution covered in impugned
Agenda item no.18, were in fact in terms and in alignment with the
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Signing Date:24.07.2026
20:56:35
requirement stipulated in the aforesaid approval letters issued by the RBI. It
was also contended that in case there is any violation of such stipulations,
the respondents may face penal consequences covered under the provisions
of Section 47A of the Banking Regulation Act, 1949. While the said issue
and contention may be required to be considered after a detailed reply is
filed by the respondents, however, at this stage, having regard to the
urgency what with the meeting scheduled to be held on 25.07.2026, this
Court is of the opinion that the mandatory clauses under the SHA ought to
be lawfully processed and completed by the respondents. If the SHA
stipulates a particular procedure prescribed for amendment of the
MoA/AoA or to the capital structure of the respondent no.1, the respondent
ought to adhere strictly to that procedure or none at all.
19. It is also to be borne in mind that the petitioner apprehends that the
conversion of Warrant Series-1 to CCPS would drastically reduce the
shareholding pattern of the petitioner from 49% to 21% as a result of
amendment of Clause V of the MoA. The said issue needs to be considered
before any such proposed resolution covered under impugned Agenda item
no.18 can be tabled before the Board for its decision, in terms of the SHA.
It, prima facie, appears that obtaining prior written consent of both, the
petitioner as also respondent no.2, is not a mere formality but a mandatory
and indelible clause of the SHA executed between the parties.
20. It is observed that Clause V forms an integral part of the MoA of the
Company, which is a constitutive and fundamental document governing the
affairs of the company. Any amendment to the said Clause, if sought to be
effected through a Board resolution, mandates prior consent of all majority
shareholders. The petitioner, being one of the majority shareholders, is a
necessary and indispensable party for the grant of such consent. Hence, in
Signature Not Verified
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Digitally Signed
By:YASHRAJ
Signing Date:24.07.2026
20:56:35
the absence of the petitioner’s consent, any resolution purporting to amend
Clause V of the MoA would be contrary to law and unsustainable.
21. Arguments were also addressed on public interest suffering on
account of a series of large number of warrants being issued worth Rs.900
crores. The same does not appeal to this Court for the reason that a
stipulation which is found to be necessary and mandatory needs to be
followed in letter and spirit before any action proposing amendment to the
MoA/AoA and/or to convert the Warrants - Series 1 to CCPS is
undertaken. This Court is fortified in its aforesaid opinion in view of the
undisputed fact that the respondent no.1 itself sought written consent from
the petitioner on three different occasions in the recent past. Thus, the
element of public interest being involved can only be considered once the
parties to the SHA are on the same page.
22. In order to substantiate the aforesaid view, it is deemed apposite to
extract the three communications dated 23.10.2025, 01.05.2026 and
08.07.2026 hereunder:
“ DOCUMENT - 18
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: [email protected] <[email protected]>,
[email protected] <[email protected]>
Cc: Ranjan Ghosh <[email protected]>, Rahul Chopra
<[email protected]>, Aanchal Aggarwal
<[email protected]>, Sumeet Singh
<[email protected]>
INTERNAL
Signature Not Verified
Page 36 of 41
O.M.P.(I) (COMM.) 293/2026
Digitally Signed
By:YASHRAJ
Signing Date:24.07.2026
20:56:35
Dear Sir/Madam,
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.
Thanks & regards,
“DOCUMENT - 19
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 (“RIPL”), and Unity Small Finance Bank
Limited (“the Bank”), the aforementioned reserved matter require written
Signature Not Verified
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Digitally Signed
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20:56:35
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.
Please let us know if you have any questions or queries.
Thanks & regards,
Archana Goyal
Company Secretary & Head of Sustainability| Unity Small Finance Bank
Limited
Centrum House, CST Road, Vidyanagari Marg, Mumbai - 400098
+91 9867029555 | 022- 42159000
[email protected]”
“DOCUMENT – 16
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
<[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
Signature Not Verified
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20:56:35
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 /-
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 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
Signature Not Verified
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20:56:35
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.
23. From the aforesaid, it is clear as crystal that the respondents
themselves are in no doubt that a written consent of the petitioner is
necessary and mandatory in respect of issues which fall within the ambit of
“Reserved Matters”. Thus, in such circumstances, it is well nigh difficult
for this Court to accede to the arguments of the respondents.
24. Mr. Amit Sibal, learned senior counsel for the petitioner fairly
conceded that the reference to impugned Agenda item no.20 is a
typographical error and it is only the impugned Agenda item no.18 which is
being assailed herein.
25. It is observed that the petitioner has been able to establish a prima
facie strong case in its favour as against the respondents. The balance of
convenience is tilted in favour of the petitioner as formed upon
construction and interpretation of the relevant Clauses of the SHA, Clause
V of the MoA, as well the Annexure A - Terms and Conditions of the
Warrants - Series 1. This Court is of the considered opinion that, at this
stage, the petitioner is also likely to suffer irreparable loss in case the
respondents are not restrained from tabling and taking up for deliberations
Signature Not Verified
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20:56:35
and approval of the proposed resolution covered in the impugned Agenda
item no.18.
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.
27. Issue notice. Notice is accepted by Mr. Sanjay Gupta, learned
counsel for respondent nos.1 & 2 and Mr. Ateev Mathur, learned counsel
for respondent no.3.
28. Let the reply be filed by the respondents within four weeks from
date. Rejoinder thereto be filed within four weeks thereafter.
29. List on before the Joint Registrar (Judicial) on 18.09.2026 for
completion of pleadings.
30. List before the Court on 28.10.2026.
31. Dasti, to the parties, under the signatures of the Court Master.
TUSHAR RAO GEDELA
(JUDGE)
JULY 24, 2026
Sumit /yrj/kct/rl
Signature Not Verified
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Digitally Signed
By:YASHRAJ
Signing Date:24.07.2026
20:56:35