Ocean Deity Investment Holdings Limited, Pcc And Anr. vs Sarang Wadhawan And 4 Ors.
- Court
- Bombay High Court
CNR No : HCBM020089952020
2026:BHC-OS:23140
902-COMAP(L)-21982-2026.odt
Rohit Ghuge
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL APPEAL (L) NO. 21982 OF 2026
IN
INTERIM APPLICATION NO. 2505 OF 2020
Digitally
signed by
ROHIT
RAMDAS
GHUGE
Date:
2026.10.26
16:10:49
+0530
WITH
ROHIT
RAMDAS
GHUGE
INTERIM APPLICATION NO. 3893 OF 2026
IN
COMMERCIAL APPEAL (L) NO. 21982 OF 2026
1. Ocean Deity Investment
Holdings Limited, PCC in
respect of Mack Star Holdings
(Mauritius) Limited
A Company incorporated
under the laws of Mauritius,
having its registered office at
Ebene House, Hotel Avenue,
33 Cybercity, Ebene, 72201,
Mauritius.
2. Mack Star Marketing
Private Limited
A company incorporated
under the Companies Act,
1956 having its previous
th
registered office at 1102, 11
Floor, Peninsula Business
Park, Lower Parel, Mumbai-
400013.
And its new registered office
at Units No. 404, Kaledonia,
Sahar Road, Andheri (East),
Mumbai, 400069. …Appellants/
Original Plaintiffs
1/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
Versus
1. Sarang Wadhawan
A resident of India addressed
at Wadhawan House, Union
Park Road, Bandra (W),
Mumbai – 400050.
2. Rakesh Wadhawan
A resident of India addressed
at Wadhawan House, Union
Park Road, Bandra (W),
Mumbai – 400050.
3. Waryam Singh
A resident of India addressed
nd
at 1401-2, Stellar Tower, 2
Cross Lane, Lokhandwala, SV
Patel Nagar, Andheri (West),
Mumbai-400053.
4. Amanpreet Singh
A resident of India addressed
nd
at 1401-2, Stellar Tower, 2
Cross Lane, Lokhandwala, SV
Patel Nagar, Andheri (West),
Mumbai-400053.
5. Vikram Homes
A company incorporated
under the Companies Act
1956, having its registered
office at, 215, Aashirwad
nd
Complex, 2 Floor, D-1,
Green Park, New Delhi,
110016. …Respondents /
Original Defendants
_______________________________________________________________
Mr. Sharan Jagtiani, Senior Advocate a/w Mr. Karl Tamboly, Mr.
Siddharth Ranade, Mr. Prakashal Jain, Ms. Arunima Athavale, Ms.
Neeraja Barve, Ms. Mahima Tahiliani and Ms. Apurva Manwani i/b
Trilegal for the Appellants.
2/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
Mr. Zubin Behramkamdin a/w Mr. Mutahhar Khan, Mr. Gaurav Shukla
and Mr. Jainam Jain for Respondent No. 1
Mr. Nikhil Sakhardande, Senior Advocate a/w Mr. Mayur Khandeparkar,
Ms. Shubhra Swami, Mr. Pratik Pawar, Ms. Shanaya Cyrus Irani and Ms.
Ayushi Yelimineti i/b J. Sagar Associates for Respondent No.5.
_______________________________________________________________
CORAM: BHARATI DANGRE &
ASHISH S CHAVAN, JJ.
th
DATE : 08 OCTOBER 2026.
JUDGMENT [Per Ashish S. Chavan J.] :
1. The Appellants, Mack Star Marketing Private Limited (“Mack
Star”) and Ocean Deity Investment Holdings Limited, PCC
th
(“ODIL”), being aggrieved by the order dated 04 May 2026
(“impugned order”) passed by the Learned Single Judge of this
Court inter alia dismissing Interim Application No. 2505 of 2020
(“Application”) filed in Commercial Suit No. 128 of 2021 (“Suit”)
have approached this Court by way of the present Commercial
Appeal.
2. The Suit was filed inter alia, seeking cancellation of an
th
agreement for sale dated 25 November 2009 (“impugned sale
agreement”) pursuant to which Respondent No.5 (Vikram Homes)
3/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
purchased Unit Nos 701, 702, 703 and 704 (“Units”) in a building
named “Kaledonia” situated in Andheri East owned by Mack Star.
3. The factual matrix germane to the issue that falls for
consideration before this Court is as under:
3.1. ODIL is an investment company formed and existing in
accordance with laws of Mauritius. It is the majority
shareholder of Mack Star.
3.2. Mack Star is a company incorporated under the
Companies Act, 1956. It has developed, owns and leases units
in a commercial office building named Kaledonia situated at
Andheri East, Mumbai.
3.3. The Respondent Nos. 1 and 2 are promoters of Housing
Development and Infrastructure Limited (“HDIL”).
Respondent Nos. 3 and 4 are individuals who according to the
Appellant were a part of Mack Star’s Board of Directors as
nominees of Respondent Nos. 1 and 2. Respondent No. 5-
Vikram Homes is the purchaser of the units.
4/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
3.4. The Appellant states that Vikram Homes is owned and
controlled by Mr. Dharampal Talwar and his family. His
brother Late Mr. Satyapal Talwar was a director of HDIL.
th
3.5. On 14 December 2007, a Memorandum Of
Understanding was entered into between Vikram Homes and
RT Construction (a proprietary concern of HDIL) for the
th
purchase of entire 7 floor of Kaledonia.
th
3.6. On 17 January 2008, RT constructions transferred the
right to construct a free sale commercial building in Andheri to
th
Mack Star for a consideration of INR 900 Crores. On 20
February 2008, HDIL Group companies and ODIL entered
into a Joint Venture Agreement to develop Kaledonia.
3.7. ODIL invested approximately INR 1000 Crores in
Mack Star and subscribed to common and preference shares
issued by Mack Star. Presently, ODIL holds 78.09% shares in
Mack Star.
3.8. In February 2008, the Articles of Association of Mack
5/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
Star were amended. It is the case of the Appellants that the
amendments sought to build certain safeguards in favour of
ODIL.
3.9. It is the pleaded case of ODIL that from 2008-2017, it
played a passive role in the affairs of Mack Star which was
managed predominantly by Respondent Nos. 3 and 4.
th
3.10. On 25 November 2009, the impugned sale agreement
was executed between Vikram Homes and Mack Star. On
behalf of Mack Star, the impugned sale agreement was signed
by Respondent No. 3 who was a nominee of Respondent Nos.
1 and 2. Admittedly, HDIL received the consideration.
rd
3.11. The Appellant has pleaded that on 23 August 2017, a
title search revealed for the first time the existence of the
impugned sale agreement. The Appellant has further pleaded
that in view of the irregularities found in the management of
st
Mack Star, on 1 September 2017, ODIL convened an Extra-
ordinary General Meeting of Mack Star and removed the
Respondent Nos. 3 and 4 and took control of the affairs of
6/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
Mack Star.
3.12. Based on the inquiries conducted by the Appellants,
they approached the Ld. Single Judge by way of a Commercial
Suit seeking cancellation of the impugned sale agreement on
the basis of fraud, collusion and conspiracy between Vikram
Homes, acting through the Talwars and wrongful loss
occasioned to Mack Star and corresponding wrongful gain
occasioned to the Respondent Nos. 1-4 in collusion and
connivance with each other. Interim Application No. 2505 of
2020 was filed inter alia seeking appointment of Court
Receiver and other ancillary reliefs.
th
3.13. By way of the impugned order dated 4 May 2026, the
Ld. Single Judge has rejected the Interim Application of the
Appellants inter-alia holding that the dispute in the Suit would
pertain to the jurisdiction of the Company Law Tribunal as
contemplated u/s 241 and 242 of the Companies Act, 2013
(“2013 Act”) and therefore the jurisdiction of the Ld. Single
Judge would be barred in view of the Section 430 of the 2013
Act.
7/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
4. Heard Learned Senior Advocate Mr. Jagtiani and Mr.
Tamboly for the Appellants and Learned Senior Advocates Mr.
Behramkamdin and Mr. Sakhardande for Respondent Nos. 1 and 5
respectively.
5. Ld. Senior Advocate Mr. Jagtiani and Mr. Tamboly on behalf
of the Appellants have assailed the impugned order on several
counts. They contended that it is a settled position of law that the
validity of an agreement for sale and the question of whether or not
it is void, unauthorized, vitiated by fraud squarely falls within the
jurisdiction of the civil court. The suit is premised on the fraudulent
act of Vikram Homes in entering into the impugned sale agreement
in collusion with Respondent Nos. 1 and 2, therefore, the suit is
maintainable and the bar u/s 430 of the 2013 Act does not apply to
the present suit. It was submitted that, the pleadings in the plaint
relating to the internal affairs of Mack Star forms part of the factual
background of the narration of events leading up to the fraud. It
does not constitute the basis or the cause of action in the suit. To
buttress this proposition, they have relied upon the judgments in the
case of Darshan Anilkumar Patel vs. Pravinkumar Jinabhai Patel &
8/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
1
Ors , M/s Crystal Dwellings Pvt Ltd. vs. Surat Singh Malhotra &
2
Ors. , Anuragha Poultries & Breeders & Anr. vs. Padmavathi &
3
Ors. .
Dealing with the observations in the impugned order which
has premised its finding on the observation that ODIL has relied on
indoor management, they contended that since the reliefs sought in
the suit in respect of cancellation of impugned sale agreement are
on the basis of the allegations regarding actions of Vikram Homes in
collusion with Respondent Nos. 1 and 2, there is no question of any
reliance on the doctrine of indoor management. They argued that
the doctrine of indoor management does not apply where the
contract itself is fraudulent and the third party is also a perpetrator
of fraud. To bring home this point, they relied on the judgment of
4
MRF vs Manohar Parrikar & Ors. . On behalf of the Appellants it
was also contended that the Plaint contained specific detailed
allegations against Vikram Homes and the Ld. Single Judge failed to
consider that the impugned sale agreement was vitiated by fraud
inasmuch as Respondent No. 3 had no authority to enter into the
impugned sale agreement, no consideration was admittedly paid by
1 SLP (C)D.9209 of 2020
2 2022:TSHC:41702-DB
3 (2022) 230 Comp Cas 207
4 (2010) 11 SCC 374
9/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
Vikram Homes to Mack Star but it was paid to unjustly enrich
HDIL. Moreover, the agreement is deliberately undervalued and its
execution is in direct contravention of the safeguards incorporated
in the Articles of Association of ODIL. It was argued that Vikram
Homes is not a bonafide third party since the Talwars are closely
associated with Respondent Nos. 1 and 2. Inviting our attention to
the prosecution by the Enforcement Directorate (“ED”) under
provisions of Prevention of Money Laundering Act, 2002 and the
provisional attachment order attaching the same units forming part
of the impugned sale agreement, it was sought to be contended that
the ED has independently also observed that Mack Star had suffered
wrongful loss to the tune of Rs. 40 Crores and that there was
conspiracy between Vikram Homes (the Talwars) and Respondent
Nos. 1 and 2.
6. Countering these submissions, learned Senior Advocate Mr.
Sakhardande appearing on behalf of Respondent No. 5 submitted
that the Appellant No. 1 is the majority shareholder and investor in
Appellant No. 2 and that Appellant No. 2 is the company which is a
signatory to the impugned sale deed. He submitted that the pleading
in the plaint indicates that the Appellant no. 1 as a majority
10/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
shareholder left the day to day operations of Appellant no. 2 to be
handled by domestic partners i.e. Respondent No. 1 and 2.
Appellant no. 1 has raised grievances regarding the internal affairs
of Appellant no. 2 in its capacity as a shareholder in Appellant No.
2. To drive home this point, he argued that the contention of the
Appellant No. 1 as seen from his pleaded case, was that the
foundation of the suit was the significant diminution in the value of
the investment of ODIL in Mack Star. He urged that in pith and
substance, Appellant No. 1 has raised grievances of oppression and
mismanagement which fall squarely within Sections 241/242 of the
2013 Act. He submitted that the relief claimed by the Appellants
clearly concerned internal disputes between Appellant No. 1 and
the Respondent Nos. 1 and 2 which relate to the shareholders
dispute and the internal management of Appellant No. 2 and have
nothing to do with Respondent No. 5, a third party bonafide
purchaser. Defending the impugned order, he submitted that the
observation of the learned Single Judge in so far as it observes that
the disputes in the suit would pertain to the jurisdiction of National
Company Law Tribunal (NCLT), is correct and that the doctrine of
indoor management squarely applies to the facts of the present case.
In support of these submissions he has relied upon the judgment of
11/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
the Hon’ble Apex Court in the matter of Shailaja Krishna vs. Satori
5
Global Limited & Ors . and MRF Limited ( supra ). He has also
submitted that a holistic reading of the plaint shows that the
Commercial Suit is nothing but a dressed up and cleverly drafted
attempt to overcome the legal bar u/s 430 of the 2013 Act.
Supplementing these arguments, learned Senior Advocate Mr.
Behramkamdin appearing for Respondent No. 1 has strenuously
urged that the NCLT is empowered to determine the dispute arising
from the Suit. For determining whether a statutory bar applies, the
court must identify the real and substantive controversy. To buttress
his submission, he has relied on several judgments, while
particularly laying emphasis on the pronouncements of the Hon’ble
Apex Court in the case of Saurav Jain & Anr. vs. A.B.P. Design &
6
Anr. and of the Delhi High Court in the cases of Dinesh Kumar vs.
7
Sinecure Technocity Pvt. Ltd. & Ors. , M/s Karyan Global LLP vs.
8
Vivel Kumar Mishra & Ors .
7. Appreciating the rival submissions, at the outset, we must
observe that both sides have adverted to several disputed questions
5 (2026) 2 SCC 706
6 (2022) 18 SCC 633
7 CS (Comm) No. 242 of 2019
8 2025 SCC OnLine Del 8740
12/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
of fact during oral arguments. On behalf of the Appellants,
submissions were made on facts pertaining to the manner in which
the fraud has vitiated the impugned sale agreement and why their
interim application ought to have been allowed and a court receiver
appointed. The Respondents on the other hand have rebutted these
submissions and attempted to emphasize on how the impugned sale
agreement does not constitute a fraud. Both parties have taken us
through various documents which form part of the proceedings
before the Ld. Single Judge.
However, being mindful of the fact that these are triable issues
and disputed questions of fact, which can be best adjudged by the
Ld. Single Judge, we restrict our observations to the finding of the
Ld. Single Judge that the dispute in the Suit pertains to the
jurisdiction of NCLT and consequently the Civil Court’s jurisdiction
is barred. In this narrow conspectus of inquiry, it would be apposite
to reproduce the relevant findings of the Ld. Single Judge.
“ 24. The plaint contains allegations regarding the affairs of
the management of plaintiff no. 2, the shareholdings of
plaintiff no. 1 in plaintiff no. 2, and the removal of
defendants nos. 1 and 2 from the board of directors of
plaintiff no. 2. which have been elaborately pleaded. The
cause of action for filing the suit is also based on the internal
enquiry into the company's affairs and its financial status.
Thus, prima facie, the dispute in the suit appears to concern
the affairs of the plaintiff no. 2 company, in which plaintiff
13/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
no. 1 claims to have a stake. Hence, there is substance in the
submissions made on behalf of defendant no. 5 that the
disputes raised in the suit would pertain to the jurisdiction of
the company law tribunal as contemplated under Sections 241
and 242 of the Companies Act. Therefore, in view of Section
430 of the Companies Act, the civil court's jurisdiction would
be barred from dealing with the allegations regarding the
affairs of the company, which are required to be dealt with
under Sections 241 and 242 of the Companies Act. Hence, at
this preliminary stage, the plaintiff would not be entitled to
seek any interim relief on the ground of mismanagement of
the affairs of plaintiff no. 2 company by making allegations
against its erstwhile board of directors and shareholders.
25. Except for the allegations against defendant nos. 1 and 2
that the Wadhwans executed the fraudulent transaction to
favour HDIL, no other allegations are made directly against
defendant no. 5. Defendant no. 5 is in occupation and
possession of the said units based on a registered document.
The documents on record prima facie show that the
transaction in favour of defendant no. 5 is executed for the
payment of full consideration, and the document is registered
after payment of stamp duty based on the market value.
Therefore, in such circumstances, an injunction as prayed for
in the suit cannot be granted against a true owner at this
stage, in the absence of any prima facie case, a balance of
convenience, or irreparable loss shown by the plaintiffs.
XXX
28. In Kotta Venkataswami, the controversy before the
Madras High Court concerned the company's liability under a
mortgage bond purportedly executed on its behalf. By
referring to the Articles of Association of the company, it was
held that since an illegality appeared on the face of the bond,
the plaintiff was not entitled to enforce it. In Shashank
Bhagat, the controversy before the Delhi High Court arose
from a dispute pertaining to a development agreement signed
by the respondent in her individual capacity and on behalf of
the company. It is held that the persons dealing with a
company that has taken all reasonable steps to satisfy that the
transaction is an authorised one are entitled to assume that all
14/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
internal proceedings of the company would have been duly
complied with. It is further held that a doctrine of indoor
management has limited application, and a person who has
either a constructive or actual notice of any irregularity
cannot seek protection under the doctrine of indoor
management and that such a doctrine would also have little
application in cases of fraud and forgery. In the present case,
the plaintiff has alleged indoor mismanagement of its own
company; hence, in a suit seeking relief against the third party
based on the allegations regarding internal affairs of the
company, neither of the decisions would be of any assistance
to the plaintiffs to seek interim relief as prayed in the present
application.
29. Therefore, for the reasons recorded above, the interim
application is dismissed. ”
8. The Ld. Single Judge has recorded a finding that the dispute,
prima facie appears to concern the affairs of Mack Star in which
ODIL claims to have a stake and hence, the dispute raised in the
Suit would pertain to the jurisdiction of NCLT as contemplated u/s
241 and 242 of the 2013 Act, therefore, the civil court’s jurisdiction
would be barred in view of Section 430 of the 2013 Act,
consequently, the Appellant would not be entitled to seek any
interim relief. Although the Ld. Single Judge has rendered this
finding in the interim application, rejecting the reliefs of the
Appellant, to our mind, the findings have a cascading effect. By
observing that the dispute in the Suit concerns the internal affairs of
Mack Star, which is amenable to the jurisdiction of the NCLT and
15/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
requires to be dealt with u/s 241 and 242 of the 2013 Act, the Ld.
Single Judge has virtually closed the doors of the Appellants and
relegated them to another course of action.
At this juncture, it would be apposite, to reproduce Sections
241 and 242 of the 2013 Act which are as under:
“241. Application to Tribunal for relief in cases of oppression, etc.—
(1) Any member of a company who complains that—
(a) the affairs of the company have been or are being
conducted in a manner prejudicial to public interest or in a
manner prejudicial or oppressive to him or any other member or
members or in a manner prejudicial to the interests of the
company; or
(b) the material change, not being a change brought about
by, or in the interests of, any creditors, including debenture
holders or any class of shareholders of the company, has taken
place in the management or control of the company, whether by
an alteration in the Board of Directors, or manager, or in the
ownership of the company‘s shares, or if it has no share capital,
in its membership, or in any other manner whatsoever, and that
by reason of such change, it is likely that the affairs of the
company will be conducted in a manner prejudicial to its interests
or its members or any class of members,
may apply to the Tribunal, provided such member has a right to
apply under section 244, for an order under this Chapter.
(2) The Central Government, if it is of the opinion that the
affairs of the company are being conducted in a manner
prejudicial to public interest, it may itself apply to the Tribunal
for an order under this Chapter.
(Provided that the applications under this sub-section, in respect
of such company or class of companies, as may be prescribed,
shall be made before the Principal Bench of the Tribunal which
shall be dealt with by such Bench)
(3) Where in the opinion of the Central Government there
exist circumstances suggesting that-
16/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
(a) any person concerned in the conduct and management
of the affairs of a company is or has been in connection therewith
guilty of fraud, misfeasance, persistent negligence or default in
carrying out his obligations and functions under the law or of
breach of trust;
(b) the business of a company is not or has not been
conducted and managed by such person in accordance with
sound business principles or prudent commercial practices;
(c) a company is or has been conducted and managed by
such person in a manner which is likely to cause, or has caused,
serious injury of damage to the interest of the trade, industry or
business to which such company pertains; or
(d) the business of a company is or has been conducted and
managed by such person with intent to defraud its creditors,
members or any other person or otherwise for a fraudulent or
unlawful purpose or in a manner prejudicial to public interest,
the Central Government may initiate a case against such person
and refer the same to the Tribunal with a request that the
Tribunal may inquire into the case and record a decision as to
whether or not such person is a fit and proper person to hold the
office of director or any other office connected with the conduct
and management of any company.
(4) The person against whom a case is referred to the
Tribunal under sub-section (3), shall be joined as a respondent to
the application.
(5) Every application under sub-section (3) -
(a) shall contain a concise statement of such
circumstances and materials as the Central Government may
consider necessary for the purposes of the inquiry; and
(b) shall be signed and verified in the manner laid
down in the Code of Civil Procedure, 1908 (5 of 1908), for the
signature and verification of a plaint in a suit by the Central
Government.]
242. Powers of Tribunal.— (1) If, on any application made under
section 241, the Tribunal is of the opinion—
(a) that the company‘s affairs have been or are being
conducted in a manner prejudicial or oppressive to any member
or members or prejudicial to public interest or in a manner
prejudicial to the interests of the company; and
(b) that to wind up the company would unfairly prejudice
such member or members, but that otherwise the facts would
17/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
justify the making of a winding-up order on the ground that it
was just and equitable that the company should be wound up, the
Tribunal may, with a view to bringing to an end the matters
complained of, make such order as it thinks fit.
(2) Without prejudice to the generality of the powers under sub-
section (1), an order under that subsection may provide for—
(a) the regulation of conduct of affairs of the company in
future;
(b) the purchase of shares or interests of any members of
the company by other members thereof or by the company;
(c) in the case of a purchase of its shares by the company as
aforesaid, the consequent reduction of its share capital;
(d) restrictions on the transfer or allotment of the shares of
the company;
(e) the termination, setting aside or modification, of any
agreement, howsoever arrived at, between the company and the
managing director, any other director or manager, upon such
terms and conditions as may, in the opinion of the Tribunal, be
just and equitable in the circumstances of the case;
(f) the termination, setting aside or modification of any
agreement between the company and any person other than those
referred to in clause (e):
Provided that no such agreement shall be terminated, set aside
or modified except after due notice and after obtaining the
consent of the party concerned;
(g) the setting aside of any transfer, delivery of goods,
payment, execution or other act relating to property made or
done by or against the company within three months before the
date of the application under this section, which would, if made
or done by or against an individual, be deemed in his insolvency
to be a fraudulent preference;
(h) removal of the managing director, manager or any of
the directors of the company;
(i) recovery of undue gains made by any managing director,
manager or director during the period of his appointment as such
and the manner of utilisation of the recovery including transfer to
Investor Education and Protection Fund or repayment to
identifiable victims;
(j) the manner in which the managing director or manager
of the company may be appointed subsequent to an order
removing the existing managing director or manager of the
18/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
company made under clause (h);
(k) appointment of such number of persons as directors,
who may be required by the Tribunal to report to the Tribunal on
such matters as the Tribunal may direct;
(l) imposition of costs as may be deemed fit by the Tribunal;
(m) any other matter for which, in the opinion of the
Tribunal, it is just and equitable that provision should be made.
(3) A certified copy of the order of the Tribunal under sub-section
(1) shall be filed by the company with the Registrar within thirty
days of the order of the Tribunal.
(4) The Tribunal may, on the application of any party to the
proceeding, make any interim order which it thinks fit for
regulating the conduct of the company‘s affairs upon such terms
and conditions as appear to it to be just and equitable.
(4-A) At the conclusion of the hearing of the case in respect of
sub-section (3) of section 241, the Tribunal shall record its
decision stating therein specifically as to whether or not the
respondent is a fit and proper person to hold the office of
director or any other office connected with the conduct and
management of any company.)
(5) Where an order of the Tribunal under sub-section (1) makes
any alteration in the memorandum or articles of a company, then,
notwithstanding any other provision of this Act, the company
shall not have power, except to the extent, if any, permitted in
the order, to make, without the leave of the Tribunal, any
alteration whatsoever which is inconsistent with the order, either
in the memorandum or in the articles.
(6) Subject to the provisions of sub-section (1), the alterations
made by the order in the memorandum or articles of a company
shall, in all respects, have the same effect as if they had been duly
made by the company in accordance with the provisions of this
Act and the said provisions shall apply accordingly to the
memorandum or articles so altered.
(7) A certified copy of every order altering, or giving leave to
alter, a company‘s memorandum or articles, shall within thirty
days after the making thereof, be filed by the company with the
Registrar who shall register the same.
19/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
(8) If a company contravenes the provisions of sub-section (5),
the company shall be punishable with fine which shall not be less
than one lakh rupees but which may extend to twenty-five lakh
rupees and every officer of the company who is in default shall be
punishable with imprisonment for a term which may extend to
six months or with fine which shall not be less than twenty-five
thousand rupees but which may extend to one lakh rupees, or
with both.”
An analysis of the provisions of Section 241 r/w clauses (a)
and (b) of subsection 1 of Section 242 of the 2013 Act shows that
the relief under these provisions can be granted only if the Tribunal
is of the opinion: (1) that the company’s affairs have been or are
being conducted in a manner- (a) prejudicial to any member or
members or (b) prejudicial to public interest or (c) prejudicial to the
interests of the company or (d) oppressive to any member or
members and (2) that though the facts would justify the making of a
winding up order on the basis of just and equitable clause, such a
winding up would unfairly prejudice such member or members.
It is settled law that the validity of an agreement for sale and
the question of whether it is valid or vitiated by fraud squarely falls
within the ambit of the jurisdiction of the civil court. In the case of
Darshan Anilkumar Patel (supra) , the Hon’ble Supreme Court has,
dealing with the aforesaid aspect observed thus:
“2. There is no error in the finding that the suit which was filed for
20/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
a declaration in regard to the invalidity of the sale deeds was
properly instituted before the civil court and there was no occasion
to transfer the appeal to the National Company Law Tribunal.
Section 430 of the Companies Act 2013 bars the jurisdiction of a
civil court to entertain a suit or proceeding in respect of any matter
which the tribunal or the appellate tribunal is empowered to
determine under the Act or any other law for the time being in
force. The jurisdiction to decide the validity of a sale deed would
fall within the ambit of the civil court. Hence, we are in agreement
with the impugned order of the High Court dated 5 February 2020.
XXX
4. We clarify that while we are in agreement with the impugned
judgment of the High Court, if there are any independent
grievances falling within the purview of the Companies Act 2013,
the petitioner will be at liberty to follow the appropriate remedy in
accordance with law. The District Judge is requested to ensure the
expeditious disposal of the First Appeals, RCA Nos 153 and 154 of
2015, on or before 31 August 2021.”
A similar view has been echoed by a Single Judge of the High
Court of Madras in the matter of Anuragha Poultries (supra) and
the Division Bench of the High Court of Telangana in M/s Crystal
Dwellings (supra).
9. Revisiting the facts of the present case, the Ld. Single
Judge has premised the finding that the pleadings in the plaint
would amount to oppression and mismanagement contemplated u/s
241/242 of the 2013 Act on the observations that the plaint
contains allegations regarding the affairs of Appellant No. 2, the
21/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
share holding of Appellant No. 2 and removal of Respondent Nos.
3 and 4 from the board of directors of Appellant No. 2
A careful perusal of the pleadings in the Plaint would reveal
that the Appellant No. 2 has described its internal affairs vis-a-vis
Appellant No. 1, the shareholding of Appellant No. 1 in Appellant
No. 2 in order to set out the chronology of events which forms the
substratum of the fraud. The shareholding of Appellant No. 1 in
Appellant No. 2 and the reference to Articles of Association of
Appellant No. 2 Mack Star in the plaint is to demonstrate how the
Respondent Nos. 3 and 4 have in collusion with Vikram Homes
(Respondent No. 5) defrauded the Appellants by execution of the
impugned sale agreement. We find the averments in the Plaint
regarding the removal of Respondent No. 3 and 4 in September
2017 was after the Title Search Report obtained by the Appellant
No. 1 which unearthed the role of the Respondent Nos. 3 and 4 in
perpetrating the fraud. Thus, the reference to the Extra-ordinary
General Meeting (EGM) of the Appellant No. 2’s shareholders
dated 01.09.2017 was only to show the fallout of the discovery of
fraud by Appellant No. 1 and has nothing to with oppression and
mismanagement. Further, the reference to the internal inquiry made
by the Appellants is also not connected with the internal affairs of
22/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
Appellant No.2 and does not refer to oppression and
mismanagement in any manner, quite simply, since it is the pleaded
case of the Appellants that the internal inquiry was commissioned
by them only with a view to ascertain whether the impugned sale
agreement was as per market value, which in fact confirmed the
apprehensions of the Appellants that the property was substantially
undervalued.
10. Thus, stray references in the Plaint regarding the
internal affairs of the Appellant No. 2 do not amount to allegations
of oppression and mismanagement, albeit they are incidental to
unfolding the allegations of fraud which form the cause of action of
case of the Appellant for setting aside the impugned sale agreement.
In the wake of the aforesaid discussion, we cannot persuade
ourselves to agree with the observations of the Ld. Single Judge that
the pleadings in the plaint would amount to oppression and
mismanagement as contemplated u/s 241/242 of the 2013 Act.
11. A perusal of the pleadings in the Plaint, on the
touchstone of the aforesaid conspectus yields that ODIL is not only
the majority shareholder of Mack Star but also an investor who by
23/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
way of the amendment in February 2008 had engrafted certain
additional safeguards in Articles of Association of Mack Star to
protect its interests. The pleadings in the plaint indicate that
Respondent Nos. 1 and 2 were promoters of HDIL and the
Respondent Nos. 3 and 4 were directors of Mack Star as nominees
of Respondent Nos. 1 and 2. The impugned sale agreement was
admittedly signed on behalf of Mack Star by Respondent No. 3
who, incidentally also served as director of HDIL for several years
in the past. Vikram Homes i.e. Respondent No.5 is the purchaser of
the units. It is the pleaded case of the Appellant that Vikram Homes
is owned and controlled by Dharampal Talwar and his family and
that one of the family members of the Talwars was a former director
of HDIL.
It is in this backdrop that we must consider the pleadings
th
pertaining to the impugned sale agreement. On 25 November
2009, Mack Star entered into a registered sale agreement with
Vikram Homes. It is not in dispute that the sale agreement was
signed by Respondent No. 3. The plaint alleges that Respondent
No. 3 had no authority either by way of board resolution or power
of attorney granted by Mack Star to enter into the impugned sale
agreement. It is alleged that despite recitals of the sale agreement
24/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
recording that the consideration was paid to the developers,
factually, the consideration for the impugned sale agreement was
paid to HDIL and not to Mack Star. It is also the pleaded case of the
Appellants that the agreement is substantially under valued and that
Vikram Homes is not a bona fide third party since there was a
demonstrable nexus between Respondent Nos 1, 2 and 3 on one
hand and the Talwars on the other. The impugned sale agreement
was in direct contravention of the safeguards engrafted by ODIL in
the Articles Of Association of Mack Star. Thus, from the pleadings,
the suit is founded on the fraudulent act of Vikram Homes entering
into the impugned sale agreement in collusion with Respondent
Nos. 1, 2 and 3. The pleadings also portray how the fraud was
unearthed by ODIL during a title search in August 2017 when they
became aware of the impugned sale agreement for the first time and
thereafter in the internal inquiry carried out by Appellant No.2
which revealed the substantial undervaluation of the property.
12. The Appellants in the plaint have made out detailed
allegations against Vikram Homes including the nexus between the
Talwars and the Respondent Nos. 1 and 2, the lack of authority of
Respondent No. 3 to enter into the impugned sale agreement on
25/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
behalf of Mack Star, the substantially undervalued consideration at
which the property was sold and the fact that the consideration was
paid to HDIL rather than Mack Star.
13. In the wake of the aforesaid discussion, we find that the
Appellants have in the plaint, prima facie pleaded the manner in
which the impugned sale agreement was entered into and also how
the sale is vitiated by fraud. Needless to say that it is for the rival
parties to prove or disprove the allegation of fraud in the
proceedings before the Ld. Single Judge, and it is not for us to delve
into these disputed questions of fact.
14. In the light of the aforesaid discussion, we are unable to
agree with the finding of the Ld. Single Judge that the dispute arsing
out of the suit pertains to the internal mismanagement of the affairs
of the Appellants inter-se and hence covered by the provisions of
Sections 241, 242 of the 2013 Act.
15. In the background of the aforesaid observations, we
proceed to pass the following order:
26/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
902-COMAP(L)-21982-2026.odt
: ORDER:
th
(i) The impugned order dated 4 May 2026 in
Interim Application No. 2505 of 2020 in
Commercial Suit No. 128 of 2021 is set aside.
(ii) The Interim Application No. 2505 of 2020 in
Commercial Suit No. 128 of 2021 is remanded to
the Ld. Single Judge for consideration afresh on all
aspects including the appointment of Court Receiver,
uninfluenced by our observations.
(iii) Commercial Appeal No. (L) No. 21982 of 2026
is allowed in the aforesaid terms. Accompanying
Applications do not survive and disposed of
accordingly.
ASHISH S. CHAVAN, J. BHARATI DANGRE, J.
27/27
Uploaded on - 26/10/2026 Downloaded on - 26/10/2026 17:11:26
Powered by TCPDF (www.tcpdf.org)