Bombay HC Sends Receiver Plea Back, Says Section 430 Does Not Bar Mack Star’s Suit Over Alleged Fraud In Sale Of Four Kaledonia Units

Mack Star Marketing Private Limited (“Mack Star”) owned the Kaledonia commercial building.

In 2009, Mack Star executed a registered agreement for sale of four units to Vikram Homes.

The appellants alleged that the agreement was fraudulent: Mack Star’s signatory lacked authority, the consideration was paid to HDIL rather than Mack Star, the units were substantially undervalued, and Vikram Homes was connected to the other defendants.

The appellants sued to cancel the agreement and sought interim relief, including appointment of a Court Receiver.

The Single Judge dismissed the interim application, reasoning that the dispute concerned oppression and mismanagement within Sections 241–242 of the Companies Act, 2013, and was therefore barred from the civil court by Section 430.

The appellants appealed against that order.

Sections 241 and 242 of the Companies Act, 2013 provide for relief before the Tribunal where a company’s affairs are conducted in a manner prejudicial or oppressive to members, prejudicial to public interest or the company’s interests, and the statutory conditions for relief are met.

Section 430 bars civil courts from entertaining matters that the Tribunal or Appellate Tribunal is empowered to determine under the Act.

In *Darshan Anilkumar Patel v. Pravinkumar Jinabhai Patel & Ors.*, the Supreme Court held that determining the validity of a sale deed falls within the civil court’s jurisdiction, notwithstanding Section 430; independent grievances falling within the Companies Act may be pursued before the appropriate forum.

The Court also referred to *Anuragha Poultries & Breeders* and *M/s Crystal Dwellings* as reflecting a similar approach.

The Court held that the Single Judge had treated references to Mack Star’s shareholding, Articles of Association, management and the removal of directors as establishing an oppression-and-mismanagement dispute.

On the plaint’s pleaded case, however, those matters supplied context for the alleged fraud and were incidental to the claim to cancel the sale agreement; they did not constitute the cause of action under Sections 241–242.

The plaint alleged specific conduct involving Vikram Homes, including the signatory’s lack of authority, payment of consideration to HDIL, undervaluation and collusion.

Applying *Darshan Anilkumar Patel*, the Court concluded that the civil court could determine the agreement’s validity.

It did not decide whether fraud was proved or whether interim relief should be granted, leaving those matters for the Single Judge.

It set aside the order dated 4 May 2026 and remanded the interim application for fresh consideration on all aspects, including appointment of a Court Receiver, uninfluenced by the appellate Court’s observations.