Deferring disciplinary determination pending NCLT adjudication was not perverse where allegations hinged on disputed shareholding.

The petitioner complained that Respondent No. 2, while acting as company secretary and legal adviser to Tejinder Singh Bhatia, had facilitated fabrication of share-transfer documents, misrepresented the company’s shareholding to the Economic Offences Wing (EOW), and acted in a conflict of interest.

The Director (Discipline) noted, among other matters, a statement to the EOW inconsistent with an audited balance sheet identifying the petitioner as a shareholder, but considered that ownership and transfer of 5,000 shares remained disputed before the National Company Law Tribunal (NCLT).

The Board of Discipline agreed with the Director’s prima facie opinion, found Respondent No. 2 not guilty at that stage, and left the petitioner at liberty to file a fresh complaint if an adverse finding emerged from the NCLT proceedings.

The petitioner challenged that decision under Article 226, contending that the Board had improperly made its disciplinary determination dependent on the NCLT proceedings.

Whether the Board of Discipline could decline to determine the misconduct complaint while the NCLT was considering the underlying dispute over the 5,000 shares.

Whether the Board’s decision warranted interference in the High Court’s discretionary jurisdiction under Article 226.

The complaint was brought under Section 21 of the Company Secretaries Act, 1980, read with Rule 3(1) of the Company Secretaries (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007.

The Court applied the principle that jurisdiction under Article 226 is extraordinary and discretionary, and that interference was not warranted where, in the circumstances, the disciplinary decision was not perverse or wholly unreasonable.

The Court considered the NCLT proceedings relevant because the misconduct allegations substantially rested on the disputed shareholding and the alleged transfer of 5,000 shares. The conflicting documents did not conclusively establish to whom the shares had been transferred, and the NCLT’s determination could therefore affect the factual basis of the complaint.

The Board had not relied on the proceedings’ pendency in isolation; it accepted the Director’s prima facie assessment in light of the unresolved factual dispute. The Court also noted that the petitioner retained liberty to bring a fresh complaint if the NCLT proceedings produced an adverse finding, and found no basis for Article 226 intervention.

The petition was dismissed.