Grownd Realty Private Limited & Ors vs Khanna Paper Mills Limited

(Arising out of Order dated 08.01.2026 passed by the Adjudicating Authority (National Company Law Tribunal, Bench II, Chandigarh in Company Application No. 03 Of 2026 in Company Petition NO. 76/CHD/2024)

IN THE MATTER OF: Khanna Fiber Pvt. Ltd. &Ors. ...Appellant Versus Khanna Paper Mills Ltd. ...Respondent

Present: For Appellant : Mr. Ujjal Banerjee, Mr. Swapnil Gupta, Mr. Anand Sehgal and Mr. Shrikant Ramteke, Advocates.

For Respondent : Mr. Abhijeet Sinha, Sr. Advocate with Mr. Aditya Soni, Mr. Rishabh Jain, Mr. Rajat and Mr. Khan Ahmad Darvesh, Advocates.

WITH Comp. App. (AT) No. 225 of 2026 & I.A. No. 3946 of 2026 (Arising out of Order dated 08.01.2026 passed by the Adjudicating Authority (National Company Law Tribunal, Chandigarh Bench, Court II in Company Application No. 02 of 2026 in Company Petition No. 77 of 2024.)

IN THE MATTER OF: Grownd Realty Pvt. Ltd. & Ors. ...Appellant Versus Khanna Paper Mills Ltd. ...Respondent

Present: For Appellant : Mr. Ujjal Banerjee, Mr. Swapnil Gupta, Mr. Anand Sehgal and Mr. Shrikant Ramteke, Advocates.

For Respondent : Mr. Abhijeet Sinha, Sr. Advocate with Mr. Aditya Soni, Mr. Rishabh Jain, Mr. Rajat and Mr. Khan Ahmad Darvesh, Advocates.

JUDGMENT

Per Justice Sharad Kumar Sharma Member (Judicial) In these 2 company appeals the Appellant has approached this Tribunal by

invoking its Appellate jurisdiction under Section 421 of the Companies Act, 2013.

As consequence of the aforesaid proceedings, the Appellant in-

1. In Company Appeal (AT) No. 224/2026- The appellant challenges the

Impugned Order of 08.01.2026, as it was passed by the Learned NCLT, Chandigarh

Bench in C.P. No. (76/CHD/PB of 2024 in which the Company Application No.3 of

2026) has been decided by the Impugned Order. In Company Appeal (AT) No.

225/2026- The appellant has challenged the Impugned Order of 08.01.2026 as it

has been passed in Company Application No. 2 of 2026 that, was preferred in C.P.

No. 77/CHD/PB of 2024.

2. Each of these company appeals, are accompanied by an I.A. No. 3945/2026

and I.A. No. 3996/2026 respectively, wherein the Appellant has sought

Page 2 of 10 condonation of 107 days of delay that has chanced in re-filing of the Company

Appeals. According to the report of the Registry, the Company Appeal upon being e-

filed before the Registry of this Tribunal on 20.01.2026 was scrutinized and certain

defects were reported which were intimated too to the Appellant directing it to be

rectified within 7 days, intimation to it that was given on 29.01.2026. Its upon

refilling of the Company Appeal on 26.05.2026, the Registry has reported that there

is delay of 106 days that has chanced in refiling of the Company Appeal.

3. So far as the applications' seeking condonation of delay, in refiling are

concerned. The Appellant had belatedly refiled the same because of the fact that

with consent of the parties in Company Petition No. 2/2025, the parties made a

statement before the Ld. NCLT Chandigarh Bench- II, giving a consent thereof, that

they are open for mediation and accordingly it is stated by the Appellant in support

of the delay condonation application in re-filing that, since the matter was referred

for mediation there had been delayed refiling.

4. In the mediation order thus passed by the Learned Tribunal, it included the

orders that was passed in CP No. 76/CHD/HRY/2024 and CP No.

77/CHD/HRY/2024. It is pleaded by the Appellant that owing to the fact that the

Learned Tribunal had proceeded to pass an order of remitting the matter before the

mediator, the proceedings of the connected Company Petition No. 2 of 2025 was

deferred to be heard for a period of 2 months. It is because of the aforesaid reason,

the Counsel for the Appellant in the application submitted that because of the

order passed by the Ld. Tribunal on 29.01.2026 due to deferment of proceedings in

the Company Petition, due to the ensuing mediation process, where parties were

venturing to settle the dispute, they decided to pursue the mediation and hence

they were unable to rectify the defect and filed the amended Company Application

within the prescribed time period as contemplated under Rule 26.

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5. Having considered the grounds taken in the application and the argument

extended by the appellant that they remained under bonafide impression that there

could be possibility of a successful mediation, it is because of which the appellant

was unable to comply with the process of rectification of defect. Hence, they

rectified the same before the Registry of this Tribunal only on 22.05.2026.

Considering the grounds taken in the application and being satisfied with the same

besides because of the fact the issue of refiling being exclusively an issue between

the Appellant and the Tribunal and also because it chances due to the procedural

flaw, the delay in refiling has to be rationally construed, as such the delay of

106/107 days that is chanced in refiling of the Company Appeal would stand

condoned. Accordingly, I.A No. 3945/2026 and 3946/2026 would stand allowed.

6. On merits we feel it apt to briefly deal with the issue that, has been raked up

by the Appellant, in the Instant Company Appeals. The Appellant in the Instant

Company Appeal has come up with the case that the necessity for the Appellant

arose for preferring the instant company appeal, because of the order passed on

Company Application No. 2/2026, it was due to the fact that the interim relief that

was sought for by the Petitioners, was alleged by the Appellant to have been

erroneously granted and, as a consequence thereof, certain directions had been

issued, which according to the contention of the Appellant, the directions for

providing the Audited Financial Statement for the Financial Year 2023-24 and

2024-25 of the Appellant No. 1 company that could not have been furnished by the

Appellant, owing to the fact that the Resolution, which was subject matter of

consideration in the proceedings, it did not make any reference as regards the

Audited Accounts and because of the fact, the order proceeds to be passed based

upon the EGM, there could not have been a possibility for issuing any interim order

particularly of the nature, which is subject matter of the challenge in the Instant

Company Appeal.

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7. As the case has been projected by the Appellant, it was to the effect that the

Respondent Company, which was said to have been engaged in the manufacturing

business, was a business affair between the then closely knitted family members,

including the brother, mother and father around 2021, such other closely

connected members, certain disputes took place between the family members

themselves, regarding the shareholding pattern in the Respondent company. Later

on a family settlement was reached on 27.11.2022, executed between Brij Mohan

Khanna, Rahul Khanna and the Appellant No. 2 and 3, i.e., Renu Khanna and

Sourav Khanna. According to the appellant, the family settlement agreement was

agreed to act as a subsidiary arrangement in relation to the affairs of M/s Khanna

Fibre Pvt.Ltd. and M/S Grownd Realty Pvt. Ltd. i.e., Appellant of Company Appeal

(AT) No. 225/2026. Owing to the aforesaid circumstances, it was the case of the

Appellant that, in the company 99 per cent shares were being held by Appellant No.

1, and Appellant No. 3 who was a nominee shareholder of 1 per cent, but still the

affairs of the company were being controlled by Appellant No. 3. There had been

multifarious litigation between the parties, which were being agitated before the

Civil Court,as well as in the Company Petition. A proceeding under Section 98, too

was instituted by the Appellant herein by issuance of the requisition dated

04.05.2024, thereby invoking Section 100 of the Companies Act, 2013 expressing

intention to convene the EGM of the Appellant No. 1. However, only 3 days' notice

for the board's meeting to be considered was granted, which is being contended by

the Appellant that, otherwise under law the said requisition notice dated

04.05.2024 would be in violation of the intention and purpose of law as

contemplated under sub-Section 4 of Section 100 of the Companies Act, 2013

which contemplates for clear grant of 21 days' notice. These proceedings were

contested. The Appellants are said to have filed their response to the notice by filing

Page 5 of 10 the same on 05.05.2024, agitating the issue that the requisition ought to have been

carried within the statutory time frame contemplated under law.

8. It is the case of the Appellant, that despite the reply submitted by them on

05.05.2024 to the reacquisition notice dated 04.05.2024, which was said to be in

violation of sub-Section 4 of Section 100 of the Companies Act, 2013 despite of the

said fact still it was informed on 07.05.2024 that the Respondent would still be

proceeding to hold an EGM on the very next date i.e., 08.05.2024, which once

again is being agitated by the appellant, as to be an act violative of sub-Section 1 of

Section 101 of the Companies Act, 2013 which mandates the clear 21 days' notice

for the purposes of convening an EGM.

9. The Counsel for the Appellant further argues that, in cases where any

deviation was required as regards to the cut-off period of number of days

contemplated under Section 100 of the Companies Act, 2013 there was an

exception carved out under law that, there has to be a consent of more than 95 per

cent of members for the purposes of convening the EGM at a shorter notice, which,

according to the appellant, was not obtained,and despite the aforesaid anomalies

having been pointed outby the Appellant in his Reply of 07.05.2024, intimating

thereof that in case if such an EGM is proceeded to be continued and given effect

to, it will not have any legal binding effect, being procedurally flawed under law.

10. In order to safeguard any future catastrophic situation owing to the untimely

holding of the meeting without due compliance with the process of law, the

Appellant contends to have simultaneously given information to the Registrar of the

companies vide its e-mail communication of 08.05.2024 about the proposed

holding of the EGM being in express violation of law, but still despite of above the

EGM was proceeded with and was held on 08.05.2024 and it is alleged by the

Page 6 of 10 Appellant that it was in absolute disregard of the provisions contained under

Section 100 (4), to be read with Section 101 (1) of the Companies Act, 2013.

11. As there was persistent prevailing illegality, the Respondent companies are

said to have filed the Petition under Section 98 of the Companies Act, 2013 which

was numbered as Company Petition No. 76, seeking direction to convene the EGM

and to pass the Resolution which could have been as per law. The invocation of the

provisions contained under Section 98 of the Companies Act, 2013 by filing of the

Company Petition was for the purposes of exercising an extraordinary jurisdiction

that has been vested under law with the Ld. Tribunal, to call upon the meeting of

the members, but that could have been done exclusively only based under the

conditions there were prevailing, as mentioned in provisions in itself. In the

Company Petition 76/2024, the Respondent had sought a relief to the following

effect:

"27. In the said circumstances, the Petitioner humbly prays for the following reliefs:

a. That this Hon'ble Tribunal be pleased to pass appropriate direction(s} or order(s) declaring that the EGM held on May 8, 2024 was validly convened in terms of the proviso of Section 98 of the Companies Act, 2013 and further direct the Respondent Nos. 2 and 3 to sign the necessary forms and file the same along with the resolutions passed at the said EGM with Respondent No. 4 and do such others acts, as may be necessary to give effect to the resolutions passed at the said EGM;

b. In the alternative and if this Hon'ble Tribunal is not inclined to grant prayer clause (a), this Hon'ble Tribunal be pleased to pass an order directing the Respondent Nos. I to 3 to call, convene and hold an Extraordinary General Meeting of the members, of Respondent No. 1 on such date and time, and in such manner as this Hon'ble Tribunal deems fit, in order to discuss the agenda items/business mentioned in the Requisition Notice dated May 4, 2024 and pass appropriate resolutions;"

Page 7 of 10 12. The records reveal that while the Company Application was pending

consideration, the Respondent that is the Petitioner, in the Company Petition is

shown to have filed an application for the grant of interim relief. The application

thus preferred by Petitioner/Respondent in the Company Petition, by invoking Rule

11 of the NCLT Rules, 2016 was of the nature praying for directing the Respondent

in the CP, for placing the Financial Statement for Financial Year 2023-24, 2024-25

of Respondent No. 1 Company on record. Further, a direction was called for issuing

direction to R1 to R3 to call and convene an annual and an extraordinary General

Meeting of the members of Respondent No. 1, on such date and time and in such

manner for the purposes of considering the implications of the financial statements

of Respondent No. 1 company for the Financial Year 2023-24, 2024-25 and

henceforth.

13. This application preferred on 22.12.2025 has been considered by the Ld.

Tribunal and the same has been allowed by the Impugned Order dated 08.01.2026,

which is subject matter of challenge in the instant company appeal. The

consequential effect of the Impugned Order has been that the Ld. Tribunal had

proceeded to issue directions, observing thereof that since the proceedings have

been incontext of the provisions contained under Section 99 of the Companies Act,

2013 which pertains to regarding holding of the EGM, and besides that, since the

documents those are sought to be placed on record, being the Financial Statements

as narrated in the relief clause of the interim relief application. The order of

08.01.2026 is under question in the instant company appeal. An ex-parte

observation has been alleged to have been made by Ld. Tribunal while allowing the

relief prayed for in the Interim Relief application, the Ld. Tribunal held thereof that,

since the accounts have been duly audited, the Ld. Tribunal observe that there was

no logical justification as to why the financial statements could not be provided by

Respondent No. 2 and 3 to the Company Petitioner, i.e., the Appellant herein and

Page 8 of 10 more particularly when its the holding company. Consequentially a direction was

issued by the Ld. Tribunal to the appellant to ensure that the audited financial

statements are provided to the Petitioner of the Company Petition within a week, its

this part of the order which is under challenge herein and also the observations

that has been made by Ld. Tribunal, qua the other relief pertaining to production of

the Audited Financial Statement of the subsidiary company that could also to be

considered.

14. The issues engaging consideration were pertaining to the interpretation of

Section 129 (3) of the Companies Act, 2013 as it has been argued by Learned

Counsel for the Appellant. Qua the proceedings of Section 98 of the Companies Act,

2013 we are of the view that so far as interpretations argued in context of the

provisions contained under Section 129 (3) pertaining to the financial results,

which relates to a situation where the company has got one or more subsidiary

companies. What the law contemplates under the aforesaid provision is that there

has to be a consolidated financial statement of the company which has to be

prepared for all the subsidiaries and associates companies, but be that as it may.

What legal liability would flow in the proceedings as regards to the interim relief

granted by the Ld. Tribunal from the interpretation to be assigned under Section

129 of the Companies Act, 2013 that could be only question that, we should

venture into at this stage of the proceedings, as that would require stepping into

merits of the Petition under Section 98 of the Companies Act, 2013 which is still to

be adjudicated on merits upon by the Ld. Tribunal on its merit. Because of the fact

that, the nature of Impugned Order, which is under challenge herein is exclusively

of an interlocutory nature and that is simply an arrangement, which has been

made during the pendency of the Company Petition and that too particularly when

under the given set of circumstances where the Ld. Tribunal while passing the

order at this stage, has observed issuance of notices to the Respondents, hence the

Page 9 of 10 appropriate recourse that would be available to appellant would have been to

approach the Ld. Tribunal file a stay vacation application seeking recall/vacation of

the order dated 08.01.2026, issuing interim directions particularly that as

contained in para 4 and 5 of the Impugned Order and solicit its vacation, rather

than immediately rushing to invoke this Appellate jurisdiction under Section 421 of

the Companies Act, 2013. The expression "order", given under the Appellate

jurisdiction, no doubt will contain within its ambit, the Interlocutory orders also,

but it will contain within the ambit of interlocutory orders, those which partially or

wholly decides any dispute or affects the dispute between the parties on merits or

even if it partially touches the adjudication of right of the parties, while deciding

the interim relief application. Since the impugned order in itself happens to be an

arrangement made during the pendency of the Company Petition, its proprietary

itself could be tested when the Appellant files a stay vacation application and

solicits an appropriate order of vacation or modification of order by the Ld. Tribunal

in itself who could be in a better position to answer the justification for the grant of

the interim order. We are therefore of the view that it is open for the appellant to

file an application for stay vacation before the Ld. Tribunal and to get the interim

order of 08.01.2026 vacated. We don't see any reason to interfere at this interim

stage, subject to the aforesaid exceptions as carved out by us, the company appeal

would stand dispose of.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Arun Baroka] Member (Technical)

[Indevar Pandey] Member (Technical)

MT

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