Rahul Khanna vs Khanna Paper Mills Limited & Ors

Rahul Khanna ...Appellant(s)

Versus

Khanna Paper Mills Ltd. & Ors. ...Respondent(s)

Present: For Appellant : Mr. Puneet Bali, Sr. Advocate with Mr. Dohil Shah, Mr. Rishab Jain, Mr. Nitin Mishra, Advocates. For Respondents : Mr. Abhijeet Sinha, Sr. Advocate with Mr. Aditya Soni, Mr. Rajat Gautam, Advocates for R-1. Mr. Alok Jagga, Mr. Viren Sharma, Advocates for R- 2 & 5. Mr. Gaurav Chopra, Sr. Advocate with Mr. Swapnil Gupta, Mr. Ujjal Banerjee, Mr. Anmol Sehgal, Mr. Sajal Jain, Advocates for R-3 & 4.

ORDER

(Hybrid Mode)

12.01.2026: This appeal is against an impugned order dated

24.12.2025 passed by Ld. NCLT, Chandigarh Bench (Court-II) in Comp.

Appl/262 (CH)2025, Comp. Appl/263 (CH)2025 in CP No. 2/Chd/Hry/2025.

The prayers made in these applications are as under:

"Prayer in COMP.APPL/262 (CH)2025:-

(a) To appoint Chairperson/Observer for overseeing the AGM and ensuring that the voting of the trust takes place in accordance with paragraphs No. 19 -21 of the instant application;

(b) Restrain Respondent No. 1 Company from interfering with the exercise the voting rights of Brij Mohan Khanna in relation to the shares of "Brij Mohan and Rahul Khanna Family Trust" to the tune of 51.84% shares.

(c) To appoint Chairperson / Observer to oversee the future proceedings qua ensuing Meetings for fair and transparent conduct;

(d) Pass such other/ further order(s) as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case;"

-2- 2. "Prayer in COMP.APPL/263 (CH)2025:-

(a) Allow the present application;

(b) Adopt the additional agendas put forth by the Applicants at Annexure 4 in the AGM scheduled on 27.12.2025,

(c) Appoint an observer to oversee the functioning of the meeting more so, the AGM scheduled on 27.12.2025 and ensure that the voting is done as per shareholding as on 19.12.2024;

(d) Direct Respondents not to interfere with voting rights of Applicant No. I to the tune of 2,00,00,000 shares and Applicant No. 2 to the tune of 89,72,299 shares in the meeting more so, the AGM scheduled on 27.12.2025;

(e) Pass ad-Interim ex-parte orders in terms of prayer (A) to (D);

(f) Pass such other/ further orders) as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case,"

3. In the impugned order following directions were passed:

"5. Having considered the various facts as stated by the Ld. Counsels for the respective parties and also keeping note of the arguments, which have been advanced on earlier occasions by the Ld. Senior Counsels during the course of hearings in the main company petition, we find it appropriate to issue following directions: -

(a) The AGM, which is proposed to be conducted on 27.12.2025, may be conducted on that date; however, the same shall be held under the supervision of Hon'ble Justice Ranjit Singh. We accordingly appoint Hon'ble Ranjit Singh [ Mobile No.9899791094, email ID: justice.ranjit@gmail.com] to be the observer and request him to oversee the proceedings in the AGM. The Respondent Company Khanna Paper Mills Ltd through its Directors, shall intimate Hon'ble Justice Ranjit Singh about his appointment as an observer and request him for his presence during the meeting and would provide him the due Protocol and facilities for conveyance and stay apart from the fee of Rs 2,00,000/-. The required expenses shall be borne by the company.

(b) The AGM should be conducted mainly on the adoption of the financial statements. The other issues as proposed in the agenda to be deferred with. The company through its Directors shall ensure that required supporting documents are shared -3-

with other participating shareholders particularly the applicants in these applications.

(c) Mr. Brij Mohan Khanna being a Principal Trustee of "Brij Mohan and Rahul Khanna Family Trust" will exercise the voting rights of 51.84% on behalf of the Trust in the said AGM of the company-Khanna Paper Mills Limited. The due arrangements as regards his movement in his own car and proper support keeping in view his old age and health condition be allowed. He will not be stopped at the main entrance of the company premises, as has been done in the recent past. However, he will take the decision in the meeting in the interest of the company. He will also preside in the AGM as a Chairperson and assisted by the Board of Directors and the auditors.

(d) It is clarified that the status quo, as ordered vide the order dated 08.01.2025 regarding directorship and shareholding as of 19.12.2024 shall be duly observed. In view thereof, Mrs. Renu Khanna shall be eligible to vote with respect to the remaining 200000 equity shares, notwithstanding the Board of Directors' decision dated 28.12.2024 to freeze her rights thereon. Further Mr. Saurabh Khanna shall be entitled to participate in the AGM and vote in accordance with his entire shareholding of 89,72,299 shares.

With these directions, both these Applications bearing COMP.APPL/262 (CH)2025 & COMP.APPL/263 (CH)2025 stands disposed of."

4. It is the submission of Ld. Sr. Counsel for the Appellant there were four

items of Agendas, settled in the Board's meeting dated 05.12.2025 and

without there being any prayer to put a stay on these Agendas, vide the

impugned order, the Ld. NCLT had allowed only Agenda No. 1 qua holding of

the AGM on the adoption of the financial statements but whereas agendas No.

2, 3, 4 were deferred, without any prayers made in these two applications.

5. We are not inclined to accept the submissions made by the Ld. Sr.

Counsel for the Appellant on this count since these three agendas were only

deferred and as pointed out the matter is pending for disposal on 27.01.2026, -4-

hence, we request the Ld. NCLT to take up the issues concerning the

remaining three agendas and to pass directions thereof.

6. Regarding para 5 (c) of the impugned order, the submission of the Ld.

Sr. Counsel for the Appellant is though Mr. Brij Mohan Khanna being a

Principal Trustee of Brij Mohan and Rahul Khanna Family Trust needs to take

decision in the meeting in the interest of the company, but in a Civil Suit

bearing No. 1017 of 2025, an order dated 02.09.2025 has been passed

directing inter alia Mr. Brij Mohan Khanna shall not indulge in any activity

and shall not interfere in the management/affairs of the Trust which may be

prejudicial to the beneficiaries of such Trust.

7. It is submitted passing of an order and keeping in view the interest of

the company shall not suffice and it needs to be directed that Mr. Brij Mohan

Khanna should also follow the interim directions dated 02.09.2025 passed in

CS No. 1017 of 2025.

8. There is no need to give such a direction as if order dated 02.09.2025

is violated, the Appellant shall have the right to take action qua such violation,

including filing of Contempt, if any.

9. Lastly it is urged without any voting per Section 104 of the Companies

Act, 2013, Mr. Brij Mohan Khanna has been appointed as a Chairperson of

the AGM. There is no serious counter to this argument, hence we direct

provisions of Section 104 (supra) be followed for appointment of Chairperson

in the meeting.

10. With these observations, the appeal stands disposed of with a request

to the Ld. NCLT to hear on 27.01.2026 upon remaining agendas, as -5-

mentioned in para 5 above and to dispose of the issue raised in an expeditious

manner. The appeal is accordingly disposed of. Pending application(s) viz I.A.

No. 223, 224 and 225 of 2026 are also disposed of.

[Justice Yogesh Khanna] Member (Judicial)

[Mr. Ajai Das Mehrotra] Member (Technical)

Ram N./Ravi R.