Shashikant Bhagwanji Umraniya vs Laxman Kadva And Sons Private Limited & ...

IN THE MATTER OF: Shashikant Bhagwanji Umraniya ...Appellant Versus Laxman Kadva and Sons Pvt. Ltd. & Ors. ...Respondents Present: For Appellant :

For Respondents :

ORDER

(Hybrid Mode)

15.09.2026: The Appellant, who is the Petitioner in Company Petition

No. 20(AHM) 2026, presently pending consideration before the learned

NCLT, Ahmedabad, is aggrieved by the Order dated 09.07.2026 that has

been passed by the learned Tribunal in the matter of Shashikant Bhagwanji

Umraniya Versus. Laxman Kadva and Sons Private Limited & Ors., having its

source from the proceedings under Sections 241 and 242 of the Companies

Act, 2013.

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2. The learned Tribunal, while considering the issue of grant of interim

relief sought by the Appellant in the Company Petition, wherein the

controversy was raised against the Order of removal from the Directorship,

the learned Tribunal had initially passed an interim Order dated

16.04.2026. The application for grant of interim relief was opposed by the

Respondents, along with the pleading raised in counter filed in the Company

Petition. The reply was preferred by the Respondents by filing the same

before the Registry of the Tribunal on 16.04.2026.

3. The learned Tribunal, while considering the pleadings raised in the

Company Petition, initially found that, looking to the nature of relief sought

in the Company Petition itself and finding that the Appellant had a prima

facie case, it had granted interim protection to the Appellant by virtue of an

Order passed on 16.04.2026.

4. The Petitioners, who claim themselves to be the promoter-directors of

the Respondent's Company, are shown to respectively hold 7.55% and

5.10% shares of the total paid-up equity share capital of Respondent No. 1

Company. Besides that, Petitioner No. 3, who was the daughter of Petitioner

No. 1, was also a Director of the Respondent's Company and held 20%

shares. The petitioner No. 2 is the wife of Petitioner No. 1. Similarly,

Petitioner No. 4, which is the Hindu Undivided Family of Petitioner No. 1, of

which Petitioner No. 1 is the Karta, and Petitioner No. 4, i.e., Shashikant

Bhagwanji Umraniya heir, held 17.30% of the shares out of the total paid-up

equity share capital.

5. Thus, in all, the Appellants are shown to have held 49.95% of the

shareholding in the Respondent Company.

6. The business of Respondent No. 1 happens to be manual, semi-

automatic and automatic hydraulic double-column bandsaw machines and

allied industrial machinery. The main objects of the Company are to

manufacture, sale, resale, assemble, fabricate, erect, purchase, process,

design, develop, etc. Respondent Nos. 2 to 6 contend that Respondent No. 3

2 of 8 is the heir of Respondent No. 2 and, in all, they hold about 50.05% of the

shares out of the total paid-up equity share capital of the Company.

7. On 17.03.2026, the Petitioner/Appellant, was served with the notices

for calling the Board Meeting on 25.03.2026 for passing of an appropriate

resolution for convening an Extraordinary General Meeting of the Company.

This notice dated 17.03.2026 enclosed with it, a special notice and a

requisition dated 12.03.2026, calling for an Extraordinary General Meeting

of the Company for considering the removal of Petitioner No. 1 as a Director

of the Company.

8. The Board Meeting was proceeded to be carried despite objections

raised by Petitioner Nos. 1, 2 & 3, and consequent to it, the EOGM was

scheduled to be held on 17.04.2026. It was under these backgrounds that

the proceedings under Sections 241 & 242 of the Companies Act, 2013.

were drawn by the Appellant, praying to declare that Respondent Nos. 2 to 5

had committed various acts of oppression and mismanagement, as detailed

in the Company Petition, and a declaration also sought that the acts

complained of, of Respondent Nos. 2 to 5 are prejudicial to the interest and

also prejudicial to the interest of the Petitioners, and for remedying the

action.

9. There was also a prayer to set aside the resolution dated 12.03.2026,

for holding the EoGM on 17.04.2026.

10. Because of the fact that there was an imminent threat of removal of

the Petitioners from the Directorship, they prayed for grant of an interim

3 of 8 relief in the shape of an order of restraint against Respondent Nos. 1 to 5

from holding the EoGM on 17.04.2026, proposing to consider the agenda of

removal of Petitioner No. 1 from the Board of Directors of Respondent No. 1

Company.

11. The matter was taken up on the stay application, and the Tribunal

proceeded to pass an interim Order after hearing the Respondents, and had

passed an interim Order to the following effect:-

" After hearing the parties and considering the nature of the petition, the relationship between the parties, and the fact that the Petitioner is also a founder member, interim relief is granted in favour of the Petitioner. The Respondents are restrained from removing Petitioner No. 1 from the Board of Directors of Respondent No. 1 by holding EOGM till the next date of hearing..."

12. The other Respondents put in appearance and filed their objections in

the shape of a reply to the Company Petition. To the reply submitted by the

Respondent on 03.06.2026, the Appellant responded to it by filing a

rejoinder affidavit before the Tribunal. The said rejoinder affidavit was

prepared by the Appellant on 08.07.2026, and when the same was sought to

be placed on record in response to the reply filed by the Respondent, the

Tribunal, on 09.07.2026 itself, proceeded to vacate the stay Order dated

16.04.2026, observing thereof that the Appellant, under the garb of the

interim Order dated 16.04.2026, had been attempting to draw an undue

advantage by informing the Bank of the pending disputes between the

parties and was attempting to freeze the accounts of the Respondent's

4 of 8 Company. It was alleged by the Respondent that, on account of the aforesaid

acts, the interim Order dated 16.04.2026 was being misutilised by the

Appellant, thereby causing impediment in the operation of the Bank

Accounts of the Company. Thus Tribunal proceeded to vacate the stay

16.04.2026 on same day i.e., 09.07.2026, without providing an appropriate

opportunity, thus violated principles of natural justice.

13. To the aforesaid argument in the shape of allegation advanced by the

learned counsel for the Respondent before the learned NCLT, the Appellant

sought time to obtain instructions from the client with regard to the

allegations so as to effectively rebut the same and also to file a rejoinder. It

is reiterated that both the filing of the counter and the rejoinder were

simultaneous. While interpreting the effect of the Interim Order, in an ex-

parte manner, the learned Tribunal observed that the Interim Order dated

16.04.2026 should not have been construed by the Appellant, and

permitting the same to be projected before the Bank in the manner as

observed in the Order so as to stop the operation of the bank accounts of

Respondent No. 1 Company. Hence, the stay was vacated.

14. Thus, the instant Company Appeal, when it was taken up at the

admission stage on 06.08.2026, notices were issued to the Respondents by

an Order passed by us on 06.08.2026. The Appellant has taken steps, and

there is a report of the Registry that all the Respondents have been served

with the notices. Despite service, none appears to contest the Appeal. In the

subsequent proceedings held before this Tribunal on 01.09.2026, while

taking note of an effective service of notice upon the Respondents and

5 of 8 granting time in order to enable the Respondents to appear and file their

counter, despite the same, none appeared today. Hence, we proceed to

consider the Appeal on its merits.

15. A very short issue which has been argued by the learned counsel for

the Appellant in the context of the Impugned Order dated 09.07.2026 is that

the Impugned Order happens to be in utter derogation of the basic

principles of adjudication, that is, adherence to the principles of natural

justice, as envisaged to be ensured by the provisions contained under

Section 424 of the Companies Act, 2013. It is contended by the Appellant

that on the date when the counter was filed, and in response to which the

Appellant had sought time to file a rejoinder, at that point of time, a

unilateral stand taken by the Respondents was considered by the Tribunal

for vacating the interim Order. The stand taken by the Respondents was

unilaterally accepted without providing the Appellant any opportunity of

hearing as such. Nor did the Tribunal provide any opportunity to the

Appellant, despite his request, to complete his instructions as regards the

set of allegations levelled by the Respondents about the misuse of the

interim Order dated 16.04.2026.

16. It is a settled principle that when a Tribunal is taking judicial notice of

any fact argued or pleading raising an allegation, and particularly in the

context hereto, when it is with regard to the Appellant wrongfully portraying

the interim Order dated 16.04.2026 and misutilising the same before the

banking platform, it requires that the Tribunal should have shown its

graciousness by giving an opportunity to the Appellant to submit a rejoinder

6 of 8 and to complete his instructions qua the allegations levelled by the

Respondents before the learned NCLT. A random allegation that has been

levelled in judicial proceedings requires a rebuttal to test its sanctity, as the

Appellant could not have been subjected to adverse order unilaterally.

Accepting a stand in the shape of an allegation of misusing the interim

Order, it was necessary rather inevitable too that, before any credence was

placed by the learned Tribunal on the allegations levelled by the

Respondents, the Tribunal ought to have given an opportunity to the

Appellant to rebut the allegation before resorting to any recourse of vacating

the stay Order.

17. Otherwise, in case if the interim order is not permitted to continue, it

would render the 'lis' itself infructuous because if it results into the

succeeding of the act of removal of the Appellant No. 1 from the

Directorship, it would be causing extreme hardship without even testing the

controversy on its merits.

18. Thus, we are prima facie of the view that apparently, in the shape in

which the impugned Order has been passed, it is against the spirit as

envisaged under Section 424 of the Companies Act, 2013, which ensures the

application of the principles of natural justice before condemning any party

to the proceedings. An opportunity ought to have been granted, on this

simpliciter ground that before the learned Tribunal drew an inference, and

believing about the allegation of misutilisation of the interim Order dated

16.04.2026 at the hands of the Appellant, who was the beneficiary of the

Interim Order, it was necessary rather inevitable for the Tribunal, that

7 of 8 before an Order of vacation of stay was passed, the Tribunal ought to have

reasonably provided an opportunity to the Appellant to at least enable him

to complete instructions from his client and to test the sanctity of

allegations of the Respondent.

19. Not providing the said opportunity renders the impugned Order to be

against the spirit of Section 424 of the Companies Act, and in violation of

the principles of natural justice. On this simpliciter count, the Impugned

Order dated 09.07.2026 would stand quashed. The matter is remitted back

to the learned Tribunal to reconsider the vacation of interim Order, if

required, only after considering the rival contentions of the rival parties and

then pass an appropriate Order on the prayer of the Respondents for

vacation of stay.

20. Accordingly, the Company Appeal, for the aforesaid reasons, would

stand allowed. All interlocutory applications would be deemed to be closed.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Arun Baroka] Member (Technical)

[Indevar Pandey] Member (Technical) rashmi/rr

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