Unfulfilled family settlement bid terms and disputed documents justify restoring ousted directors in oppression proceedings; administrator may seek forensic examination for buyout disputes.

MEMBER (JUDICIAL)

This appeal has been filed against an impugned order dated 30.09.2025 passed by the Ld. NCLT, Allahabad alleging the Ld. NCLT has restored Respondents No.2, 4 and 5 as directors inspite of ignoring they had handed over their resignation letters to Ld. Mediator, Shri Murari Lal Mathahelia, their real paternal uncle/Phupha, in February, 2008 itself.

2. It is the case of the appellants they have been managing Respondent No.1 company since 2008 i.e. for the last 17 years but by way of the impugned order, the management has been displaced. It is argued Respondent No.1 is a family company and earlier its management was with three groups viz the branches of three brothers i.e., the Vishwanath Group-the appellants; Jagdish Group and Mr. Shambhoo Nath Group, the respondents. The family was doing various businesses and one of it was run by a company namely M/s J.B. Daruka Papers Ltd i.e. Respondent No.1.

3. It was argued there were certain disputes between the parties in 2008 but with the help of Mr. Murari Lal Mathahelia, their real paternal uncle/Phupha, MOU was entered into, though orally and it was agreed there shall be a bid of the company/Respondent No.1, by three groups above and it shall go to the highest bidder. The terms of the bid were reduced in writing on 04.02.2008 and were signed by the parties. Such bidding terms were as under: -

1. Reserve Price of Bid has been decided at Rs. 4.00 Crore, 2. Minimum Bid difference is 1 0.00 Laks between Two Bids, of each Bidder, 3. Terms of payment after Bid finalization are as under: -

a) Loan repayment of Loans of close friends & Relatives - shall be within ·15 days.

b) Payment of Share Capital and other payment shall be- 1. 25% of payment within next 15 days, 2. 25% of Balance within next 15 days, 3. 50% of Balance within next 15 days, but upto 31.03.08.

c) During this period interest @ 12% shall be paid on the payment duration.

d) Bid should be for land, Plant a machinery and Building (all), 4. In case of non-payment after 1.4.08, penal interest @ 36% Per Year shall be charged for first 15 days i.e. upto 15.4.08, and thereafter Penal interest @ 50% Per Year shall be charged on outstanding Payable balance, 5. Personal Guarantee of Directors who are outgoing shall be withdrawn from PNB (Term) Loan before use of Term Loan amount.

6. Interest on loan amount shall be paid upto 15.4.08 for the year ending 31.3.08.

4. It is the alleged the bidding took place on 04.02.2008 and the appellants became the highest bidder and in consequence thereof resignation letters were submitted by the Respondents to their uncle namely Murari Lal, which letters were then deposited with the ROC. Though as per the bid document, as alleged amount of Rs.20.80 crores was payable by the appellants, though is disputed to be Rs.36 crores by the Respondents.

5. It was also argued out of the bid amount, an amount of Rs.2.20,40,000/- was paid by cheque to the respondents and the remaining amount was paid in cash. Reliance thereto was made to an affidavit dated 12.07.2013 of Mr. C.L. Kanoria, the brother of their Phupha, -Sh Murari Lal stating inter alia the balance amounts were paid in cash to the Respondent’s groups.

6. The appellants allege in April, 2009 Respondents came rushing to the Court complaining of various acts viz they never received cash; their resignation letters as well as settlements were all forged and right issue which was issued in the meanwhile, they were not given any notice thereof.

7. Qua the denial of sign