ORDER

1. The Petitioner, Eros International Media Limited, filed the main Company Petition bearing CP No. 121 of 2025, contending that pursuant to the term sheet dated 22.01.2014 executed between Eros International Media Limited and Aanand L. Rai (Applicant/Original Respondent No. 2) and Yogita Rai (Original Respondent No. 3), the Petitioner acquired an aggregate 50% shareholding, held by Original Respondent Nos. 2 and 3, in Colour Yellow Productions Pvt. Ltd. (Company/Original Respondent No. 1).

2. Under the Term Sheet, it was agreed between the Parties that exclusive control over the creative aspect of films was vested with the Original Respondent No. 2. The Petitioner was conferred the authority to decide on the budget, star-cast, and other production-related aspects of Cinematograph Films and Teleserials. The Original Respondent No. 2 was prohibited from undertaking any business competing with that of Original Respondent No. 1 and was further required to render creative services for the cinematograph films and Teleserials of Original Respondent No. 1.

3. Under the Term Sheet, Original Respondent No. 1 could collaborate with Third Parties only if the Petitioner declined to fund a particular project. Original Respondent No. 2 was entitled to monthly remuneration, to be set-off against his profit share and/or fees payable in his capacity as Creative Director or Director of films. In furtherance of the Term Sheet, the Petitioner appointed Mr. Sunil Lulla as Chairman and Director on the Board of Original Respondent No. 1, alongside Original Respondent Nos. 2 and 3. The Petitioner financed multiple films produced under this collaboration over a period of time. However, disputes and differences arose between the Petitioner and Original Respondent No. 2 during the years 2019–2020.

4. A Board meeting was convened on 29.11.2019 in an attempt to sort out the differences; however, the differences only magnified. A notice was thereafter issued by the Petitioner bringing to the notice of Original Respondent No. 2 several acts of mismanagement of the affairs of the Company, specifically alleging that Original Respondent No. 2 was utilising Original Respondent No. 1 as a conduit to advance personal interests at the expense of the Company.

5. By letter dated 16.11.2021, Original Respondent No. 2 invoked the termination of the Term Sheet and also invoked the arbitration clause thereunder for adjudication of the disputes between the parties. The Petitioner, by its letter dated 30.11.2021, objected to the wrongful and unilateral termination of the Term Sheet by Original Respondent No. 2.

6. Thereafter, multiple rounds of meetings were held between the parties, and ultimately another agreement was executed between the Parties on 23.08.2023, by which the disputes, particularly regarding assignments undertaken by Original Respondent No. 2 with Third Parties, were resolved and the arbitration clause was renewed afresh. Needless to mention, the Term Sheet contained a specific clause of arbitration in the case of differences or disputes between the parties.

7. The Petitioner had engaged an independent Chartered Accountant, M/s A.P. Rajagopalan & Co., to conduct a scrutiny of the Financial Statements of Original Respondent No. 1 Company. Upon examination, the Chartered Accountant submitted a report highlighting various instances of related party transactions undertaken by Original Respondent Nos. 2 and 3, and further identified non-compliance with the provisions governing related party transactions under Section 188 of the Companies Act, 2013.

8. It is contended that Original Respondent Nos. 2 and 3, subsequent to the execution of the Term Sheet, continued to hold and exercise majority control over the Board of Original Respondent No. 1. The day-to-day operations and finances of Original Respondent No. 1 were managed exclusively by Original Respondent Nos. 2 and 3, and despite repeated requests, the Petitioner was not furnished with the relevant information