2026 Supreme(Online)(NCLT) 2644

NATIONAL COMPANY LAW TRIBUNAL
USAR COMMERCE TECHNOLOGIES PRIVATE LIMITED – Appellant
Versus
Utsav Soi – Respondent
COMP.APPL - 201/2025

Disputes under Sections 241-242 of the Companies Act, 2013, alleging oppression and mismanagement, are non-arbitrable as they involve statutory rights in rem and fall within the exclusive jurisdiction of the NCLT.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 8 and 11 - Companies Act, 2013 - Sections 241, 242, 167, 169, 179(3)(e), 166, 101, and 430 - Disputes raised in a petition under Sections 241-242 of the Companies Act, 2013, alleging oppression and mismanagement, are not amenable to arbitration as they involve rights in rem and statutory violations that fall within the exclusive jurisdiction of the National Company Law Tribunal (NCLT). (Paras 7, 13, 14, 19, 20)

(B) Arbitration and Conciliation Act, 1996 - Section 8 - Scope of reference - The court’s examination at the Section 8 stage is narrow, but reference is not required where non-arbitrability is manifest and ex facie certain, as when the reliefs sought go to the heart of corporate governance. (Para 15)

(C) Companies Act, 2013 - Sections 241 and 242 - Nature of proceedings - Proceedings under these sections are statutory in character and seek remedies of a public nature that cannot be privatized through arbitration; the powers conferred under Section 242 are wide and exclusive to the NCLT. (Paras 14, 16)

(D) Estoppel - Doctrine of approbate and reprobate - The doctrine cannot operate against the provisions of a statute; invoking an arbitration clause by a petitioner does not estop them from arguing that the dispute is non-arbitrable, especially when a statutory remedy is involved. (Para 12) (E) Companies Act, 2013 - Sections 241 and 242 - Non-arbitrability - A petition alleging oppression and mismanagement involves composite rights in rem and in personam that are inseparable and cannot be severed or referred to arbitration, particularly when some parties are not bound by the arbitration agreement. (Paras 13, 16, 19)

Facts of the case:
A company petition under Sections 241-242 of the Companies Act, 2013, was filed before the NCLT, alleging oppression and mismanagement after the termination of a co-founder and director’s employment. The company filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking to refer the disputes to arbitration based on clauses in the Employment Agreement, Shareholders’ Agreement, and Share Subscription Agreement. The petitioner had previously invoked the arbitration clauses but later withdrew the Section 11 petition without liberty. The company argued the petition was a dressed-up contractual dispute, while the petitioner argued the dispute involved statutory violations, including illegal termination, improper vacation of directorship, share dilution, and asset diversion.

Findings of Court:
The NCLT dismissed the Section 8 application, holding that the disputes raised in the company petition were not amenable to arbitration. The court found that the petition involved statutory violations, including improper vacation of directorship, illegal convening of board meetings, and share dilution, which go beyond contractual rights. The court held that such disputes involve rights in rem and require remedies that an arbitral tribunal cannot grant, such as rectification of records and restoration of directorship. The court also noted that some parties were not bound by the arbitration agreement, making composite reference impossible. The court rejected the company’s estoppel argument, finding the doctrine cannot override statutory rights. The interim order previously passed was continued.

Issues: The main issues were whether the disputes raised in the company petition under Sections 241-242 of the Companies Act, 2013, are amenable to arbitration, and whether a party who has previously invoked arbitration is estopped from arguing that the dispute is non-arbitrable.

Ratio Decidendi: The court ruled that disputes of oppression and mismanagement under Sections 241-242 of the Companies Act, 2013, are inherently non-arbitrable as they concern rights in rem affecting corporate governance and involve statutory violations. The court also held that the doctrine of approbate and reprobate cannot be used to defeat a statutory remedy, especially when the dispute involves a mix of arbitrable and non-arbitrable claims, and when some parties are not bound by the arbitration agreement. Result : Application dismissed.

Table of Content
1. application under section 8 seeking referral to arbitration (Para 1 , 2 , 3)
2. applicant and respondent arguments on non-arbitrability (Para 4 , 5)
3. court analysis on non-arbitrability of oppression claims (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18)
4. application dismissed; disputes referred to nclt (Para 19 , 20 , 21)

NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH BENCH, COURT-I, CHANDIGARH In Application under Section 8 of the Arbitration And Conciliation Act, 1996 IN THE MATTER OF USAR Commerce Technologies Private Limited CIN: U47912HR2024PTC122902 Registered Office: We Work BlueOne Square, 246, Phase IV, Industrial Complex, Dundahera, Gurugram – 122016, Haryana E-mail: shlokbhartiya2000@gmail.com … Applicant Versus

1. Utsav Soi Address: A-101, Riverview Apartments, Mayur Vihar Phase-I, Delhi – 110091 DIN: 10685156 E-mail: utsavsoi20@gmail.com ... Respondent No. 1

2. Shlok Bhartiya Chief Executive Officer, DIN: 10685155 Address: 7/121 A, Swaroop Nagar, Katarijiyora, Nawabganj, Kanpur – 208002, E-mail: shlok@shoppin.app … Respondent No. 2

3. Manas Goel Non-Executive Director DIN: 09263499 Office Address: We Work BlueOne Square, 246, Phase IV, Industrial Complex, Dundahera, Gurugram – 122016, Haryana E-mail: shlokbhartiya2000@gmail.com … Respondent No.3

4. IE Venture Investment Fund I C/o Ground Floor, 12A, 94, Meghdoot, Nehru Place, South Delhi – 110019, India E-mail: connect@infoedgeventures.com … Respondent No. 4

5. Registrar of Companies, Delhi

4th Floor, IFCI Tower, 61, Nehru Place, New Delhi – 110019 E-mail: roc.delhi@mca.gov.in … Respondent No. 5 AND IN THE MATTER OF:

Utsav Soi …Petitioner Versus USAR Commerce Technologies Private Limited & Ors.

…Respondents Order delivered on: 29.04.2026 Coram: SH. KHETRABASI BISWAL, MEMBER (JUDICIAL)

SH. SHISHIR AGARWAL, MEMBER (TECHNICAL)

Present:

For the Applicant: Mr. Atul V. Sood, Advocate For the Respondents: Mr. Aalok Jagga, Advocate Mr. Sushant Kareer, Advocate Mr. Suriti Chaudhary, Advocate Mr. Sahil Lohan, Advocate Ms. Arushi Manu, Advocate Mr. Aryaman Jagga, Advocate Mr. Madhav Singhal, Advocate Mr. APS Madaan, Advocate ORDER

1. The present Application has been filed by USAR Commerce Technologies Private Limited (Applicant/the Company) against Mr. Utsav Soi (Respondent No. 1) and other Respondents under Section 8 of the Arbitration and Conciliation Act, 1996, seeking reference of the disputes raised in the Company Petition to arbitration in view of the arbitration clauses contained in the Share Subscription Agreement dated 26.07.2024, the Shareholders’ Agreement dated 26.07.2024 and the Employment Agreement dated 03.08.2024, executed between the parties.

The Applicant seeks the following reliefs:

“a. Dismiss the present Company Petition preferred by the Petitioner and refer the parties to arbitration in terms of Section 8 of the Arbitration and Conciliation Act, 1996;

b. Impose exemplary costs on the Petitioner; and c. Pass any other order as this Hon’ble Tribunal may deem fit in the facts and circumstances of the case.”

Brief Facts

2. Brief facts of the case, as submitted by the Applicant, which are relevant to the issue in question, are as follows:

(i) USAR Commerce Technologies Private Limited ("the Company"/"the Applicant"), bearing CIN: U47912HR2024PTC122902, was incorporated on 27.06.2024 with its registered office at WeWork BlueOne Square, 246, Phase IV, Dundahera, Gurugram – 122016, Haryana. It operates an AI-driven fashion technology platform under the trade name "Shoppin'" and was co-founded by Mr Utsav Soi (Respondent No. 1) and Mr Shlok Bhartiya (Respondent No. 2), the Chief Executive Officer of the Applicant Company.

(ii) It is submitted that on 26.07.2024, the founders and IE Venture Investment Fund II (Respondent No. 4/"InfoEdge"/"Investor") executed two foundational agreements, the Share Subscription Agreement ("SSA"), by virtue of which the Investor subscribed to equity shares and Series Seed CCPS of the Company, and the Shareholders' Agree

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