2026 Supreme(Online)(NCLT) 2830

NATIONAL COMPANY LAW TRIBUNAL
Nilesh Sharma, MEMBER (J), Charanjeet Singh Gulati, MEMBER (T)
Ravinder Pal Singh Tuli – Appellant
Versus
Tuli Hotels Private Limited – Respondent
CA/370/2025 | C.P. No.276(MB)/2023

The rectificatory jurisdiction under Section 59 of the Companies Act, 2013 is summary in nature and cannot be invoked when the share transfer arises from an arbitral award being challenged in competent civil proceedings, as it involves disputed civil rights. (Para 28)

Headnote:

(A) Companies Act, 2013 - Section 59 - Rectification of register of members - NCLT Rules, 2016 - Rules 11 and 70 - Nature of jurisdiction - The rectificatory jurisdiction under Section 59 is summary in nature and not intended to be exercised where there are contested facts and disputed questions. (Paras 17-18, IFB Agro Industries Ltd. v. SICGIL India Ltd. and Ors.)

(B) Arbitration and Conciliation Act, 1996 - Section 34 - Challenge to arbitral award - Arbitration and Conciliation Act, 1996 - Section 36 - Enforcement of award - An arbitral award has the force of a civil court decree - Transfer of shares effected pursuant to an arbitral award cannot be questioned under the provisions of the Companies Act relating to ordinary share transfers. (Paras 27, 17)

(C) Companies Act, 2013 - Section 56 - Procedure for transfer of securities - The provisions of Section 56 do not govern transfer of shareholding carried out in compliance with an order or decree of a civil court. (Paras 25, 27)

Facts of the case:
A petition was filed under Section 59 of the Companies Act, 2013 seeking a declaration that the transfer of 30,000 shares of a company in favour of one of the respondents was null and void, a declaration that the board resolution dated 09.07.2022 for the transfer was void, and a direction for rectification of the register of members. The transfer was purportedly made in compliance with arbitral awards passed in a family dispute. The petitioner had challenged these awards under Section 34 of the Arbitration and Conciliation Act, 1996 before a District Court. The competent court had stayed the operation of the arbitral awards. The respondents contended that the petition was not maintainable as the issues arose from the arbitral awards and were pending adjudication before the competent court under the Arbitration Act.

Findings of Court:
The Tribunal held that the petition seeking rectification of the register of members could not be entertained. It found that the issues raised were intrinsically connected with the validity and effect of the arbitral awards, which involved substantive and contested civil disputes falling within the jurisdiction of the civil court under the Arbitration Act. Since the validity and enforceability of the arbitral awards were already sub judice before the competent court, entertaining the present petition would amount to parallel adjudication. The petition was dismissed as not maintainable.

Issues: The main issues were whether the Tribunal could exercise its summary jurisdiction under Section 59 for rectification of the register of members when the share transfer was based on an arbitral award challenged under Section 34 of the Arbitration Act, and whether the petition constituted an attempt at forum shopping.

Ratio Decidendi: The court ruled that Section 59 confers only a limited and summary jurisdiction for rectification of the Register of Members. Where the omission or entry arises out of a substantive civil dispute involving competing claims or disputed rights, the matter falls outside the limited ambit of rectification proceedings. The existence of parallel proceedings before a competent court regarding the same subject matter renders the petition under Section 59 not maintainable.

Result: Petition dismissed. Application challenging maintainability disposed of as infructuous.

Table of Content
1. petitioner's share transfer dispute under section 59. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. arbitral award effect on share transfer legality. (Para 7 , 8 , 9 , 10)
3. respondents' submissions on arbitral award implications. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21)
4. summary jurisdiction under section 59 is limited. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 31 , 32)
5. petition dismissed; ca becomes infructuous. (Para 33 , 34)

ORDER

C.P. No.276(MB)/2023

1. The present Petition has been filed by Mr. Ravinder Pal Singh Tuli, (“Petitioner”), under Section 59 and other applicable provisions of the Companies Act, 2013 (“the Act”) r/w Rule 11 and 70 of the NCLT Rules 2016 (“NCLT Rules”) seeking declaration of transfer of the 30000 shares of Rs.100/- each of Respondent no.1 Company made in favour of Bachiter Singh Tuli (“Respondent No.2”) as null and void, declaration of the resolution dated 09.07.2022 passed by the board of directors of the Respondent no.1 Company in the second meeting for the FY 2022-23 with respect to the transfer of 30000 shares of the Petitioner as null/void and illegal, declaration of the Form no.MGT-14 filed by the Respondent no.1 Company with respect to transfer of 30000 shares of the Petitioner as null, void, illegal and bad in law and further to direct the Respondent no.1 Company to rectify the Registrar of Members with respect to 30000 shares in favour of the Petitioner. Furthermore, seeking to direct the Registrar of the Companies, Mumbai (“Respondent no.6”) to invalidate the annual returns and Form no. MGT-14 with respect to transfer of 30000 shares of the Petitioner and to impose exemplary cost on the Respondents.

Description of Parties :

2. The Petitioner, is a shareholder in Tuli Hotels Private Ltd (“Respondent no.1 Company”) holding 30000 shares, i.e. 11.407% of the total issued and paid up share capital of 263000 shares of Rs.100/- each of the Company before such 30000 equity shares of Petitioner were transferred to Respondent No. 2.

3. The Respondent No.1, is a Private Limited Company incorporated under the Companies Act, 1956 and is carrying business of hotels and restaurants. The Respondents no.2 to 5 are the directors of the Respondent no.1 Company.

The Respondent no. 6 is the Registrar of the Companies, Mumbai.

Facts as per the Petition in brief :

4. The present Company Petition is filed under Section 59 of the Act seeking rectification of the Register of Members of Respondent No.1 Company and for setting aside the transfer of 30,000 equity shares (“impugned transfer”) belonging to the Petitioner, which was done without the Petitioner’s knowledge and consent.

5. The Petitioner submits that he is a shareholder Respondent No.1 Company, holding 30,000 equity shares of Rs.100 each, which constituted approximately 11.40% of the total issued and paid-up share capital of the Company prior to the impugned transfer. The Petitioner submits that the shareholders of the Respondent no.1 Company are the members of the Tuli Family and they are carrying on other various business either jointly or individually.

6. At the time of the incorporation of the Company, the authorized share capital of the Company was Rs.2,50,000/- divided into 2500 equity shares of Rs.100/- each. The paid up capital of the Company was Rs.15000/-, out of which Gurlal Singh Tuli (Petitioner’s father) held 25 shares amounting to Rs.2500/-. The Company has increased its authorised share capital from time to time. Mr. Gurulal Singh Tuli at the time of his death on 05.06.2020, was holding 30000 equity shares, out of the Total paid-up share capital of 263000 of Rs.100/- each. After Mr. Gurulal Singh Tuli’s death, the shares were transferred in the name of the Petitioner. The following is the list of shareholders of the Company as on 31.03.2022:

7. Disputes arose between the Tuli family members, which were referred to the Arbitral Tribunal comprising of three Arbitrators and one Advisory consultant. The Arbitral Tribunal ha

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