Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLT) 3230

NATIONAL COMPANY LAW TRIBUNAL
Bidisha Banerjee, Member, Siddharth Mishra, Technical Member
Ram Niranjan Kajaria – Appellant
Versus
Anil Plantations Private Limited – Respondent
COMP. APPL. No. 59/KB/2024|CONT. A. No. 7/KB/2025|COMP. APPL. 43/KB/2024|IA (Companies Act)/144/KB/2025|COMP. APPL. No. 56/KB/2025|CP No. 421/KB/2020

Advocates:
For the Appellants/Petitioners: Debesh Panda, Urmila Chakraborty, Sagar Shetty, Ashish Venugopal, Aishwarya Choudhury, Debopriya Mallick
For the Respondents: Ratnanko Banerji, Shaunak Mitra, Sristi Barman Roy, Priti Banerjee, Tanvi Luhariwala, Rahul Poddar

A family settlement is only binding if executed by all relevant stakeholders; partial agreements are void. Furthermore, civil contempt requires 'wilful' disobedience; an action taken in an attempt to seek court approval for a settlement does not constitute contempt.

Headnote:(A) Companies Act, 2013 - Sections 241, 242 and 244 - Civil Contempt - Section 2(b) of Contempt of Courts Act, 1971 - Oppression and mismanagement - Status quo order - Validity of family settlements - Substitution of legal representatives - A family settlement is a recognized legal device to resolve disputes, but it must be entered into bona fide by all parties to the family to be comprehensive and binding. A bilateral or multilateral arrangement between only some members that excludes others cannot constitute a valid settlement (Paras 3.3, 3.5, 3.6). Judicial orders for status quo must be complied with; any transfer of assets in violation of such orders is non-est and cannot confer title (Para 3.15). Civil contempt requires proof of 'wilful' disobedience beyond reasonable doubt, and where two interpretations are possible or where the parties seek judicial permission to implement a settlement, the element of wilfulness is not established (Paras 4.4, 4.5, 4.6, 4.10).

(B) Hindu Succession Act, 1956 - Section 6 - Partition of coparcenary property - Partition must be complete and final to be legally recognized, requiring division by metes and bounds or a court decree. Mere intention or preliminary arrangements do not dissolve a joint family. In the absence of such recognition, the entity is presumed to continue (Paras 5.3, 5.4, 5.7).

Facts of the case:
The case involved a dispute over a company's management, shareholding, and family assets following the death of the patriarch. Various applications were filed regarding the validity of purported family settlement agreements, the substitution of a legal representative for a deceased member of a joint family, and a contempt petition alleging violation of a status quo order concerning shareholding.

Findings of Court:
The court held that the family settlement agreements, being incomplete and excluding certain legal heirs, were not binding. The joint family status remained intact for lack of valid partition. The contempt application was dismissed as the element of 'willful' disobedience was absent, given the parties' attempts to seek judicial modification of the status quo order.

Issues: Whether the company petition remains maintainable despite private settlements, whether the joint family entity survives, and whether there was a willful violation of the status quo order constituting contempt of court.

Ratio Decidendi: A family settlement is void if it does not include all necessary parties, and shared assets under judicial status quo cannot be alienated. Contempt of court is not established where the alleged violation lacks the mental element of 'wilfulness' and the parties were seeking formal judicial permission to implement the transaction.

Result: Company applications dismissed, substitution application allowed, and contempt application dismissed.

Table of Content
1. civil contempt requires strict proof of wilful disobedience. (Para 1 , 2 , 3 , 4)
2. huf status persists in absence of formal partition. (Para 5)

ORDER

Per: CMDE SIDDHARTH MISHRA, HON’BLE MEMBER (TECHNICAL):

1. The Court convened in hybrid mode.

2. Heard Ld. Counsels for the parties.

COMP. APPL. 43/KB/2024

1. The Company Application No. 43/KB/2024 has been preferred by Indira Kejriwal, daughter of Late Ram Niranjan Kajaria, to seek the following reliefs:

“(a) C.P. No. 421/KB/2020 be dismissed;

(b) Order dated February 11, 2020 and all other orders be set aside and/or vacated;

(c) In the alternative and without prejudice to the aforesaid prayers, the order dated February 11, 2020, be suitably modified to permit the transfers and transactions stated in paragraph 9 hereto;

(d) Ad interim orders in terms of prayers above;

(e) Such further and/or other order or orders be passed, direction or directions be given, as Your Lordships may deem fit and proper.”

2. Submissions of the Applicant:

2.1. It is submitted that the Applicant had executed a Power of Attorney dated 16.01.2020 in favour of Petitioner No. 3 for institution and conduct of the proceedings.

2.2. It is further submitted that the Applicant/Petitioner No. 2 is the only shareholder amongst the Petitioners and also represents Petitioner No. 1 as Karta thereof. Further, the remaining Petitioners do not independently hold shares in the Company and therefore is not competent to maintain the present petition under Sections 241 and 242 of the Companies Act, 2013.

2.3. Further that this Hon’ble Tribunal has, on several occasions including by orders dated 22.07.2022, 25.08.2022, 04.04.2024 and 16.05.2024, encouraged settlement between the parties considering the disputes are amongst family members.

2.4. It is further contended that the Applicant is aged about 64 years, suffers from medical ailments and intends to relocate to the United States of America to reside with her son. Further the Applicant has entered into a settlement agreement as stated above with Respondent Nos. 1, 3 and 4 to bring closure and peace and harmony.

2.5. It is further contended that by order dated 11.02.2020, this Hon’ble Tribunal directed status quo with respect to the shareholding and fixed assets of Respondent No. 1 Company.

2.6. It is further alleged that there is no surviving cause of action and therefore the Company Petition should be dismissed.

COMP. APPL. No. 56/KB/2025

1. The Company Application No. 56/KN/2025 has been preferred by Anil Plantations Pvt Ltd. to seek the following reliefs:

“(a) C.P. No. 421/KB/2020 be dismissed;

(b) Order dated February 11, 2020 and all other orders be set aside and/or vacated;

(c) In the alternative and without prejudice to the aforesaid prayers, Petitioner no. 2 be deleted from the array of parties, and all rights emanating from Petitioner no. 2's shareholding in the Respondent no. 1 company (presently held or by right of inheritance to Late Ram Niranjan Kajaria's shares and the Petitioner no. 1's shares), be exercised by the Applicant no. 2 (Respondent no. 3 in the main company petition, being C.P. No. 421/KB/2020);

(d) In the alternative and without prejudice to the aforesaid prayers, the Family Settlements dated August 3, 2024 and TAR November 5, 2024, be recorded and be given effect to;

(e) The order dated February 11, 2020, be suitably modified to permit the transfer and transactions as contemplated in the said Family Settlements dated August 3, 2024 and November 5, 2024, as stated in paragraph 23 hereinabove;

(f) Ad interim orders in terms of prayers above;

(g) Such further and/or other order or orders be passed, direction or directions be given, as Your Lordships may deem fit and proper.”

2. Submissions of the Applicants:

2.1. It is submitted that after the demise of Late Shri Ram Niranjan Kajaria, the alleged HUF stood dissolved pursuant to a letter dated 6 January 2020 jointly issued by Petitioner Nos. 2, 3 and 4.

2.2. It is further submitted that t

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2026 Supreme(Online)(NCLT) 3230

A family settlement is only binding if executed by all relevant stakeholders; partial agreements are void. Furthermore, civil contempt requires 'wilful' disobedience; an action taken in an attempt to seek court approval for a settlement does not constitute contempt.

Cases Referred (8)