Issues: Whether a person can be treated as a member of a company for the purposes of Sections 397 and 398 of the Companies Act, 1956, despite the absence of formal entry of his name in the register of members.

Analysis: The expression "member" in Section 2(27) has a wider ambit, while Section 41 lays down the modes by which membership may arise. The jurisdiction under Sections 397 and 398 is equitable in nature and is intended to protect shareholders against oppression and mismanagement. Membership for the purpose of maintainability cannot be confined in a rigid or technical manner to formal entry in the register where the company's conduct and contemporaneous materials show that the person was treated as a stakeholder or shareholder. On the facts, the respondent's investment was accepted and utilised, contemporaneous correspondence and conciliation material recognised his proprietary interest, and the company's conduct supported the conclusion that he had been treated as a member.

Conclusion: The respondent was entitled to be treated as a member for the purpose of maintaining proceedings under Sections 397 and 398, notwithstanding the absence of formal entry in the register of members.

Ratio Decidendi: For proceedings under Sections 397 and 398 of the Companies Act, 1956, the term "member" is not restricted to formal registration alone and may be established by the company's recognition of the person's shareholder status and substantive proprietary interest.

Issues: Whether the impugned orders should be kept in abeyance to facilitate implementation of the approved settlement scheme for payment to investors, and what consequential directions were for effective implementation.

Analysis: The scheme had been approved by the concerned tribunals and this Court, and its stated object was to ensure payment of the settlement amount to entitled investors through an escrow mechanism under supervisory control. The Court noted that continued operation of the impugned orders and the need for further orders from designated courts and authorities could impede implementation. Considering the appellants' stated willingness to carry out the scheme in earnest, the Court directed that the impugned orders be kept in abeyance and that all concerned courts and authorities act expeditiously to enable implementation. The Court also fixed a timeline for deposit or transmission of the settlement amount into the escrow account after de-freezing of the relevant accounts.

Conclusion: The impugned orders were kept in abeyance and directions were issued to facilitate prompt implementation of the settlement scheme, which was in favour of the appellants.

Final Conclusion: The order enabled implementation of the approved settlement mechanism for investor payment by suspending the operation of the impugned orders and issuing coordinating directions to the concerned courts and authorities.

Ratio Decidendi: Where an approved settlement scheme is intended to secure payment to entitled stakeholders, the Court may keep conflicting orders in abeyance and issue ancillary directions to ensure timely implementation of the scheme.

Issues: Whether the interim arrangement preserving the subject matter of the dispute should continue and the scope of interim protection to be maintained pending adjudication of the Company Petition under Sections 241, 242, 244 and 59 of the Companies Act, 2013.

Analysis: The Court confined its consideration to interlocutory relief necessary to preserve the project land and attendant development rights until the NCLT finally adjudicates the pending Company Petition. Having reviewed the sequence of interim orders passed by appellate and this Court, the Court noted ongoing proceedings before the NCLT and subsequent developments including initiation of insolvency proceedings against a transferee and limited protective works permitted earlier. The Court determined that the paramount interest is to prevent alteration of the nature of the property or creation of further third-party interests which could render the substantive remedy ineffectual, and that the existing interim arrangement should continue while the statutory forum decides the merits. The Court therefore modified the impugned NCLAT order to direct maintenance of status quo as per earlier orders and directed the NCLT to proceed expeditiously with the Company Petition.

Conclusion: The interim arrangement preserving the subject matter shall continue; parties shall maintain status quo in terms of this Court's earlier orders and shall not take steps altering the property or creating further third-party interests; the impugned NCLAT order dated 11.10.2022 is modified accordingly and will operate until disposal of the Company Petition.

Issues: (i) Whether the reduction of share capital under Section 66 of the Companies Act, 2013 and the procedure followed (notice, disclosure and independence of valuer) were vitiated by procedural infirmity or bias; (ii) Whether the valuation method applied, specifically the use of Discount for Lack of Marketability (DLOM), and the price fixed for minority shareholders was unreasonable or perverse, warranting interference by this Court.

Issue (i): Whether the procedure followed for reduction of share capital, including the notice, retention of valuation and fairness reports at the registered office, and the appointment of a valuer allegedly related to the internal auditor, amounted to procedural infirmity or bias invalidating the scheme.

Analysis: The Court examined statutory requirements under Section 66 and related provisions, the contents of the notice, availability of valuation and fairness reports at the registered office, participation and voting by identified shareholders, the NCLT/NCLAT scrutiny and findings, and the evidence regarding connections between the valuer and the internal auditor. The Court noted that Section 66 does not mandate a valuation report, that the company had nonetheless obtained a valuation and a fairness report, that the reports were available for inspection and some shareholders inspected them, and that the NCLT and NCLAT examined objections and issued concurrent findings. On the question of valuer independence, the Court applied the legal standard that bias must be demonstrably real and found no real danger of bias, noting independent affirmation of the valuation by unrelated agencies and compliance with accounting certification requirements.

Conclusion: Against the appellants. The Court held that there was no procedural infirmity or demonstrable bias that vitiated the reduction of share capital or justified interference.

Issue (ii): Whether the valuation and the application of DLOM in fixing the exit price were unreasonable or perverse so as to warrant judicial interference under Section 423 of the Companies Act, 2013.

Analysis: The Court considered statutory scheme, applicable accounting and valuation standards (including Ind AS 113 and ICAI valuation guidance), precedent on DLOM (including foreign decisions and scholarly commentary), the factual matrix of BTL (delisted, sole business being investment in a listed subsidiary, history of rights issue and prior offers), and the NCLT/NCLAT findings. The Court observed that valuation is context sensitive, that Ind AS treats fair value as market-based and permits consideration of marketability, and that ICAI standards recognise DLOM as an adjustment requiring consideration of asset characteristics. The Court applied established tests for interference: whether the scheme is unfair or inequitable, whether the valuation is egregiously wrong or perverse, and whether there is demonstrable prejudice. Having regard to prior offers, the rights issue, independent confirmations, and the NCLT/NCLAT scrutiny, the Court found the valuation rationale plausible and not so unreasonable as to offend judicial conscience.

Conclusion: Against the appellants. The Court held that the application of DLOM and the resultant price were not perverse or egregiously unreasonable and did not justify setting aside the reduction.

Final Conclusion: The appeals are dismissed. The Court affirmed the concurrent findings of the NCLT and the NCLAT that the reduction of share capital and the valuation methodology did not suffer from procedural invalidity or such perversity as to warrant interference under Section 423 of the Companies Act, 2013.

Ratio Decidendi: Where Section 66 of the Companies Act, 2013 permits reduction of share capital without a mandatory valuation report, the Court will not interfere with a statutory reduction confirmed by the Tribunal unless the valuation or process is demonstrably unfair, perverse, or vitiated by real and present bias; adjustments for lack of marketability may be applied consistent with applicable accounting and valuation standards and judicial interference is limited to cases of egregious unreasonableness or perversity.

Issues: Whether the impugned order of the National Company Law Appellate Tribunal suffered from any error of law or fact warranting interference in appeal.

Analysis: The appeal was considered on the basis of the factual and legal matrix placed before the Court. The Court recorded that, on such consideration, the National Company Law Appellate Tribunal had not committed any error of law or fact.

Conclusion: No interference was called for and the appeal was dismissed.

Issues: (i) Whether cognizance of offences under Sections 448 and 451 of the Companies Act, 2013 could be taken on a private complaint in view of the statutory scheme and the bar under Section 212(6); (ii) If the proceedings under the Companies Act are quashed, whether the IPC offences can also survive before the Special Court in light of Section 436(2); (iii) Whether continuation of the criminal proceedings amounts to abuse of process warranting interference under Section 482 of the Code of Criminal Procedure, 1973.

Issue (i): Whether cognizance of offences under Sections 448 and 451 of the Companies Act, 2013 could be taken on a private complaint in view of the statutory scheme and the bar under Section 212(6).

Analysis: Section 448 does not create a standalone punishment; it makes the person making a false statement liable under Section 447, which is the punishment provision for fraud. The phrase "offence covered under Section 447" in Section 212(6) is wide enough to include an offence under Section 448 because the latter is inextricably linked to Section 447. Once the statute requires the punishment provision to be invoked as part of the offence, cognizance cannot be taken merely on a private complaint when the second proviso to Section 212(6) mandates a complaint by the Director, Serious Fraud Investigation Office, or an authorised Central Government officer. As Section 451 is derivative and is founded on the continuing cognizance of the underlying offence, it cannot stand independently in the present setting.

Conclusion: Cognizance on a private complaint was barred for the offences under Sections 448 and 451, and the proceedings to that extent were liable to be quashed.

Issue (ii): If the proceedings under the Companies Act are quashed, whether the IPC offences can also survive before the Special Court in light of Section 436(2).

Analysis: Section 436(2) permits a Special Court trying an offence under the Companies Act to also try an offence other than one under that Act which may be charged at the same trial. Once the Companies Act offences are quashed, the Special Court no longer retains the statutory basis to continue with the IPC offences. The complaint, however, is not extinguished; it must proceed before the court having territorial jurisdiction.

Conclusion: The IPC offences could not continue before the Special Court after quashing of the Companies Act offences, and the complaint was required to be transferred to the appropriate territorial court.

Issue (iii): Whether continuation of the criminal proceedings amounts to abuse of process warranting interference under Section 482 of the Code of Criminal Procedure, 1973.

Analysis: The existence of parallel civil suits and a company petition does not by itself render the criminal complaint an abuse of process. On the facts, the allegations relating to forgery, false corporate filings and wrongful assumption of control disclosed a criminal dimension that could not be brushed aside merely because related civil and company law proceedings were pending. Interference under Section 482 was therefore not justified in relation to the IPC allegations.

Conclusion: The proceedings were not liable to be quashed as an abuse of process insofar as the IPC offences were concerned.

Final Conclusion: The challenge succeeded only in part: the company-law offences founded on the private complaint could not be sustained, while the criminal allegations under the IPC were left to be tried by the competent court after transfer.

Ratio Decidendi: Where a company-law offence is statutorily linked to punishment under Section 447 of the Companies Act, 2013, cognizance cannot be taken on a private complaint in the face of the specific bar in Section 212(6); such linkage cannot be circumvented by omitting the punishment provision at the stage of cognizance.

1. ISSUES PRESENTED AND CONSIDERED

1) Whether the Company Law Board (a quasi-judicial body) had jurisdiction to condone delay in filing an appeal under Section 58(3) of the Companies Act, 2013, including by invoking the Limitation Act, 1963 or by applying the "principles" underlying Section 5 of the Limitation Act, 1963, or by relying on inherent powers under the CLB Regulations.

2) Whether Section 433 of the Companies Act, 2013 (making the Limitation Act applicable to proceedings/appeals before the NCLT/NCLAT) could be applied retrospectively or otherwise used to validate condonation of delay by the CLB for a Section 58(3) appeal filed before the constitution of the NCLT/NCLAT.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: CLB's power to condone delay under Section 58(3) of the Companies Act, 2013

Legal framework (as discussed by the Court): The Court examined that, during the relevant period, the CLB's powers as a "court" were limited to those expressly enumerated under the then-governing provision conferring CPC-type powers, and there was no provision empowering the CLB to apply the Limitation Act, 1963 or to extend limitation for filing a statutory appeal under Section 58(3). The Court also examined the distinction between (i) statutory inclusion of Limitation Act powers, and (ii) attempting to import "principles" of limitation without such statutory conferral.

Interpretation and reasoning: The Court held that the Limitation Act, 1963 applies to courts and not to quasi-judicial bodies unless the statute expressly provides otherwise. The CLB, being a quasi-judicial body and only a "court" in a restricted sense for specified purposes, could not assume Section 5 power. Further, the Court rejected the argument that "principles" underlying Section 5 could be applied by analogy, distinguishing Section 5 (extension of limitation through discretionary condonation) from provisions like Section 14 (exclusion of time), whose principles have been applied in limited contexts because exclusion does not involve discretionary enlargement of the limitation period itself. Because condonation under Section 5 depends upon discretionary enlargement of time-an attribute that must be specifically conferred-the Court ruled that such power cannot be inferred for the CLB. The Court also held that Regulation 44 (inherent powers) could not be used to override or circumvent a statutory limitation period for instituting the proceeding itself, as there is no inherent power to extend limitation absent legislative authorization.

Conclusions: The CLB lacked authority to condone delay in filing a Section 58(3) appeal. Neither Section 5 of the Limitation Act nor its underlying principles could be invoked, and inherent powers under the CLB Regulations could not be used to extend a statutory filing period. The limitation period in Section 58(3) was treated as mandatory and not merely directory.

Issue 2: Retrospective application or pendency-based application of Section 433 of the Companies Act, 2013 to validate CLB condonation

Legal framework (as discussed by the Court): The Court considered the phased commencement of the Companies Act, 2013 provisions and noted that Section 433 came into force when the NCLT/NCLAT were constituted. It addressed whether this later provision could retrospectively empower the CLB or be applied because an appeal was pending.

Interpretation and reasoning: The Court held that Section 433 could not be "borrowed" to confer Limitation Act powers on the CLB, because the applicability of limitation provisions is institution-specific and depends on express legislative conferral. The timing of Section 433's commencement alongside the creation of NCLT/NCLAT showed a conscious legislative choice not to clothe the CLB with such power earlier. Additionally, on the facts, the Court found the remedy had already become time-barred even under the prior regime before Section 58(3) itself came into force; therefore, a later change empowering a different forum could not revive a dead remedy or defeat accrued rights.

Conclusions: Section 433 was not retrospectively applicable to the CLB and could not validate condonation of delay for a Section 58(3) appeal filed before the NCLT/NCLAT framework. The change in law could not revive an already time-barred remedy.

Issues: (i) whether the company petition under Sections 397 and 398 of the Companies Act, 1956 was maintainable in view of Section 399; (ii) whether the Tribunal had jurisdiction to decide the validity of the gift deed and the connected transfer of shares; (iii) whether the appellant established oppression and mismanagement, including the invalidity of the gift deed, share transfer forms, and board meetings.

Issue (i): whether the company petition under Sections 397 and 398 of the Companies Act, 1956 was maintainable in view of Section 399

Analysis: The petition was held maintainable by the Tribunal on the pleaded facts and material on record. The complaint rested on alleged fraud, coercion, and fabrication of documents affecting the appellant's status in the company. The Court concurred with that reasoning and treated the challenge under Section 399 as not defeating the petition in the circumstances.

Conclusion: The company petition was maintainable and this issue was answered in favour of the appellant.

Issue (ii): whether the Tribunal had jurisdiction to decide the validity of the gift deed and the connected transfer of shares

Analysis: Proceedings for oppression and mismanagement confer wide powers on the Tribunal to adjudicate matters that are incidental or integral to the complaint and to mould effective relief. The validity of the gift deed and the ensuing share transfer was central to the dispute, and there was no separate statutory bar excluding such determination in these proceedings.

Conclusion: The Tribunal had jurisdiction to decide the validity of the gift deed and the share transfer, and the contrary view was rejected.

Issue (iii): whether the appellant established oppression and mismanagement, including the invalidity of the gift deed, share transfer forms, and board meetings

Analysis: The gift deed was found inconsistent with the company's articles and the surrounding circumstances made the transfer suspect. The share transfer forms showed expiry-related defects, overwriting, and date mismatches. The board meetings of 15.12.2010 and 17.12.2010 were invalid for want of proper notice and quorum. Taken together, these acts demonstrated conduct lacking probity and fairness and showed prejudice to the appellant's rights as a shareholder and director.

Conclusion: The appellant established oppression and mismanagement, and the challenged gift deed, share transfer, and board resolutions were not sustainable.

Final Conclusion: The appellate interference with the Tribunal's decision was unwarranted, and the relief granted by the Tribunal stood restored on the merits of the oppression and mismanagement claim.

Ratio Decidendi: In a petition for oppression and mismanagement, the Tribunal may determine issues that are integral to the complaint, including the validity of a transfer instrument and related corporate acts, and may grant wide relief where the impugned conduct is shown to be lacking in probity, fairness, notice, or quorum.

Issues: Whether a review or recall of an order passed in proceedings initiated under Section 340 of the Code of Criminal Procedure, 1973 is permissible, and whether a review under Order XLVII of the Code of Civil Procedure, 1908 could be entertained in such criminal proceedings.

Analysis: Proceedings under Section 340 of the Code of Criminal Procedure, 1973 are criminal in nature and are governed by the CrPC as a self-contained code. Once a judgment or final order is signed, Section 362 of the CrPC bars alteration or review except to correct a clerical or arithmetical error, or where a different power is expressly conferred by law. A criminal court becomes functus officio after disposal, and the bar cannot be bypassed by invoking Section 482 of the CrPC. Only a limited procedural recall is recognised in exceptional circumstances such as lack of jurisdiction, fraud, or a mistake of court causing prejudice, and not a substantive review on merits. The application for review under Order XLVII of the Code of Civil Procedure, 1908 was not maintainable in criminal proceedings under the CrPC. The ground relied upon for recall was available earlier and did not justify reopening the concluded order.

Conclusion: The recall and review of the earlier criminal order was impermissible, and the impugned order could not be sustained. The challenge succeeds in favour of the appellants.

Ratio Decidendi: A final order in criminal proceedings cannot be reviewed or altered except within the narrow statutory exceptions, and a civil-law review mechanism cannot be imported into proceedings governed by the CrPC.

Issues: Whether the appellant was entitled to bail on the ground of parity with his brother and in view of the length of incarceration, in connection with offences under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002.

Analysis: The appellant had undergone substantial incarceration and his brother had already been granted bail by the High Court in relation to the connected ECIRs. The appellant had also been granted bail in respect of one ECIR by the same order. On that basis, denial of parity was not justified. Bail was granted with conditions, including deposit of passport, restraint on travel outside India, no attempt to influence witnesses, cooperation in expeditious trial, and the consequence that any attempt to delay the trial would result in cancellation of bail.

Conclusion: The appellant was entitled to bail on parity and the appeals were allowed by setting aside the High Court orders.

Issues: (i) Whether anticipatory bail could be granted to accused persons in a serious economic offence case despite repeated non-bailable warrants and proclamation proceedings under Section 82 of the Code of Criminal Procedure, 1973; (ii) Whether the restrictive twin conditions under Section 212(6) of the Companies Act, 2013 apply to bail and anticipatory bail in prosecutions for fraud under Section 447 of the Companies Act, 2013.

Issue (i): Whether anticipatory bail could be granted to accused persons in a serious economic offence case despite repeated non-bailable warrants and proclamation proceedings under Section 82 of the Code of Criminal Procedure, 1973.

Analysis: Economic offences were treated as a distinct and grave class of offences affecting the financial health of the country. The accused persons had avoided execution of warrants, had not submitted to the process of the Special Court, and proclamation proceedings had been initiated against several of them. In such circumstances, the extraordinary power of anticipatory bail was not to be exercised as a matter of course, and the conduct of the accused in evading the process of law was material.

Conclusion: Anticipatory bail was not justified on these facts, and the High Court orders granting such relief were liable to be set aside.

Issue (ii): Whether the restrictive twin conditions under Section 212(6) of the Companies Act, 2013 apply to bail and anticipatory bail in prosecutions for fraud under Section 447 of the Companies Act, 2013.

Analysis: Section 212(6) makes offences covered by Section 447 cognizable and imposes mandatory conditions before release on bail or on bond. The Court treated these conditions as binding in anticipatory bail proceedings as well, and found that the impugned orders had been passed without due regard to those statutory restraints.

Conclusion: The twin conditions under Section 212(6) apply and the impugned grants of anticipatory bail were unsustainable for non-compliance with those statutory requirements.

Final Conclusion: The orders granting anticipatory bail were set aside in the connected matters where the accused had evaded process, while the appeals concerning the three cases already noted by the Court were dismissed; the accused were directed to surrender and seek relief afresh in accordance with law.

Ratio Decidendi: In prosecutions for serious economic offences under Section 447 of the Companies Act, 2013, where warrants have remained unexecuted and proclamation proceedings have been initiated, anticipatory bail is an exceptional relief and cannot be granted without applying the mandatory statutory conditions governing bail.

The core legal issues considered in this judgment are:

• Whether the High Court was correct in clarifying that the property in question was owned by the partnership firm, M/s Hotel Alka Raje, and not by the individual partners.
• Whether the High Court erred by not addressing the appellant's contention that ownership rights in a property cannot be transferred through a relinquishment deed but only through the modes defined in the Transfer of Property Act.
• Whether the property, originally owned by late Bhairo Prasad Jaiswal, became the property of the partnership firm under Section 14 of the Indian Partnership Act, 1932.

ISSUE-WISE DETAILED ANALYSIS

Property Ownership and Section 14 of the Partnership Act

The relevant legal framework is Section 14 of the Indian Partnership Act, 1932, which states that the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired by or for the firm.

The Court interpreted Section 14 to mean that any property brought into the firm by a partner becomes the perpetual property of the firm. The Court found that the hotel property, initially acquired by late Bhairo Prasad Jaiswal and later developed into a hotel, was contributed to the partnership firm, M/s Hotel Alka Raje, as his share. This contribution was evidenced by the construction of the hotel on the land after the formation of the partnership.

The Court relied on the precedent set in Addanki Narayanappa v. Bhaskara Krishnappa, which held that property brought into a partnership ceases to be the individual asset of the partner and becomes the property of the partnership firm. The Court also referenced the Full Bench decision of the Madras High Court in The Chief Controlling Revenue Authority vs. Chidambaram, which supported the view that a partner could bring property into the partnership without any formal document, and it would become the property of the firm.

The Court concluded that the property had become the firm's property when late Bhairo Prasad Jaiswal started constructing the hotel, clearly indicating his intention to contribute the land and building to the partnership.

Relinquishment Deed and Transfer of Property

The appellant contended that ownership rights in property cannot be transferred through a relinquishment deed. However, the Court found that this issue was not central to the case because the property had already become the firm's property by virtue of Section 14 of the Partnership Act. The Court noted that the High Court's clarification was correct in stating that the property was owned by the firm alone, and the relinquishment deed was not necessary to transfer ownership to the firm.

The Court did not find it necessary to separately address the legal aspects of the relinquishment deed since the property had already been contributed to the partnership firm, making the relinquishment deed redundant in this context.

SIGNIFICANT HOLDINGS

The Court held that the property in question was indeed the property of the partnership firm, M/s Hotel Alka Raje, as per Section 14 of the Indian Partnership Act, 1932. The Court affirmed the High Court's clarification that the property should be read as being owned by the firm alone, not by the individual partners.

The Court emphasized that the intention of late Bhairo Prasad Jaiswal to contribute the property to the firm was clear from his actions of constructing the hotel on the land after forming the partnership.

The Court dismissed the appeal, finding no reason to interfere with the High Court's order, as there was no error in the High Court's interpretation and application of the law regarding partnership property.

In conclusion, the Court upheld the principle that property brought into a partnership becomes the property of the firm, and any individual claims to such property are extinguished upon its contribution to the partnership. The appeal was dismissed, reinforcing the High Court's judgment that the property was owned by the partnership firm alone.

1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the auction sale conducted under the SARFAESI Act in 2007 was vitiated for want of the statutorily mandated gap between publication of sale notice and the date of sale.

1.2 Whether the amended Rule 9(1) of the Security Interest (Enforcement) Rules, 2002 (substituted in 2016) prescribing a shorter notice period for a second sale could be applied to a sale held in 2007.

1.3 Whether the High Court, in exercise of writ jurisdiction under Article 226 of the Constitution of India, ought to have set aside the auction sale on a technical ground relating to notice period despite long lapse of time, completion of sale, and substantial third-party developments on the property.

1.4 Whether the guarantor's challenge to the auction sale, initiated long after completion of the sale and issuance of the sale certificate, warranted interference or imposition of costs.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 & 2: Validity of auction sale and applicability of amended Rule 9(1)

Legal framework (as discussed)

2.1 The High Court proceeded on Rule 9(1) of the Security Interest (Enforcement) Rules, 2002, both in its unamended form (requiring 30 days' clear notice) and as substituted in 2016 (permitting 15 days' notice for a second sale). It also referred to Section 9 of the General Clauses Act, 1897 for computation of "clear days".

2.2 The High Court held that: (a) the amendment to Rule 9(1) in 2016 is procedural and operates prospectively; (b) therefore, the law applicable in 2007 required 30 days' clear notice; and (c) even assuming arguendo that the amended Rule applied and only 15 days' notice was required, the requirement of "clear" 15 days was not met on the facts when computed under Section 9 of the General Clauses Act.

Interpretation and reasoning

2.3 The Tribunal (DRT) had set aside the sale on the ground that the second publication of sale notice, dated 14.07.2007 and published on 16.07.2007, did not maintain a 30-day gap before sale, and expressed doubts on the timing of the valuation report and absence of demand notice.

2.4 The Appellate Tribunal (DRAT) reversed the DRT, holding, inter alia, that: (a) initially there was a gap of more than 30 days from the first sale notice; (b) the bank could not be held guilty for not maintaining a fresh 30-day gap after the second publication; (c) valuation and other documents were on record; and (d) the guarantor's objections were merely technical and unsupported by bona fide conduct.

2.5 The High Court, while restoring the DRT order, focused exclusively on the computation of clear notice period and, applying Section 9(1) of the General Clauses Act, concluded that there were not even 15 clear days between publication on 16.07.2007 and the dates of tender and sale (30.07.2007 and 31.07.2007 respectively), thereby invalidating the sale.

2.6 The Court noted that the High Court's interference was founded solely on this technical calculation of days and that the High Court did not account for the finality that had attached to the auction sale since 2007 or the subsequent developments on the property.

Conclusions

2.7 The Court did not endorse the High Court's approach of invalidating the sale purely on a technical question of days-counting under the Rules, in the face of long-settled rights and substantial third-party developments on the property.

2.8 The auction sale dated 31.07.2007, and the sale certificate issued on 30.11.2007 in favour of the auction purchaser, were restored and affirmed by setting aside the High Court's judgment and reviving the DRAT's order upholding the sale.

Issue 3: Scope of writ jurisdiction under Article 226 and discretionary interference with settled auction sales

Legal framework (as discussed)

3.1 The Court relied on the principles governing exercise of jurisdiction under Article 226 of the Constitution, particularly its discretionary and equitable character.

3.2 Reference was made to the decision in Shiv Shanker Dal Mills v. State of Haryana, which emphasised that the remedy under Article 226 is extraordinary and discretionary, and that courts may grant or withhold relief based on considerations of public interest and equity, even where a legal injury is shown.

Interpretation and reasoning

3.3 The Court observed that interference by a writ court for mere infraction of a statutory provision or norm, if such infraction has not resulted in injustice, is not automatic.

3.4 It reiterated that legal formulations cannot be applied in isolation from the factual realities; equity must temper the administration of law. Even where some illegality or invalidity in an action is found, the High Court can refuse to disturb the action if doing so is necessary to achieve substantial justice.

3.5 The Court held that the High Court erred in treating itself as a conventional appellate court by applying the rule on "clear days" in a purely technical manner, without factoring in:

(a) The auction sale having taken place in 2007.

(b) Full payment of sale consideration (approximately Rs. 24,00,000/-) and issuance of the sale certificate in 2007.

(c) The auction purchaser having been put in possession and having, with sanctioned plans, invested about Rs. 1.5 crores in construction and development on the property.

(d) The long lapse of time before the guarantor's challenge and the absence of earlier objection by borrower or guarantor.

3.6 The Court stressed that, in such circumstances, strict adherence to a technical defect in notice period, to unsettle an otherwise completed transaction and disturb third-party rights, was contrary to the equitable and discretionary nature of writ jurisdiction.

Conclusions

3.7 The Court held that the High Court ought not to have exercised its writ jurisdiction to set aside the auction sale solely on the ground of an alleged defect in notice period, particularly after such a long lapse of time and significant third-party development.

3.8 The High Court's interference was found inconsistent with the principles that Article 226 relief is discretionary, must be moulded to do substantial justice, and should not reduce the writ court to the role of a routine appellate forum on technicalities.

Issue 4: Conduct of the guarantor and consideration of costs

Interpretation and reasoning

4.1 The Court held the guarantor wholly responsible for dragging the auction purchaser into frivolous litigation on a very technical point, noting that:

(a) The borrower and guarantor remained silent until after the auction sale had been concluded and the sale certificate issued.

(b) The guarantor approached the Tribunal only in March 2008, despite the sale and issuance of the sale certificate in 2007.

(c) The challenge was premised on technical objections rather than substantive injustice, while public money of the bank and the bona fide rights of the auction purchaser were at stake.

4.2 The Court noted that it was inclined to impose costs on the guarantor for instituting frivolous litigation but ultimately refrained from awarding costs.

Conclusions

4.3 The guarantor's litigation was characterised as frivolous and technically motivated, unjustifiably jeopardising the auction purchaser's settled rights.

4.4 While no costs were imposed, the appeal was allowed, the High Court's judgment was set aside, and the DRAT's order upholding the auction sale was restored.

Issues: (i) whether the writ petition in public interest was maintainable, including locus standi and delay and laches; (ii) whether the award of the project contract without tender and the delegation of power to levy fees or tolls to the concessionaire were valid; (iii) whether Article 14 of the Concession Agreement read with the formula in Annexure F was opposed to public policy; and (iv) whether the Total Project Cost and returns had been recovered so as to justify continued collection of user fees or tolls.

Issue (i): whether the writ petition in public interest was maintainable, including locus standi and delay and laches.

Analysis: The petition was held to be a genuine public interest challenge brought for the benefit of commuters affected by the toll regime. The association had sufficient interest to approach the Court, and no material was shown to establish proxy litigation or collusion. Delay and laches were not accepted as a bar because the grievance arose from a continuing levy and the cause of action was continuing in nature.

Conclusion: The writ petition was maintainable and the objections based on locus standi, delay and laches failed.

Issue (ii): whether the award of the project contract without tender and the delegation of power to levy fees or tolls to the concessionaire were valid.

Analysis: The award of the project to the concessionaire without any tender or competitive bidding was found to be opaque and inconsistent with the constitutional requirement of fairness and non-arbitrariness in State action. On the statutory scheme, the Authority could authorise collection of fees, but the power to levy fees remained vested in the Authority. The agreement and the Regulations were treated as an impermissible sub-delegation insofar as they attempted to vest the power to levy fees or tolls in the private concessionaire.

Conclusion: The contract award was held to be unfair and the delegation of the power to levy fees or tolls to the concessionaire was invalid.

Issue (iii): whether Article 14 of the Concession Agreement read with the formula in Annexure F was opposed to public policy.

Analysis: The formula for calculating project cost and returns was found to be inherently unreasonable because it allowed compounding of unrecovered amounts, included open-ended expenses, and ensured escalating returns without adequate control. The arrangement was treated as one that enabled unjust enrichment and made the concession commercially oppressive and effectively perpetual. The severability doctrine was applied to excise the offending clause rather than sustain the full arrangement.

Conclusion: Article 14 of the Concession Agreement, read with the formula in Annexure F, was held to be contrary to public policy and severable.

Issue (iv): whether the Total Project Cost and returns had been recovered so as to justify continued collection of user fees or tolls.

Analysis: On the material accepted by the Court, including the independent report, the project cost had substantially been recovered and the concessionaire had earned significant profits. Continued collection of tolls after recovery of costs and substantial profits was treated as unjustifiable, particularly where the public had already borne the burden for years.

Conclusion: The project cost and substantial profits had been recovered, and continued levy and collection of user fees or tolls was not justified.

Final Conclusion: The appeal was found to disclose no ground for interference, and the High Court's substantive directions against continued toll collection were sustained. The issue relating to outdoor advertisement dues was left outside the scope of the appeal.

Ratio Decidendi: In a public infrastructure concession involving State instrumentalities, a private concessionaire cannot be allowed to continue collecting user charges once the project cost and substantial returns have been recovered, and any contractual or regulatory arrangement that is opaque, excessively delegated, or structurally oppressive to the public may be struck down as contrary to Article 14 and public policy.

Issues: (i) Whether shareholder approval under Section 62(1)(c) of the Companies Act, 2013 was mandatory before the equity shares arising from conversion of debt into shares could be accepted for listing. (ii) Whether the refusal to accept the listing request for want of BSE approval under Regulation 28 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was justified.

Issue (i): Whether shareholder approval under Section 62(1)(c) of the Companies Act, 2013 was mandatory before the equity shares arising from conversion of debt into shares could be accepted for listing.

Analysis: Section 9(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 enables conversion of debt into shares, but the conversion in the present case was not an independent act of the asset reconstruction company. The company itself agreed to the conversion, its board resolved to implement the proposal, and it then applied for listing of the additional shares. On those facts, the proposal was treated as one initiated by the company, resulting in an increase of subscribed capital. For such a proposal, a special resolution of shareholders was required under Section 62(1)(c) of the Companies Act, 2013.

Conclusion: Shareholder approval was mandatory and was absent; the objection was valid against the appellant.

Issue (ii): Whether the refusal to accept the listing request for want of BSE approval under Regulation 28 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was justified.

Analysis: The finding that approval of the stock exchange was necessary under Regulation 28 was accepted as correct and not shown to be perverse. In the absence of the requisite shareholder approval and in view of the procedural requirements governing listing, the rejection of the listing request could not be faulted.

Conclusion: The refusal to accept the listing request was justified and stood sustained.

Final Conclusion: The statutory appeal failed on the legal requirements governing conversion of debt into equity and the consequent listing of shares, and the impugned refusal to list the shares was upheld.

Ratio Decidendi: Where a company itself initiates and adopts a debt-to-equity conversion proposal that increases its subscribed capital, shareholder approval by special resolution under Section 62(1)(c) of the Companies Act, 2013 is mandatory before the resulting shares can be accepted for listing.

Issues: (i) Whether the direction to constitute a High Powered Committee and to reconsider renewal of the mining leases could be sustained; (ii) whether the renewal applications or the leases themselves survived so as to justify continued consideration of renewal; (iii) whether the company court could invoke winding-up powers to keep the mining operations alive for the benefit of creditors and workers.

Issue (i): Whether the direction to constitute a High Powered Committee and to reconsider renewal of the mining leases could be sustained.

Analysis: The leases had expired long ago, the company was defunct for decades, liquidation had remained pending for years, and there was no practical or viable basis to compel a fresh governmental exercise on renewal. The proposed committee mechanism was disconnected from any workable financial, technical, or managerial plan and would not yield any tangible benefit.

Conclusion: The direction to constitute a High Powered Committee and revisit renewal could not be sustained and was set aside.

Issue (ii): Whether the renewal applications or the leases themselves survived so as to justify continued consideration of renewal.

Analysis: The automatic-extension and non-lapse contentions were rejected in the factual setting of long non-operation, liquidation, and the absence of any realistic mining enterprise. The separate existence of OMDC could not be ignored, and the power of attorney that enabled it to act for BPMEL stood terminated on liquidation. The court also declined to treat the matter as one warranting transfer-style relief in favour of OMDC.

Conclusion: The claim that the leases should still be treated as alive for renewal or transfer purposes was rejected.

Issue (iii): Whether the company court could invoke winding-up powers to keep the mining operations alive for the benefit of creditors and workers.

Analysis: The winding-up framework could not be used, at such a late stage and on such facts, to sanction continuation of business or appoint OMDC as an operating agent for BPMEL. The creditors' and workers' claims were acknowledged, but their dues had to be worked out under the Companies Act, 1956 and not through an order compelling lease renewal.

Conclusion: The request to use winding-up powers to continue mining operations was rejected, while the creditors and workers were left to pursue their remedies in accordance with law.

Final Conclusion: The State's challenge succeeded, the collateral challenge to the renewal refusal failed, and the dispute over the mining leases was brought to an end with remedies confined to the pending liquidation process.

Ratio Decidendi: A defunct company in liquidation, with long-expired and non-operational mining leases, cannot invoke renewal or winding-up powers to compel a fresh lease-renewal exercise where no workable plan exists and the matter would yield no practical benefit.

Issues: (i) Whether a civil suit for recovery of money, where the underlying liability was disputed and not admitted by the sick industrial company, was barred by Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985; and whether the decree passed in such suit was coram non-judice. (ii) Whether the High Court was justified in awarding 24% compound interest on the decretal amount under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, and if the period during which the company remained under BIFR protection was to be excluded.

Issue: Whether a civil suit for recovery of money, where the underlying liability was disputed and not admitted by the sick industrial company, was barred by Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985; and whether the decree passed in such suit was coram non-judice.

Analysis: Section 22(1) protects a sick industrial company only when the statutory stage of BIFR/AAIFR proceedings exists and when the proceeding is of the kind specified in the provision or is ejusdem generis with execution, distress or like coercive action. The protective object is to prevent interference with formulation or implementation of a rehabilitation scheme and to shield the assets of the company from coercive recovery. A mere adjudication of a disputed debt in a civil suit does not, by itself, threaten the assets of the sick company or impede revival; the embargo is directed against coercive enforcement, not the process of determining liability. The suit in question was therefore outside the mischief of Section 22(1), and the decree could not be treated as a nullity on the ground of want of jurisdiction.

Conclusion: The suit was not barred by Section 22(1), and the decree was not coram non-judice.

Issue: Whether the High Court was justified in awarding 24% compound interest on the decretal amount under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, and if the period during which the company remained under BIFR protection was to be excluded.

Analysis: The 1993 Act mandates interest, including compound interest with monthly rests, on delayed payments to a supplier, but its operation has to be harmonised with the protective regime under the 1985 Act. While the rate of 24% compound interest was upheld as being within the statutory scheme, the period during which the buyer-company remained a sick industrial company under BIFR protection could not be treated as a period for calculating interest, because recovery during that period was legally suspended and the dues could not be realised by coercive process. Interest, therefore, could run only outside the BIFR-protected period.

Conclusion: The rate of 24% compound interest was sustained, but the BIFR-protected period was excluded from computation.

Final Conclusion: The impugned judgment was maintained with the modification that interest would not accrue for the period during which the company remained under BIFR protection, while the decree and the award of compound interest otherwise remained undisturbed.

Ratio Decidendi: Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 suspends coercive recovery proceedings and proceedings that would interfere with rehabilitation, but it does not bar a civil court from adjudicating a disputed liability; interest on delayed payment under the 1993 Act may be awarded only for periods not covered by the statutory suspension under the 1985 Act.