The Tribunal found them guilty of perjury without saying which statement was false
A three-member Bench set aside both the dismissal of an oppression petition and an omnibus perjury finding, holding that an allegation carrying penal consequences requires notice, specific findings and a reasoned determination.
The National Company Law Tribunal dismissed an oppression petition brought by two minority shareholders of Vcare Technologies and, in the same order, allowed an application alleging that they had committed perjury. A three-member Bench of the National Company Law Appellate Tribunal has set both parts aside. The order never identified which statement was false, never said whether it was made on oath, and never gave the people accused of lying a notice telling them what they were supposed to answer.
The dispute
Nikhil Rai holds 5,141 equity shares in Vcare Technologies Private Limited, about 7.93 per cent on a fully diluted basis. Nitin Singhal holds 2,170, about 3.35 per cent. Between them they hold roughly 11.28 per cent. Vishal Gupta, the second respondent, holds 37,857 shares — over 77 per cent of the paid-up capital, 58.39 per cent fully diluted. Startup Investments (Holding) Limited holds 14.80 per cent against an investment made in 2016, and there are about fifteen other shareholders.
The petition under Sections 241 and 242 of the Companies Act, 2013 was filed in 2019 and complained of a restructuring that, on the appellants' case, did several things at once. Shares were allotted at a valuation roughly 90 per cent below the earlier seed round. The assets of Diro Inc. were transferred to a company called IOD in exchange for 14.46 per cent of IOD's shares — on the appellants' characterisation, for no money, no value and no sale price. The company's interest in IOD fell from 100 per cent to 30 per cent. A disputed debt said to be owed to the second respondent was converted into equity, and against that promoter debt he proposed to issue himself 54 per cent of IOD, with the appellants offered 5.3 per cent.
The arithmetic the appellants put at the centre of their case is the shareholding that comes out the other end. The first appellant falls from 7.93 per cent to 2.4 per cent, the second from 3.35 per cent to 1.0 per cent. The second respondent rises from 58.39 per cent to 72 per cent. A restructuring that cuts the minority by two-thirds and takes the majority shareholder past a three-quarters threshold is, at the least, something a tribunal should have to explain.
The respondents had answers. The restructuring was a response to genuine financial difficulty; the offer was extended to every shareholder at the same price; the fourth respondent had approved it; and the allotment complained of was made by a subsidiary, on notice, under a special resolution. On that footing they distinguished Dale and Carrington Investment (P) Ltd. v. P.K. Prathapan, the authority the appellants leaned on, where a director had allotted shares in the company itself to himself, without notice and without any offer to the other shareholder, precisely in order to convert a minority into a majority. A shareholder who declines to fund a failing company, they argued, cannot let others carry the rescue and then complain that those others now hold more than he does.
What the order did not decide
The Appellate Tribunal did not resolve any of that, and was careful to say so. Its objection is that the order under appeal did not resolve it either.
The impugned order, the Bench found, returns no adequate and specific findings on the material contentions raised. The legality and effect of the discounted allotment, the disputed debt attributed to the second respondent, the transfer of valuable intellectual property and the continuing course of conduct were not dealt with by clear findings on the evidence on record — an omission the Bench said adds to the perversity of the order.
The existence of a commercial explanation does not do the work of adjudication. That the respondents had placed a detailed defence about the commercial necessity of the restructuring did not dispense with the duty of the adjudicating authority to examine the case the appellants actually pleaded. Financial exigency, an offer open to all, the fourth respondent's approval — these were matters requiring consideration alongside the contrary material. Adjudication proceeds on the entire record, not on the mere existence of a commercial explanation for the impugned transactions.
Jurisdiction under Sections 241 and 242 requires the adjudicating authority to examine the affairs of the company against the allegations placed before it. Without recording any final finding on whether the acts complained of amount to oppression and mismanagement, the Bench held that the material before it — the proposed transfer of Diro Inc.'s assets to IOD, the subsequent dilution of the company's interest in IOD, the alleged conversion of disputed debt into equity, and the differential consequences for existing shareholders — discloses a prima facie case that required proper, judicious and analytical consideration.
How much reasoning a tribunal owes
The respondents met the attack on the order's reasoning with a statutory argument. Section 424(1) of the Companies Act provides that the Tribunal is not bound by the procedure laid down in the Code of Civil Procedure, 1908, but is to be guided by the principles of natural justice. On that footing, they said, Order XIV, Order XX Rule 5 and Order XLI Rule 31 — the provisions that oblige a civil court to frame issues and record findings on each — have no application, and a complaint that every contention was not separately adjudicated proceeds on a model of adjudication the statute does not impose.
They distinguished Kranti Associates, where the order under challenge read, in its entirety, that the revision petition was dismissed for want of force in view of concurrent findings below. The impugned order here, they said, records the reliefs and the rival submissions, analyses each document across four paragraphs and returns findings across five more. Kranti Associates requires reasons to be cogent, clear and succinct; succinctness is not the vice it identifies, a pretence of reasons is. Inadequacy of reasons, on this argument, is not absence of reasons.
The Bench did not accept that the distinction saved this order. Its finding is not that the Tribunal wrote too little but that the specific contentions pleaded — the discounted allotment, the debt conversion, the intellectual property transfer, the continuing course of conduct — were never adjudicated at all, and that an order which does not decide the case before it is not rescued by the fact that it recites the submissions.
The chronology does the argument no favours either. The company petition was e-filed on 19 October 2019 and heard on 22 October, after the extraordinary general meeting at the centre of the dispute had concluded, and it was on that day the status quo order was made. It then remained pending for about seven years before the order under appeal was passed, and now returns to the same forum to be heard again.
Perjury, and what a finding of it requires
The second limb is the one with reach beyond this company. Application No. 78 of 2025 alleged misrepresentation and sought the initiation of perjury proceedings against the appellants and the fifth respondent. The impugned order records that it was allowed.
Perjury is a serious allegation, the Bench said, and before it can produce an adverse finding or direction the person accused must have had a fair opportunity to know the precise allegation, to respond to it, and to place material in defence. That did not happen. The order contains no clear and specific finding identifying the precise statement made by each party that was found to be false, no identification of the material on which the finding rested, and no rationale for the conclusion. There is no reasoned determination at all. An omnibus disposal of an application carrying serious civil and penal consequences cannot be sustained without adjudicatory determination.
Natural justice failed alongside it. Nothing before the Appellate Tribunal established that the appellants and the fifth respondent had been given proper notice calling on them to answer the specific allegations before the adverse conclusions were drawn. Merely referring to an application in the course of proceedings is no substitute for a meaningful opportunity to answer a charge of intentional falsehood, and audi alteram partem matters more, not less, where a party may be exposed to penal consequences.
The Bench also listed the findings that were missing on the ingredients themselves: which statement was false, whether it was made on oath, whether it was made in a proceeding before the Tribunal, whether the falsity was intentional, and whether the statutory requirements for taking further action were satisfied. None of those questions was answered, and an application of this kind could not have been allowed without answering them.
The allegations that ran into the criminal courts
What gives the perjury point its edge is how far the dispute had already travelled. The respondents' case before the Appellate Tribunal was that the appellants had procured the ex parte order of 22 October 2019 on statements the impugned order itself found to be false. That order froze the shareholding, assets and liabilities of the company, which — on the respondents' account — made payment of a sum claimed by the fifth respondent legally impossible. Nine days later he dated and presented cheques and then filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, through the appellants' own counsel, in which the respondents say the Tribunal's order was suppressed and the first appellant, a second signatory to the cheques, was left out of the array of accused. The first and second respondents were convicted on 12 February 2026, affirmed on appeal on 4 August 2026, and stand exposed to sentence.
On that account the respondents asked the Appellate Tribunal to dismiss the appeal, to hold an inquiry of its own motion, and to direct a written complaint to a Magistrate under Section 379 read with Section 215 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The Bench declined to travel there. Its observations, it said, were made only to determine whether the impugned order could stand and whether a remand was necessary.
Outcome
The appeal was allowed and the order of 9 July 2026 of the Delhi bench of the National Company Law Tribunal set aside. Application No. 78 of 2025 was set aside to the extent it had been allowed on allegations of perjury or misrepresentation, and no adverse finding against the appellants or the fifth respondent on that account survives.
The company petition goes back to the Tribunal for fresh consideration, with all sides to be heard afresh on the existing record and further replies or explanations to be called for if necessary, and is to be decided expeditiously and in a time-bound manner. Until it is, the status quo under the interim order of 22 October 2019 continues, and the first three respondents must preserve the position on the shareholding, assets and liabilities of the company and its subsidiaries. The Bench expressed no final opinion on the allegations of oppression and mismanagement; all contentions of all parties are left open. No order as to costs.