NCLT Hyderabad: Tribunals Have Jurisdiction Under S. 59 Of Companies Act To Refer Seriously Disputed Questions To Civil Court

In a recent ruling, the NCLT Hyderabad bench dismissed a petition under Section 59 of the Companies Act, 2013 filed by Mr. Gireesh Sanghi against Sanghi Cements Limited. The petition challenged the allotment of 85,00,000 equity shares to Mr. Ravi Sanghi without proper notice and consent, allegedly to manipulate shareholding. The tribunal referred the matter to a Civil Court, emphasizing that the Companies Act does not allow NCLT to resolve disputes involving complex facts best handled by civil courts. The tribunal cited the need for thorough investigation into issues like alleged fraud, family disputes, and compliance violations. It ruled the petition time-barred under the Limitation Act, noting delayed discovery of share allotment details. The decision underscores NCLT's limited jurisdiction under Section 59 for rectificatory matters, endorsing civil courts for nuanced adjudication. The case highlights complexities in corporate governance and shareholder disputes under Indian company law.