Finalised Share Valuation, Buyout Mechanism Can't Be Reopened Through Fresh Application: NCLAT Delhi

On 29 October, the National Company Law Appellate Tribunal (NCLAT), New Delhi, held that issues relating to share valuation and the consequent buyout mechanism, which have attained finality, cannot be reopened through a subsequent interlocutory application when the appellant has exhausted the available judicial remedies.

A Bench comprising Judicial Member Justice Sharad Kumar Sharma with Technical Members Arun Baroka and Indevar Pandey upheld the Jaipur Bench of the National Company Law Tribunal's (NCLT) rejection of Shefali Agarwal's application seeking rectification of alleged errors in a valuation report and a fresh valuation exercise. It held:

“Since the issue has already been determined by the superior court, the same issue or subject cannot be permitted to be reopened for consideration by a subordinate Court by filing an application of the nature under challenge.

When the Appellant has filed and exhausted her judicial remedies against the Order appointing the Valuer and against the findings recorded with respect to the Valuation Report, she cannot be permitted to reopen the same by filing an application…”

Agarwal, a former director of Stone Age Pvt. Ltd., initiated oppression and mismanagement proceedings against the company and its management under Sections 241 and 242 of the Companies Act, 2013.

On 12 October 2023, the NCLT directed the appointment of a registered valuer to determine the value of the company's shares and provided Agarwal an exit route through a compulsory buyout of her shareholding. The appointed valuer subsequently completed the valuation exercise and submitted a report.

Agarwal challenged the order before the NCLAT in an earlier appeal. On 14 May 2026, the NCLAT upheld the valuation mechanism, observing that she had been given opportunities to raise objections before both the valuer and the NCLT but had failed to avail them. It found no grounds to interfere with the valuation process. The Supreme Court subsequently declined to interfere with the NCLAT's findings.

Later, Agarwal approached the NCLT again, seeking directions to the registered valuer to correct alleged arithmetical errors, conduct a fresh valuation exercise and revise the buyout consideration.

She contended that the Supreme Court's order did not constitute an adjudication on the merits and, therefore, did not bar a subsequent application.

The respondents opposed the application, arguing that Agarwal could not re-agitate issues concerning the valuation report or the value of the shares. They submitted that the reliefs sought substantially overlapped with the grievances raised in the earlier appellate proceedings and before the Supreme Court.

The Appellate Tribunal held that the issues raised in the subsequent application had already been considered in the earlier proceedings. It noted that the Supreme Court had examined the material on record and found no grounds to interfere with the NCLAT's earlier judgment. It also observed that the issues had attained finality and could not be reopened in view of the principles of res judicata. It said:

Further, the Bench observed that Agarwal had failed to challenge the valuation at the appropriate stage and could not seek a fresh assessment merely because the outcome was unfavourable. It said:

“Entertainment of such type of an application at this belated stage will be an apparent abuse of process, because all judicial proceedings are logically to be brought to an end at some point in time, and the attempt made to reopen the proceedings, particularly to solicit further observations on the Valuer's report, as intended to be ventured into by the application, was rightly declined to be interfered with by the learned Tribunal…”

Accordingly, the NCLAT dismissed the appeal.

For Appellants: Advocates Rahul Jajoo and Siddharth Bapna