"Undue Haste": NCLT Hyderabad Stays MBG Commodities EGM To Increase Share Capital Amid Oppression Case

The Hyderabad Bench of the National Company Law Tribunal has stayed an Extraordinary General Meeting proposed by MBG Commodities Pvt Ltd to increase its authorised share capital.

The tribunal observed that the company was acting in “undue haste” even as the main oppression and mismanagement petition over its rights issue and capital structure is awaiting orders.

A Bench of Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri passed the interim order on an application moved by petitioner Ashok Kumar Mandhani challenging the EGM scheduled for May 14.

The tribunal held that there was presently “no need” to increase the authorised share capital since the main company petition had already been heard and was likely to be disposed of shortly.

“However, there is no need to increase the share capital at this stage as we have already heard the main CP and matter is going to be disposed of shortly. There is also undue haste in calling the meeting for this purpose…” the tribunal observed.

The dispute arises from a shareholder battle within the Mandhani family over the control and shareholding structure of MBG Commodities. In the main petition filed under Sections 241 and 242 of the Companies Act alleging oppression and mismanagement, the petitioners have challenged a disputed allotment of nearly 2.49 crore shares. They claim the move diluted their shareholding from 71.79% to 47.87%, thereby altering the company's control structure.

The petitioners moved the present application after receiving notice of the May 14 EGM. They contended that the company was attempting another round of capital restructuring while the legality of the earlier rights issue and altered shareholding pattern remained under adjudication.

The tribunal noted that arguments in the main company petition were heard on May 5. The notice dated May 4 for the proposed EGM was received by the applicants only on May 6, leaving little time before the scheduled meeting.

“In the circumstances, particularly that the bone of contention of the parties in the CP is about the Rights issue and the capital structure of the Company, we deem it fit to stay the EGM to be held on 14.05.2026 till the next date of hearing,” the bench said.

The NCLT had earlier granted interim protection in the matter. It restrained the respondents from acting on resolutions passed at an Extraordinary General Meeting held on June 28, 2025. It also prevented certain respondents from exercising voting rights based on the altered shareholding pattern.

The respondents have now been directed to file their counter before the next hearing. The matter is listed on May 20.

For Applicant: Senior Advocate Vikram Pooserla, Advocate Krishna Vennelakanti, Advocate Anand Raj, Advocate Siva Praneetha

For Respondent: Senior Advocate Chinmoy Pradip Sharma