Shareholder Cannot Maintain Individual Appeal After Failing To Avail Representative Remedy: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has recently held that a shareholder cannot independently challenge a final order in a representative company petition after failing to pursue an opportunity to raise grievances collectively.

“The Appellant cannot now claim an independent and continuing right to intervene in the representative company petition and challenge the final order in its individual capacity,” the tribunal observed. It added that the appellant could not repeatedly pursue individual proceedings arising from the same company petition after failing to use the representative remedy.

"The right granted by the Ld. NCLT was to approach it in a representative capacity. Having failed to avail that remedy, the Appellant cannot repeatedly invoke individual proceedings arising from the same Company Petition and thereby enlarge the scope of the litigation", it ruled.

The bench comprised Judicial Member Justice Sharad Kumar Sharma and Technical Members Arun Baroka and Indevar Pandey.

The appeal was filed by Mehul Vyas against a June 25, 2026 order of the Mumbai bench of the National Company Law Tribunal (NCLT). The order restructured the shareholding and management of Dreams the Mall Company Limited.

Incorporated in 2013, the company manages Dreams the Mall in Bhandup, Mumbai. More than 1,000 purchasers of commercial premises were allotted shares, including Vyas, who owns two shops.

Disputes over the mall's management led to an oppression and mismanagement petition. The NCLT appointed administrators and directed shop owners to pay maintenance charges.

Fires in 2021 and 2022 left the mall uninhabitable, while its occupancy approvals were revoked and property tax dues crossed ₹60 crore.

The NCLT later ordered a restructuring of shareholding based on carpet area and formed a new board to manage the company.

Vyas challenged the order, arguing that his intervention application remained pending and the board had been given excessive powers. He also questioned revival costs, arguing that redevelopment was the only viable option.

No other shop owner had challenged the final order, which was intended to benefit shareholders and shop owners as a group.

The tribunal upheld the rejection of Vyas's subsequent application to introduce additional documents after the company petition had been reserved for judgment. It observed that accepting fresh material at that stage would deny the other parties an opportunity to respond.

The NCLAT also rejected the contention that the entire mall had been gutted. A June 2022 structural audit report recorded that 31,913.72 square metres of the total 1,44,736.59 square metres was affected by fire, while 1,12,822.87 square metres remained unaffected. The report found the structure repairable.

The NCLAT dismissed the appeal as not maintainable in the manner it had been filed. It imposed exemplary costs of ₹5 lakh on Vyas, directing him to deposit the amount in the Prime Minister's National Relief Fund within four weeks.