The Supreme Court on Thursday reserved its verdict on a miscellaneous application filed by a group of 29 minority shareholders seeking recall of its June 8, 2026 order referring the Jindal Poly Films Ltd class action dispute to arbitration.

The shareholders contended that the Court had not been informed that the proceedings before the NCLT had already acquired the character of a class action, with thousands of non-promoter minority shareholders becoming parties to the proceedings following statutory public notice.

On June 8, 2026, the parties jointly requested the Supreme Court to refer the dispute to arbitration and placed draft minutes of a consent order before the Court.

Accepting the request, the Supreme Court set aside the orders of the NCLT and NCLAT and appointed Justice Manindra Mohan Shrivastava (Retd. Chief Justice) as the sole arbitrator. It fixed Delhi as the seat of arbitration and kept all contentions open for determination before the arbitrator.

A bench of Justices Prashant Kumar Mishra and Atul S. Chandurkar heard the recall application and reserved its verdict.

During the hearing, the bench questioned how the consent order could operate against shareholders who were parties to the Section 245 proceedings but were not before the Supreme Court.

The Court observed that after the class action had been admitted and public notice issued, “all the public shareholders are parties” to the proceedings. At another stage, the bench asked, “How can one person speak on behalf of who will not say, I mean, it will, as we are informed, you are not a person.”

Senior Advocate Amit Sibal, appearing for the 29 minority shareholders, argued that the June 8 order had been obtained without disclosing the true nature of the proceedings before the NCLT. He submitted that the original Section 245 petition had been filed on February 28, 2024 by Ankit Jain and two other shareholders, cumulatively holding 4.99% of Jindal Poly Films' share capital, alleging mismanagement and siphoning of company assets.

Sibal submitted that once the NCLT admitted the petition on February 5, 2026 and directed statutory public notice, the proceeding became a class action binding the non-promoter minority public shareholders. He referred the Court to the public notice issued under Rule 87 of the NCLT Rules, which stated that the petition had been admitted after the Tribunal found that the requirements of Section 245 had been satisfied.

Reading from the public notice, Sibal pointed out that the class comprised the “non-promoter, minority public shareholders” of Jindal Poly Films. He argued that the 29 applicants before the Supreme Court fell within that class and therefore were already parties to the proceedings.

The bench asked Sibal why the applicants were seeking recall when the Court's June 8 order had already set aside the NCLT and NCLAT orders. Sibal responded that this was precisely the problem that the Court had been unaware that the proceedings had become a class action and that thousands of shareholders were affected by the proposed settlement and arbitration.

Sibal submitted, “They didn't tell my lords that there was already an in rem proceeding to which all non-promoter, minority, public shareholders are parties. They are necessary parties and they are affected.”

He further argued that the original petitioners could not unilaterally compromise or withdraw a proceeding that had become representative in nature. “It is not open to one individual to withdraw that petition,” he submitted, contending that the proceeding was in rem and could not be disposed of merely on the consent of the original parties.

The bench questioned whether the applicants' position meant that a class action could never be settled or referred to arbitration. Sibal responded that the statutory scheme itself provided safeguards, including an opt-out mechanism, and that the applicants had not opted out.

He referred to Rule 86 of the NCLT Rules, submitting that a member of a class action could opt out only with the permission of the Tribunal. He argued that the shareholders therefore could not simply be treated as having consented to arbitration merely because the original petitioners had agreed to it.

Sibal also relied on the Supreme Court's judgment in Vidya Drolia concerning disputes that are not arbitrable because they affect third-party rights and have an erga omnes effect. Referring to the fourfold test discussed by the Supreme Court, he read out the principle that arbitration would not be appropriate where “the cause of action and subject matter of the dispute affects third party rights, have erga omnes effect, requires centralized adjudication...”

He argued that the present case fell squarely within that principle because the Section 245 proceedings affected all non-promoter minority shareholders. “All the 25.46% non-promoter shareholders are directly affected. They are parties on that date,” he submitted.

Sibal further pointed out that SEBI had intervened in the NCLT proceedings on February 9, 2026 and placed its investigation findings on record, alleging diversion and transfer of funds and assets of Jindal Poly Films to promoter-linked entities. He submitted that SEBI's findings concerned transactions allegedly prejudicial to minority shareholders and involved an alleged fraud of at least ₹800 crore.

The bench however, indicated that the merits of those allegations were not presently before it. The Court observed that the merits could be dealt with separately and that the immediate question was whether the June 8 consent order could stand in light of the circumstances now being brought to its notice.

Sibal then took the Court to the June 8 order and the submissions recorded therein. He pointed out that the order stated that “both the parties have consented” to arbitration, whereas, according to him, there were not merely two parties to the underlying proceedings.

He submitted that the Supreme Court had been told that the Section 245 petition involved a sole respondent, whereas the actual NCLT proceedings had numerous respondents and, after admission of the class action, thousands of public shareholders had become parties. “My lords were told there was one respondent. That's a false statement,” he argued.

Sibal also challenged the authority of Monet Securities Private Limited, which had been substituted as the petitioner before the Supreme Court, to consent to disposal of the class action petition and referral of the dispute to arbitration. 

“How does Monet have the authority to speak on behalf of thousands of shareholders when he has not been chosen as the lead applicant and there's an application pending for that purpose?” Sibal asked.

Senior Advocates Abhishek Manu Singhvi and A.N.S. Nadkarni, appearing for Jindal Poly Films, opposed the recall application. They argued that the applicants had not been parties to the Supreme Court proceedings and had approached the Court only after the June 8 order had been passed.

Singhvi questioned the present applicants' locus and shareholding, pointing out that the original petitioners had held around 4.9% of the company's shares but subsequently sold their holdings. He submitted that the present applicants had not approached the Supreme Court or the NCLT at the relevant stage and had subsequently acquired a much smaller shareholding.

He questioned the maintainability of a miscellaneous application seeking to reopen a disposed Supreme Court proceeding, particularly where the applicants had not been parties to the appeal.

Referring to Supreme Court precedent, Singhvi argued that an MA could not become a mechanism for reopening a concluded proceeding except in exceptional circumstances.

The bench asked whether the applicants could nonetheless seek relief if they were members of the class affected by the NCLT proceedings. Singhvi maintained that they had not participated in the proceedings at the relevant stage and that the Court should consider the date on which they acquired their shares and their status when the proceedings were pending.

Singhvi also submitted that the applicants had allegedly repurchased shares after the NCLAT proceedings and were now attempting to intervene after the Supreme Court had disposed of the matter. He argued that permitting such applications would create a situation where persons could acquire even a minimal shareholding and then seek to reopen concluded proceedings.

He posed the concern that if such a course were permitted, “tomorrow, even go and buy... and say, I can now maintain” an application seeking to unsettle an order already passed by the Supreme Court.

Singhvi further argued that the dispute before the Supreme Court arose from the challenge to the maintainability of the Section 245 proceedings and that the applicants were attempting to introduce a separate controversy into a disposed appeal.

The bench, however, returned to the central question of the effect of the statutory public notice and the representative character of the Section 245 proceeding. It asked whether the Court could disregard the fact that, after admission, the proceeding affected shareholders beyond the original petitioners.

The bench observed that this was a question of fact which could not appropriately be resolved merely on oral submissions across the Bar. The Court said the parties should place their respective positions on affidavit.

The bench specifically directed that the factual assertion concerning the date of purchase be clarified and remarked that the company “must file a reply”, observing that it could not rely merely on a statement made across the Bar. The Court indicated that the relevant documents would have to be placed on record before the issue could be considered.

After hearing the detailed submissions, the Supreme Court reserved its verdict on the miscellaneous application seeking recall of the June 8 order.


Tags:    
Case Title :  JINDAL POLY FILMS LTD vs MONET SECURITIES PRIVATE LIMITED & ORS.Case Number :  Diary No. 37515/2026