NCLT Chandigarh Refuses To Recall Scheme Order, Holds Accounting Dispute Insufficient To Establish Fraud

The National Company Law Tribunal (NCLT), Chandigarh, has refused to recall its order dispensing with meetings of unsecured creditors for a Scheme of Demerger and Amalgamation involving Okaya Power Private Limited and three group companies.

The tribunal held that the dispute over the dues claimed by two Microtek companies did not establish that Okaya had deliberately concealed an admitted liability or practised fraud to obtain the earlier order. It observed that the dispute essentially concerned reconciliation and characterisation of commercial transactions, which could not be summarily adjudicated in the recall proceedings.

The bench comprising Judicial Member Khetrabasi Biswal and Technical Member Kaushalendra Kumar Singh observed, “…the legality of the Scheme and the rights flowing therefrom must be examined independently of the inter se disputes between the shareholder groups unless such disputes are shown to have directly resulted in concealment of material facts from this Tribunal.”

The applications were filed by Microtek International Private Limited and Microtek New Technology Private Limited seeking recall of the August 29, 2025 first-motion order, which had dispensed with meetings of unsecured creditors in connection with the Scheme.

Microtek International claimed that ₹8.51 crore was due to it from Okaya Power as on December 31, 2024, while only Rs 33.46 lakh was shown as payable in the list of creditors. It alleged that the lower figure artificially increased the percentage of creditors consenting to the Scheme and helped Okaya cross the 90% threshold for dispensing with the meeting.

The respondents disputed the claim. They explained that Microtek supplied inverters to Okaya, while Okaya and the other companies supplied batteries to Microtek. Separate Vendor and Customer Ledgers were maintained for these transactions. The respondents contended that the ₹33.46 lakh represented the balance payable under the Vendor Ledger, while the larger Customer Ledger balance related to defective batteries returned under warranty and did not represent a separate monetary liability.

The court observed that it was not required at this stage to finally determine the rival accounting positions or the exact amount payable. The figures in the respective books could differ and require reconciliation.

It also noted that disputes between the Aggarwal and Gupta groups, including proceedings before the Delhi High Court and NCLT New Delhi, showed serious commercial disputes but did not establish fraud or suppression in obtaining the earlier order.

Relying on Budhia Swain v. Gopinath Deb, (1999) and A.R. Antulay v. R.S. Nayak, (1988) the tribunal observed that recall is an exceptional power, ordinarily exercised where an order has been obtained through fraud, suppression of material facts or a fundamental procedural defect.

The court found that the material did not meet that threshold and dismissed the applications. It also dismissed the connected applications concerning the second-motion proceedings.