NCLAT Delhi Remands VCare Technologies Oppression Petition: Restructuring Defence Cannot Override Duty to Return Specific Findings

Background and Overview

The Delhi bench of the National Company Law Appellate Tribunal ("NCLAT") has set aside an order passed by the National Company Law Tribunal, New Delhi Bench-IV ("NCLT") in a long-pending oppression and mismanagement petition concerning M/s VCare Technologies Private Limited. The appeal — Company Appeal (AT) No. 280 of 2026, decided on 25.09.2026 — was filed by minority shareholders challenging the NCLT's order dated 09.07.2026, which had dismissed Company Petition No. 157/241-242/ND/2019 filed under Sections 241 and 242 of the Companies Act, 2013 and simultaneously allowed I.A. No. 78/2025, an interlocutory application by the respondents alleging perjury.

The NCLAT remanded the matter for fresh adjudication, restored the status quo order dated 22.10.2019, and left all questions of merit open for determination by the NCLT.

Parties to the Dispute

The Appellants

Mr. Nikhil Rai ("A1") was a founding promoter, former Chief Operating Officer and former director of VCare Technologies Private Limited. He held 5,141 equity shares, representing approximately 7.93% of the paid-up share capital. He resigned from the board on 01.06.2018 and from full-time employment on 14.07.2018 but continued as a shareholder.

Mr. Nitin Singhal ("A2") was an early seed investor holding 2,170 equity shares, representing approximately 3.35% of paid-up capital. Together, A1 and A2 collectively held approximately 11.28% of the paid-up share capital.

The Respondents

Mr. Vishal Gupta ("R2") was the promoter, Chief Executive Officer, and director of the Company, claiming to hold 37,857 equity shares representing over 77.2% of the paid-up capital. Following the resignation of A1 in June 2018, R2 assumed singular control over the Company and all its subsidiaries.

Mrs. Bhagwati Devi ("R3") was a director of the Company and the mother of R2.

Startup Investments (Holding) Limited ("InfoEdge"/"SIHL"/"R4") was an institutional investor holding optionally convertible preference shares with a fully diluted shareholding of approximately 14.80%, against an investment made in 2016. The preference shares had not been converted to equity. R4 did not participate in proceedings before either tribunal.

Mr. Sumit Khurana ("R5") was a creditor of the Company holding one equity share. He was subsequently impleaded as a party.

The Corporate Structure and Asset Position

VCare Technologies Private Limited was the holding company of its subsidiaries and step-down subsidiaries. Its principal assets — comprising intellectual property, technology, software, and business developed over several years — were held through:

  • Diro Inc. — a wholly owned subsidiary incorporated in Delaware, USA; and
  • Diro Labs Limited — a wholly owned subsidiary of Diro Inc., incorporated in the United Kingdom.

In practical terms, the entire commercial value of the Company was embedded in these two overseas entities.

The Proposed Restructuring: Appellants' Case

Incorporation of Internet Original Documents Inc. (IOD)

In August 2019, a new company — Internet Original Documents Inc. ("IOD") — was incorporated in the United States as a wholly owned subsidiary of VCare Technologies. The appellants contended that IOD was not a genuine business vehicle but an instrument devised by R2 to execute a scheme for diverting the Company's most valuable assets away from existing stakeholders.

The Asset Transfer

The EGM notice circulated on 27.09.2019 included a resolution seeking member approval to ratify the transfer of all assets and liabilities of Diro Inc. to IOD. The appellants argued that in exchange for transferring its entire asset base, Diro Inc. received only 14.46% of IOD's shares — effectively surrendering all its assets for a minority stake in the very entity to which those assets were being moved. According to the appellants, this was a commercially indefensible and circular transaction with no objective valuation.

The critical point, as urged by the appellants, was that the initial transfer from one wholly owned subsidiary to another was merely a precursor. The subsequent steps of the restructuring were designed to reduce the Company's shareholding in IOD from 100% to approximately 30%, meaning the Company would ultimately hold only a fractional interest in assets it had originally owned outright.

The Promoter Debt Conversion

A second EGM agenda item proposed settling an alleged outstanding debt owed by the Company to R2, described as approximately Rs. 4 crore, by transferring the Company's stake in IOD to R2 at a cost of 39 cents per share. The appellants disputed both the quantum and authenticity of this debt, pointing to a WhatsApp communication of 27.05.2019 in which R2 himself had described his debt in the Company as only Rs. 2 crore. They also noted that: