NCLT Ahmedabad Denies Unilateral Mediation Request in Oppression and Mismanagement Dispute
The intersection of alternative dispute resolution and corporate litigation often presents complex questions regarding statutory interpretation and mutual consent. A prominent example of this dynamic was recently observed in a ruling by the National Company Law Tribunal (NCLT), Ahmedabad Division Bench. The Tribunal adjudicated upon a critical application concerning whether mediation can be forced upon unwilling parties in a corporate dispute.
In the matter of Harshvardhan Lunia & Ors. Vs Lendingkart Technologies Pvt. Ltd. & Ors., the NCLT evaluated the mandatory versus directory nature of referring disputes to mediation under the Companies Act 2013. The minority shareholders sought to refer their pending oppression and mismanagement petition to mediation, a move vehemently opposed by the majority shareholder and the company itself. The Tribunal ultimately dismissed the mediation plea, emphasizing that compulsory reference to an alternative dispute resolution mechanism serves no practical purpose when the opposing parties have explicitly rejected settlement proposals and demonstrated strong resistance to the process.
Factual Matrix of the Dispute
The core conflict stems from a primary petition, Company Petition No. CP/72(AHM)/2025, instituted by minority shareholders (the Applicants) against Lendingkart Technologies Pvt. Ltd. (Respondent No. 1) and its majority controlling shareholder, Fullerton Financial Private Limited (Respondent No. 2). The petition was filed under Section 241 and Section 242 read with Section 213 of the Companies Act 2013 and Rule 81 of the NCLT Rules, 2016, alleging continuous acts of oppression and mismanagement by the majority stakeholders and their nominee directors.
During the pendency of this main petition, the Applicants filed Company Application No. 33(AHM)/2026 under Section 442 of the Companies Act 2013 on 04.08.2026. The objective of this interlocutory application was to pause the adjudicatory proceedings and refer the underlying disputes to an independent mediator.
Chronology of Settlement Attempts
The Tribunal's records indicate that prior attempts at amicable resolution were initiated but ultimately collapsed:
- 18.06.2026: The NCLT recorded the Applicants' willingness to explore a settlement. The Tribunal directed the Applicants to submit a "without prejudice" settlement proposal to the Respondents within three days.
- 23.06.2026: A formal settlement proposal was addressed by the Applicants to Respondent No. 1.
- 07.07.2026: The Board of Directors of Respondent No. 1 evaluated the proposal, deemed it unfeasible, and officially rejected it.
- 09.07.2026: During a Tribunal hearing, counsel for Respondent No. 2 stated they had not formally received the proposal. However, the Respondents collectively communicated their disinclination to settle, prompting the NCLT to record that the matter should proceed on merits.
- 03.08.2026: The Applicants sent another settlement proposal directly to the Board of Directors of Respondent No. 2.
- 07.08.2026: Respondent No. 2 explicitly rejected this subsequent proposal, categorizing it as neither fair nor viable.
Despite these clear rejections, the Applicants pressed forward with their application for a formal mediation reference, leading to a detailed legal battle over the interpretation of Section 442.