NCLT Ahmedabad Allows Former Promoters To File Oppression & Mismanagement Plea Against Indian Commodity Exchange; Holds PMLA-Attached Shares Count Toward 10% Threshold
Pranav B Prem
The National Company Law Tribunal (NCLT), Ahmedabad Bench, comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma, has granted a waiver to former promoters and shareholders of the Indian Commodity Exchange Limited (ICEX) to maintain a petition alleging oppression and mismanagement under Section 241–242 of the Companies Act, 2013, despite their shareholding being partially under provisional attachment by the Enforcement Directorate (ED). The applicants — Kailash Ramkishan Gupta, a former promoter of ICEX, and Neptune Overseas Limited, an Ahmedabad-based shareholder company — had filed an application under Section 244(1) proviso seeking a waiver of the 10% minimum shareholding requirement prescribed for filing an oppression and mismanagement petition.
Background
ICEX, once a SEBI-recognized national commodity derivatives exchange, was initially promoted by several corporate entities, including Religare Securities, MMTC, Indiabulls Housing Finance, and others. Over the years, financial irregularities and regulatory non-compliances led to the de-recognition of the exchange by SEBI. The applicants, who together held over 5.54 crore equity shares, alleged that the present management had indulged in asset undervaluation, diversion of funds, and irregular managerial remuneration, among other acts prejudicial to shareholders and the company. The difficulty arose as 4.82 crore shares held by Neptune Overseas Limited were under provisional attachment by the Enforcement Directorate (ED) in connection with proceedings under the Prevention of Money Laundering Act, 2002 (PMLA). The applicants therefore sought a waiver of the shareholding eligibility under Section 244(1)(a).
Contentions of the Applicants
The applicants argued that they continued to be registered shareholders and beneficial owners of the attached shares since no final confiscation order had been passed under PMLA. They submitted that provisional attachment did not extinguish ownership rights or voting powers, and therefore, the shares must still be counted for determining the 10% threshold. They further contended that the company’s affairs were being conducted in a manner oppressive to minority shareholders and prejudicial to public interest. Allegations included:
Unauthorised sale of key assets at depressed values;
Payment of exorbitant remuneration to certain managerial personnel;
Regulatory violations that led to SEBI de-recognition; and
Misrepresentation of the company’s financial position.
Respondents’ Stand
The Indian Commodity Exchange Limited (ICEX) opposed the waiver plea, contending that since the shares were under ED attachment, they could not be reckoned for the purpose of shareholding calculation. ICEX argued that the applicants lacked the requisite locus standi to invoke Section 244(1). The company further argued that no “exceptional circumstances” existed to warrant waiver and that the petition was motivated by disputes among shareholders rather than genuine oppression or mismanagement.
The ED, in its written submission, clarified that the attachment was provisional in nature and did not affect ownership or voting rights until a final confiscation order was issued by a competent PMLA court.
Findings of the Tribunal
The NCLT examined whether provisional attachment under PMLA strips shareholders of proprietary and voting rights for the purpose of eligibility under Section 244. Referring to the Supreme Court’s ruling in Directorate of Enforcement v. Axis Bank (2019) and Section 8 of the PMLA, the Tribunal observed that provisional attachment merely restrains transfer or alienation and does not divest the owner of title unless confirmed by an adjudicating authority and followed by a final confiscation order. The bench noted:“In the absence of any final order under PMLA divesting the applicants of their proprietary rights, the attached shares must be considered as part of their holding for the limited purpose of eligibility under Section 244(1) of the Companies Act.”
It further highlighted that the company’s de-recognition by SEBI, its regulatory breaches, and financial irregularities constituted exceptional circumstances meriting judicial intervention. “We find that the affairs of the company prima facie indicate acts of mismanagement that affect not only the applicants but also the interests of over 2,400 shareholders. In such circumstances, denial of waiver would defeat the very object of Section 244(1) proviso.”
Accordingly, the Tribunal allowed the waiver under Section 244(1)(a) and directed that Company Petition No. 21 of 2024 be admitted for hearing on merits. Notices were issued to ICEX and other respondents. The matter has been listed for further hearing on December 4, 2025.
Appearance
For the Applicants: Advocate Tirth Nayak
For the Respondents: Advocates Ravi Pahwa (for the exchange and its executives) Advocate Prutha Bhavasar for ED
Cause Title: Kailash Ramkishan Gupta & Another V. Indian Commodity Exchange Limited & Ors.
Case No: Item No.305 - Сp/21(Ahm)2024 With Item No.306 - Ia/63(Ahm)2024
Coram: Judicial Member Shammi Khan, Technical Member Sanjeev Sharma
