Mumbai: NCLT Finds Oppression And Mismanagement In Arzoo.com Dispute, Grants Relief To Shareholder
· Free Press Journal
Mumbai, July 8, 2026: The Mumbai Bench of the National Company Law Tribunal (NCLT) has ruled in favour of shareholder Yogesh Patel in a long-running dispute over the affairs of Arzoo.com (India) Private Limited, holding that certain actions of the company’s management amounted to oppression and mismanagement under the Companies Act.
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The tribunal observed that the company had informed the City Civil Court at Dindoshi, in a commercial suit, that it was facing unprecedented difficulties in gathering evidence and was in the final stage of winding down its operations.
Referring to this submission, the NCLT noted that the petitioner had expressed apprehension during the hearing on February 20, 2026, that the company’s stand could render the company petition infructuous and allow the management to escape scrutiny over the alleged acts of mismanagement.
Tribunal's Observations
The Bench observed that the company’s management appeared unwilling to continue its business operations, while the petitioner sought to keep the company alive only to secure corrective action against the alleged acts of mismanagement.
Since the tribunal had already issued appropriate directions on the issues raised, it held that no further orders were necessary and left it to the parties to decide the future course of the company’s business.
The order was passed while deciding a company petition filed in 2019 alleging irregularities in the company’s governance, shareholding, and financial transactions.
Shareholding Restored
One of the tribunal’s key findings related to 68,015 equity shares originally allotted to the petitioner’s father, Bhogilal Patel, in 2011. The Bench noted that documentary evidence, including statutory filings made with the Ministry of Corporate Affairs, established that the shares had been allotted to him.
However, the company’s register of members recorded the shares in the name of co-founder Sabeer Bhatia. As no valid transfer documents were produced to justify the change, the tribunal directed the company to rectify its register of members by restoring the shares to Bhogilal Patel’s name and issuing the corresponding share certificate.
The tribunal, however, rejected the petitioner’s challenge to an alleged attempt to dilute his shareholding through a proposed share allotment in 2019. It held that since the proposed allotment was never implemented, the petitioner’s shareholding had not been adversely affected.
Nevertheless, the Bench observed that the company had failed to comply with the statutory requirement of issuing proper notice for the annual general meeting.
With regard to shares held by Mauritius-based entities, the tribunal found no material to establish oppression against the petitioner. It observed that any dispute concerning those shares was essentially between the overseas entities involved and did not directly affect the petitioner’s rights.
Findings On Financial Transactions
The tribunal was, however, critical of substantial payments made by Arzoo.com to Shree Mahalaxmi Vacations Private Limited. After examining the special audit report and the company’s records, it concluded that the advances could not be regarded as genuine business transactions.
The Bench found no evidence to show that the airline tickets, for which the payments were allegedly made, had ever been supplied. It also noted that the recipient company had subsequently been struck off the register of companies.
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