NCLT Cannot Revoke Consent Terms Due to Later-Filed Annexures | NCLAT

Case Details: Sonali Prashant Shinde v. Vikram Vilasrao Salunke [2025] 179 taxmann.com 504 (NCLAT–New Delhi)

Judiciary and Counsel Details

• Yogesh Khanna, Judicial Member & Ajai Das Mehrotra, Technical Member
• Sanjay Kumar Dubey, Sushil Nimbkar, Ms Shuchi Singh & Ujjwal Kumar Dubey, Advs. for the Appellant.
• Chinmoy Khaladkar, Anand Shankar Jha, Sachin Mintri, Shrenik Gandhi & Shubhank Sharma, Advs. for the Respondent.

Facts of the Case

In the instant case, a family dispute among shareholders of Accurate Engineering Company Pvt. Ltd. (AECPL) was referred to mediation by the NCLT. The mediation concluded with consent terms dated 7 January 2023, signed by all parties, settling the division of the company’s manufacturing and service businesses. Two annexures listing the plant and machinery of each division were finalized and attached later. Subsequently, Sonali Prashant Shinde filed an application before the NCLT to revoke the consent terms, alleging that the annexures were incomplete at the time of signing and that there was non-compliance with Rules 25 and 26 of the Companies (Mediation and Conciliation) Rules, 2016.

NCLAT Held

The NCLT dismissed her plea, holding that the consent terms were executed with free consent and were binding. On appeal, the National Company Law Appellate Tribunal (NCLAT) affirmed the NCLT’s decision, observing that the mediator’s final report confirmed the annexures were duly signed and submitted along with the consent terms, satisfying the requirements of Rules 25 and 26. It held that the 14-day period prescribed under Rule 26 is directory and not mandatory, and that the settlement process was validly completed once the mediator filed the final signed copy before the NCLT.

The NCLAT further noted that the appellant had already accepted the monetary consideration under the settlement and later sought to alter its nature, which she could not do. Therefore, since the mediation process was duly concluded and the consent terms, along with annexures, were properly executed and filed, no ground existed to revoke or declare the settlement unenforceable. The appeals were accordingly dismissed as devoid of merit.

List of Cases Reviewed

• State of UP v. Babu Ram Upadhyay (1961) 2 SCR 679 (Para 16) followed

List of Cases Referred to

• State of UP v. Babu Ram Upadhyay (1961) 2 SCR 679 (para 16).