Eros International Media Ltd. Vs Colour Yellow Productions Private Limited & Ors. (NCLT Mumbai)
The matter before the National Company Law Tribunal (NCLT), Mumbai, arose from a company petition alleging oppression and mismanagement under Sections 241–242 of the Companies Act, 2013. The petitioner, having acquired 50% shareholding in the respondent company under a Term Sheet dated 22 January 2014, alleged that the respondents had breached contractual obligations, mismanaged company affairs, diverted funds, undertaken related party transactions without approval, and excluded the petitioner from management decisions. The petitioner relied on a Chartered Accountant’s report highlighting instances of related party transactions and alleged non-compliance with statutory provisions. It also sought reliefs including declarations of oppression, removal of directors, and appointment of an administrator.
The respondents contended that all disputes arose from alleged breaches of the Term Sheet and subsequent agreement dated 23 August 2023, both of which contained arbitration clauses. They argued that the petition was a “dressed-up” attempt to avoid arbitration and that the reliefs claimed stemmed from contractual rights rather than independent shareholder rights. It was further submitted that disputes relating to financial management, related party transactions, and information disclosure were governed by contractual obligations. The respondents also pointed out that the petitioner’s nominee director had signed financial statements up to 2024, and that earlier disputes had been settled and followed by a renewed agreement containing an arbitration clause.
