The Delhi High Court has ruled decisively that mere allegations of fraud or forgery cannot be used to deprive the National Company Law Tribunal (NCLT) of jurisdiction to examine disputed company records. The Court overturned a trial court’s decision which had refused to reject a civil suit filed by the founders of a defence-technology startup. The founders had claimed that certain documents — including a shareholders’ agreement, share transfer forms, and board resolutions — submitted by another firm (Karyan Global LLP) before the NCLT were forged, and had sought from the civil court a declaration that those documents were void along with an injunction against using them.
The High Court observed that civil courts are barred from entertaining parallel suits when identical issues — such as authenticity of company records — are already before the NCLT under an oppression and mismanagement petition. The Court emphasized that the bar under Section 430 of the Companies Act, 2013 applies even when forgery or fraud is alleged; such allegations do not automatically lift the statutory bar on civil-court jurisdiction. The Court stated that the NCLT has “the widest possible amplitude” in company matters, and its jurisdiction extends to examining disputed documents and even ordering forensic tests if necessary.
Declining the civil suit, the High Court directed that all objections and disputes regarding the documents’ validity must be raised before the NCLT, which would remain seized of the matter. The Court warned that allowing civil suits on the same questions of fact already pending before NCLT would lead to multiplicity of proceedings and could result in conflicting findings. The judgment thus reaffirms that allegations of forgery or fraud are not sufficient, by themselves, to oust the exclusive jurisdiction of NCLT in company law disputes, particularly in cases involving oppression and mismanagement.
This decision arose from a dispute between Karyan Global LLP and the founders of a defence-tech startup that builds unmanned aerial vehicles for armed forces. The founders had borrowed ₹12.70 crore from Karyan Global in 2020 by pledging 26% of their shares, and repaid the loan in full in 2024. Subsequently, Karyan Global moved the NCLT in Allahabad alleging oppression and mismanagement, relying on documents which the founders claimed were forged. The founders filed the civil suit challenging those documents; but the High Court, in this order under case numbers CRP 10/2025, CAV 25/2025, CM APPL 2464/2025 and CM APP 61625/2025, rejected that attempt, insisting that all issues be heard by NCLT.
The Court referred to its broad mandate to ensure that company-law disputes are resolved in a single forum, and that NCLT’s jurisdiction is not limited merely to “summary” or clear-cut matters. Allowing a civil suit based purely on forgery claims would effectively permit litigants to circumvent the statutory scheme by seeking parallel adjudication in civil courts. The High Court thus affirmed the primacy of NCLT over civil courts in such contexts, upholding the principle that company-related disputes — even those involving alleged fraud — are to be determined within the framework of the Companies Act through the tribunal designated for such matters.
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