SC dismisses BDPL’s plea, brings one of India’s longest-running corporate disputes to end

In a significant victory for Peerless General Finance and Investment Company Limited, the Supreme Court on Tuesday declined to interfere with the judgment of the National Company Law Appellate Tribunal (NCLAT) and dismissed the appeal filed by Bhagwati Developers Private Limited (BDPL) in a dispute over the transaction of shares. The dismissal of the plea of BDPL brings to an end one of India’s longest-running corporate disputes, which has continued for more than three decades.

A bench of Justices P S Narasimha and Alok Aradhe dismissed the petition filed by the BDPL and refused to interfere with the April 16 order of the NCLAT. Senior advocate Harish Salve, assisted by advocates Arunabha Deb and Ashika Daga, represented Peerless while senior advocate Gopal Subramaniam, assisted by advocate Faraz Anees, appeared for BDPL.

The dispute originated in proceedings instituted in 1991 and concerned corporate decisions and share transactions undertaken by Peerless in 1987-88.

At the heart of the dispute were the issuance of 30,000 equity shares by Peerless through private placement, approved by its shareholders and the board of directors, and the transfer of 15,626 shares by the existing shareholders. The transactions were subsequently challenged on allegations that they were intended to alter the control of Peerless and involved improper use or routing of funds.

The original proceedings were instituted under Sections 397 and 398 of the Companies Act, 1956. After the original petitioners sought withdrawal of the proceedings, BDPL was subsequently permitted to continue the litigation as the petitioner.

The proceedings thereafter travelled through the Calcutta High Court and the Supreme Court before ultimately reaching the NCLT.

By its order dated July 18, 2022, the NCLT allowed the company petition after more than three decades from the date of the transactions. Peerless challenged that decision before the NCLAT.

On April 16, 2026, the NCLAT allowed the appeals of Peerless and set aside the judgment of the NCLT.

Upon consideration of the historical corporate records and contemporaneous material, the NCLAT rejected the allegations of financial impropriety and upheld the validity of the corporate decisions and transactions in question.

Thereafter, BDPL challenged the NCLAT judgment before the top court.

Peerless has consistently maintained that the transactions were undertaken lawfully, transparently and in the commercial interests of the company, with the requisite corporate approvals.

The conclusion of the proceedings brings finality to a long-running challenge to corporate decisions taken more than three decades ago.

Reacting to the apex court’s order, Jayanta Roy, managing director of Peerless General Finance and Investment Company Limited, said, “After more than three decades, this judgment brings finality to a long chapter in the history of Peerless. We are grateful that the validity of the company’s decisions, taken in good faith and in the interests of the institution, has ultimately been upheld.

“For us, this is not merely the conclusion of a long legal battle; it allows Peerless to look”.