Kailash Parbat Hotels Dispute: NCLT Mumbai Rejects Kishore Keswani’s Plea Against Brothers, Says Family Wealth Row Belongs In Civil Court

Mumbai: The National Company Law Tribunal (NCLT), Mumbai, has dismissed a petition filed by Kishore Keswani, a founding director of Kailash Parbat Hotels (India) Pvt Ltd, alleging oppression and mismanagement by his brothers over the family-run company’s shareholding. The tribunal also declined to set aside Kishore's removal as a director, noting that the prescribed procedure and majority voting had been followed.

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Keswani had alleged that his brothers, Manohar and Rajkumar, had acquired shares from the Mulchandani family in their own names and those of their wives, despite an understanding that the shares would be distributed among the four branches of the family.

Rejecting the plea, the tribunal observed that the dispute was essentially about the division of family wealth rather than oppression in the company’s affairs. The tribunal observed that the dispute centred on Kishore’s allegation that his brothers had used common family funds to acquire shares in their own names and those of their wives, thereby breaching his trust. It held that even if the allegation were accepted, the matter concerned the division of family wealth rather than oppression of a shareholder in the company’s affairs

“The remedy to claim rightful share in the properties acquired out of common family funds lies before the civil court,” the tribunal observed. The NCLT further held that denial of a rightful share in family wealth, even if prejudicial to one branch of the family, could not be treated as an act of oppression in the company’s affairs.

The tribunal also observed that the petitioner had collected hotel revenue in accounts other than the company’s bank account without providing complete details of the collections and expenditure. It held that his conduct indicated an “inequitable approach” towards the company and its other shareholders. The petition was accordingly dismissed, along with the pending applications.

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