[Cites 7, Cited by 0]
Bombay High Court
Nimesh Singh vs Synergies Castings Limited on 28 January, 2026
2026:BHC-OS:2433
Megha 36_carbpl_35542_2025.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION PETITION (L) NO.35542 OF 2025
Nimesh Singh and Ors. ...Petitioners
V/s.
Synergies Castings Limited and Ors. ...Respondents
______________
Mr. Malcom Siganporia with Mr. Ativ Patel, Ms. Viloma Shah & Mr.
Harshad R. Vyas i/b. M/s. AVP Partners for the Petitioners.
Ms. Venella Reddy with Mr. Abhinay Tiwari i/b.Mr. Mahesh Swami
for the Respondents.
______________
CORAM: SANDEEP V. MARNE, J.
DATED: 28 JANUARY 2026.
P.C.:
1) This is a Petition under Section 9 of the Arbitration and
Conciliation Act, 1996 (the Arbitration Act) for grant of interim
measures before commencement of arbitral proceedings.
2) The disputes and differences between the parties have
arisen out of Securities Subscription Agreement dated 22 March 2024
and Listing Framework Agreement dated 22 March 2024. The interim
measures sought for by the Petitioners are as under:-
(a) Pending the hearing and final disposal of the Arbitration
proceedings or at any time after making the Arbitral Award but
before it is enforced under Section 36 of the Arbitration and
Conciliation Act, 1996, this Hon'ble Court pass necessary
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orders and directions restraining the Respondents from
effectuating transfer of shares of Respondent No.1 held by
Respondents No. 2 to 4 (i.e. the Promoters of Respondent No.
1) to any third party directly or indirectly in any manner;
b) Pending the hearing and final disposal of the Arbitration
proceedings or at any time after making the Arbitral Award but
before it is enforced under Section 36 of the Arbitration and
Conciliation Act, 1996, this Hon'ble Court pass necessary
orders and directions restraining the Respondents from
transferring, alienating, disposing, selling or creating any
encumbrance in any manner on the assets of Respondent No.1
by themselves or any other person;
(c) Pending the hearing and final disposal of the Arbitration
proceedings or at any time after making the Arbitral Award but
before it is enforced under Section 36 of the Arbitration and
Conciliation Act, 1996, this Hon'ble Court pass orders
restraining the Respondent from making any changes in respect
of shareholding or board composition or amending its charter
documents;
(d) Pending the hearing and final disposal of the Arbitration
proceedings this Hon'ble Court direct Respondent to disclose
on oath the utilisation of Rs. 27,18,46,775/- paid to the
Respondent;
(e) Pending the hearing and final disposal of the Arbitration
proceedings or at any time after making the Arbitral Award but
before it is enforced under Section 36 of the Arbitration and
Conciliation Act, 1996, this Hon'ble Court pass an order
directing Respondent No.1 to deposit the sum of Rs.
27,18,46,775/- as invested by the Petitioners before the Office
of the Prothonotary and Senior Master, Hon'ble High Court,
Bombay;
(f) Pending the hearing and final disposal of the Arbitration
proceedings, this Hon'ble Court direct the Respondents to
provide inspection as sought for by the Petitioners in their letter
dated 14th October 2025;
(g) Pass such other or further orders as this Hon'ble Court may
deem fit and proper in the facts and circumstances of the
present case.
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3) By order dated 28 November 2025 this Court has already
granted interim measures in terms of prayer clauses (a) and (c). Order
dated 28 November 2025 reads thus:-
1. On an appearance being marked on behalf of the Respondents by
learned counsel Mr. Mahesh D. Swami, he seeks time to obtain
instructions, as according to him, out of the four Respondents, two of
them are not in India. This statement is contradicted by learned counsel
Mr. Rohaan Cama, by submitting that Respondent No.2 has been served
on her Andhra Pradesh address and in any case, Respondent Nos.1, 3
and 4 are the companies.
2. While I am inclined to grant time to the learned counsel to file
appropriate reply affidavit, learned counsel Mr.Cama would press for ad-
interim order in terms of prayer clauses (a) and (c) to the following
effect :
"(a) Pending the hearing and final disposal of the Arbitration
proceedings or at any time after making the Arbitral Award
but before it is enforced under Section 36 of the Arbitration
and Conciliation Act, 1996, this Hon'ble Court pass necessary
orders and directions restraining the Respondents from
effectuating transfer of shares of Respondent No.1 held by
Respondents No. 2 to 4 (i.e. the Promoters of Respondent No.
l) to any third party directly or indirectly in any manner;
(c) Pending the hearing and final disposal of the Arbitration
proceedings or at any time after making the Arbitral Award
but before it is enforced under Section 36 of the Arbitration
and Conciliation Act, 1996, this Hon'ble Court pass orders
restraining the Respondent from making any changes in
respect of shareholding or board composition or amending its
charter documents."
3. In order to justify passing of an ad-interim order to the aforesaid
effect, Mr. Cama would invite my attention to the Securities
Subscription Agreement dated 22/03/2024 and, in particular, clause
8.3 under the head 'Indemnification', setting out 'Indemnification
Events' and 'Scope of Indemnity'.
The said clause clearly contemplate that the investors have
agreed and acknowledged that notwithstanding anything to the
contrary contained in this Agreement and subject to Paragraph 9 of
Annexure 10, the indemnification obligations of the Indemnifying
parties under this Agreement shall not apply to any event of Losses
arising from or connected with any matter specifically disclosed in
the Disclosure Letter. However, in Clause 8.3., it is specifically
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clarified that on occurrence of the 'Company Indemnity Default',
which is defined as failure by the Company to discharge its
indemnification liability, in full,within the timeline prescribed, the
indemnified parties shall have no recourse against any personal assets
of the Promoters, but they shall claim interest in the Equity
Securities held by them in the Company.
As far as prayer clause (b) is concerned, Mr.Cama would
invite my attention to the Listing Framework Agreement dated
22/03/2024, which has referred to a 'Trigger Event' in form of
clause No.3, by setting out upon occurrence of the Trigger Event; the
Investors shall, at their sole discretion, be entitled, but not obligated,
to exercise the option to require the company and promoters to,
acquire all, but not less than all, the Equity Securities held by the
Investors at the Trigger Price and this being referred to as 'Put
Option'. By specifically relying upon para 3.3, which contemplate
that if the Promoters and the Company fail to consummate the Put
Option for reasons solely attributable to them, on or prior to the
expiry of the Put Option, the consequences set out in the said clause
will follow and this include the following consequences:-
"(i)The Company shall be required to take the prior written
consent of the Investors for undertaking any of the following
actions: (x) issue any Equity Securities to any Person; and (y)
amend the Charter Documents of the Company;
(ii) ... ... ...
(iii) In the event that the Promoters propose to transfer any
Equity Securities held by them to a third party, the Investors
shall be entitled to transfer all (and not less than all) the
Equity Securities held by them in the Company, on the same
terms and conditions as those applicable to the sale of the
Promoters' Equity Securities;
(iv) where the Investors are selling all (and not less than all)
their Equity Securities to a third party, the Investors shall have
the right to require the Promoters to sell all their Equity
Securities, on the same terms and conditions as those
applicable to the sale of the Equity Securities by the
Investors."
4. In the wake of the background facts with reference to the Share
Subscription Agreement and Listing Framework Agreement
executed between the Petitioner and the Respondents, it is the case of
the Petitioner that it subscribed to the subscribed to the First Tranche
Subscription Securities of 34,27,000 OCRPS of Respondent No.l for
an aggregate amount of Rs. 27,18,46,775/- being the First Tranche
Subscription Amount.
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On discovering various irregularities, the Petitioners engaged
in repeated rounds of discussions, requesting them to rectify the
breaches by seeking SEBI approval and proceed with the IPO.
However, since there was complete inaction on part of the
Respondents, the Petitioners issued an Indemnification and Put
Option Exercise Notice to the Respondents, as contemplated under
Clause 8 of the Share Subscription Agreement and clause 3.2,
initiating the Trigger Event under the Listing Framework Agreement.
5. Since the consequences for both are clearly contemplated in the
two Agreements itself, in my considered view, in the wake of the
apprehension expressed in the Petition, the case is made out for grant
of interim relief in terms of prayer clauses (a) and (c), as the
consequences clearly fail in the ambit of the agreement itself.
Hence, ad-interim relief in terms of prayer clauses (a) and (c).
6. The Respondent shall file an affidavit of reply within a period
of four weeks from today, with rejoinder permitted to be file within a
period of two weeks thereafter.
7. List the Petition on 15th January, 2026.
4) After passing of order dated 28 November 2025,
Respondent No.1 has filed an affidavit on 12 January 2026. It would be
apposite to reproduce the averments in paragraphs 5, 7, 8 and 9 of the
said affidavit, which reads thus:-
5. The Respondent submits that it has at all times acted in utmost
good faith and in full compliance with its obligations under the
Transaction Agreements. The Company entered into the Securities
Subscription Agreement and the Listing Framework Agreement
with the genuine and bona fide intention of raising capital for its
business operations and undertaking an Initial Public Offering in
due course. At no point did the Company or its promoters make
any fraudulent misrepresentations or provide any false information
to induce the Petitioners to invest. All information, documents, and
financial statements provided to the Petitioners were prepared in
accordance with applicable laws, audited by independent chartered
accountants, and disclosed in good faith. The Petitioners, being
sophisticated investors represented by reputed legal advisors and
financial consultants, conducted their own comprehensive due
diligence as contemplated under Paragraph 8 of Part A of
Annexure 6 to the Securities Subscription Agreement before
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making the investment decision. The financial, tax and legal due
diligence exercise of the Company by the Petitioners was duly
completed, and the Petitioners and their advisors resolved all issues
raised during such due diligence exercise. It was only after being
fully satisfied with the due diligence findings that the Petitioners
proceeded to invest the First Tranche Subscription Amount of Rs.
27,18,46,775/- in March 2024.
xxx
7. Moreover, during the period when the Company was working
towards the IPO, an unforeseen and tragic event occurred which
materially impacted the timeline and planning for the IPO. Mr.
Shekhar Movva, who was one of the key promoters of the
Company and the driving force behind the IPO plans, passed away
unexpectedly. His untimely demise was a significant setback for the
Company and necessitated a revision of the IPO timelines to allow
for necessary restructuring and reorganization. This was an event
of force majeure that could not have been anticipated or prevented
by the Company. The Petitioners, instead of showing
understanding and cooperation during this difficult time, have
chosen to exploit this unfortunate situation to make exaggerated
claims and to pressurize the Respondents. This conduct clearly
demonstrates the lack of bona fides and commercial morality on
the part of the Petitioners.
8. Further, it is submitted for sake of complete disclosure that there
is an Insolvency Bankruptcy proceeding initiated by Overseas Bank
against Respondent No. 1 Company before the National Company
Law Tribunal Hyderabad (titled Indian Overseas bank v. Synergies
castings Limited numbered CP (IB) 171/7HDB/2025). The matter
is pending before the Hon'ble Tribunal and the same is posted to 12
February 2026.
9. Turning to the allegations regarding diversion and
misappropriation of funds, the Respondent categorically denies all
such allegations which are nothing but wild and reckless
accusations made without any factual or legal basis. The funds
received from the Petitioners pursuant to the First Tranche
subscription were utilized for legitimate business purposes of the
Company in accordance with Clause 2.4 of the Securities
Subscription Agreement. The said clause provides that the
Subscription amount shall be utilized by the Company for business
purposes as determined by the Board. The Company has full
discretion to deploy the funds for various business purposes
including working capital requirements, capital expenditure, debt
repayment, acquisition of assets, and other corporate purposes. The
utilization of funds is subject to the oversight of the Board of
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Directors of the Company, which includes independent directors
and is governed by the provisions of the Companies Act, 2013.
(Emphasis added)
5) Mr. Siganporia, the learned counsel appearing for the
Petitioners expresses an apprehension that passing of any order of
Corporate Insolvency Resolution Process in Company Petition pending
before the National Law Tribunal, Hyderabad would jeopardize the
interim measures sought by the Petitioners in the present Petition. He
accordingly, presses interim measures in terms of prayer clauses (d) and
(e). In prayer clause (d) Petitioners have sought disclosure about
utilisation of Rs. 27,18,46,775/- paid to the Respondent.
6) In my view, the interim measures in terms of prayer clause
(d) deserves to be granted at this stage in view of a specific averment in
paragraph 9 of the Affidavit dated 12 January 2026 that the funds have
been utilised for legitimate business purposes in accordance with clause
2.4 of Securities Subscription Agreement.
7) So far as interim measures in terms of prayer clause (e) are
concerned, in my view, the same would require prima facie
adjudication about Petitioners' entitlement to claim back the invested
amount. In that view of the matter, it would be appropriate if the
Petitioners are relegated to a remedy under Section 17 of the
Arbitration Act for seeking interim measures in terms of prayer clause
(e) in addition to any other interim measures.
8) Ms. Reddy, the learned counsel appearing for Respondent
Nos.1 to 4 fairly agrees that parties have agreed for resolution of
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disputes and differences through mechanism of private arbitration. She
submits that the Respondents are agreeable for constitution of Arbitral
Tribunal. In my view therefore, the Arbitral Tribunal can be constituted
and Petitioners can be relegated to remedy under Section 17 of the
Arbitration Act in respect of any other interim measures. Till that time,
interim measures already granted in terms of prayer clauses (a) and (c)
can be continued in addition to grant of additional interim measures in
terms of prayer clause (d).
9) Mr. Siganporia submits that since pleadings in the Petition
are complete, the Petition be permitted to be converted as an
Application under Section 17 of the Arbitration Act.
10) Accordingly, I proceed to pass the following order:-
(A) Smt. Justice Anuja Prabhudessai, former Judge of this Court
is appointed as Sole Arbitrator to adjudicate upon the disputes
and differences between the parties arising out of Securities
Subscription Agreement dated 22 March 2024 and Listing
Framework Agreement dated 22 March 2024. The contact
details of the Arbitrator are as under :
Office Address :- 106, Arcadia Building, NCPA Marg,
Nariman Point, Mumbai-400 021.
Mobile No. :- 9823855445
Email id :- [email protected]
(B) A copy of this order be communicated to the learned sole
Arbitrator by the Advocates for the Petitioner within a period of
one week from the date of uploading of this order. The Applicant
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shall provide the contact and communication particulars of the
parties to the Arbitral Tribunal alongwith a copy of this order.
(C) The learned sole Arbitrator is requested to forward the
statutory Statement of Disclosure under Section 11(8) read with
Section 12(1) of the Act to the parties within a period of 2 weeks
from receipt of a copy of this order.
(D) The parties shall appear before the learned sole Arbitrator
on such date and at such place as indicated by her, to obtain
appropriate direction with regard to conduct of the arbitration
including fixing a schedule for pleadings, examination of
witnesses, if any, schedule of hearings etc.
(E) The fees of the sole Arbitrator shall be as prescribed under
the Bombay High Court (Fee Payable to Arbitrators) Rules, 2018
and the arbitral costs and fees of the Arbitrator shall be borne by
the parties in equal portion and shall be subject to the final
Award that may be passed by the Tribunal.
11) Present Petition is permitted to be converted into
Application under Section 17 of the Arbitration Act, which shall be
decided on its own merits by the Arbitral Tribunal without being
influenced by the present order.
12) Till the Arbitral Tribunal decides the Application under
Section 17 of the Arbitration Act, the ad-interim relief already granted
in terms of prayer clauses (a) and (c) shall continue to operate.
Additionally, there shall be further ad-interim relief in terms of prayer
clause (d) till the next date of hearing. The Respondents shall file
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affidavit of disclosure in terms of prayer clause (d) before the Arbitral
Tribunal within a period of two weeks. Considering the fact that the
next date of hearing in the Company Petition is 12 February 2026,
Petitioners would be at liberty to press further interim measures
without waiting for filing of disclosure affidavit by the Respondents.
13) All rights and contentions of the parties are expressly kept
open.
14) With the above directions, the Petition is disposed of.
[SANDEEP V. MARNE, J.]
Signed by: Megha S. Parab
Designation: PA To Honourable Judge 28 January 2026
Date: 28/01/2026 19:50:28
