The Roys of Peerless received a shot in the arm from the National Company Law Appellate Tribunal (NCLAT) which set aside a lower tribunal order and reinforced the family’s control over one of Bengal’s storied business houses.

The appellate tribunal ruled that corporate decisions taken more than three decades ago are good in law, setting aside challenges mounted by Parasmal Lodha, a founder director and an early investor of Peerless.

At the heart of the controversy lay a decision taken in 1987-88, when Peerless undertook a private placement of 30,000 equity shares to strengthen its capital base. The move, approved by both the board and shareholders, also coincided with Lodha’s transfer of 15,626 shares to certain entities linked to the Roys.

What began as a routine corporate action later snowballed into a prolonged legal battle, with Lodha alleging that the transactions were designed to shift control of the company and involved misuse of funds. These allegations formed the basis of a company petition that remained under judicial scrutiny for over 30 years, making it one of the longest-running corporate feuds in India.

In 2022, the Calcutta bench of the National Company Law Tribunal (NCLT) held both the issue and sale of shares as void. At that time, Lodha claimed he held a 47 per cent share in Peerless General Finance & Investment, which has business interests in healthcare, hospitality and real estate. On Thursday, NCLAT set aside the NCLT order and upheld the issue and sale of shares.

Welcoming the judgment, Jayanta Roy, managing director of PGFI, said the ruling brought closure to a long-standing matter and vindicated the company’s position. “It reaffirms our commitment to conduct business with integrity, transparency and accountability,” he said, adding that PGFI sustained strong momentum with revenues significantly increasing over the past several years.

However, Lodha hinted at continuing the legal feud. “It is too premature to comment as NCLAT is not the battle finale. It will continue in the Supreme Court and there will be a review (petition) and a curative (petition),” Lodha said this evening, claiming his holding in Peerless before the NCLT Calcutta ruling was 23 per cent.

But it was two shareholders of Peerless, namely Ajit Kumar Chatterjee and Argha Kusum Chatterjee, who initially disputed the corporate decisions in a petition filed under sections 397 and 398 of the Companies Act, 1956.

The petition was also supported by the present respondent, Bhagwati Developers Private Limited (earlier known as Lodha Services Pvt Ltd), among others.

While the Chatterjees withdrew from the proceedings later, BDPL was permitted to be included in place of Chatterjees in the proceedings. Thereafter, BDPL carried on as petitioner before the NCLT Calcutta bench, which passed the order in 2022 and was subsequently challenged before the NCLAT.

During arguments, Peerless was represented by Harish Salve and Ratnanko Banerji, with Arunabha Deb and Ashika Daga, while BDPL was represented by Jishnu Saha.

Arunabha Deb, partner of Avijit Deb Partners, said, “We welcome the NCLAT judgment. It is an endorsement of the merits of the case and the diligence with which it was pursued.”