Case Note & Summary
The National Company Law Appellate Tribunal dismissed appeals challenging the National Company Law Tribunal's order that upheld mediated consent terms in a company petition under the Companies Act, 1956 -- The appellants, Sonali Prashant Shinde and Accurate Engineering Company Pvt. Ltd. & Ors., sought to set aside consent terms dated 07.01.2023, alleging they were executed under coercion, undue influence, and duress during mediation -- The Tribunal analyzed the Indian Contract Act, 1972, particularly Sections 10, 14-19, and found the appellants failed to prove coercion as it requires actions forbidden by the Indian Penal Code, 1860 -- Allegations of undue influence were deemed vague without evidence of dominating influence, and duress was not recognized under the Act -- The consent terms were declared valid and binding, as the parties were in equal positions and of sound mind -- The appeals were rejected, affirming the impugned order dated 03.10.2023
Headnote
The National Company Law Appellate Tribunal, Principal Bench, New Delhi, dismissed Company Appeal (AT) Nos. 211 and 212 of 2023, challenging the impugned order dated 03.10.2023 of the National Company Law Tribunal, Mumbai -- The appeals sought to declare the consent terms dated 07.01.2023 unenforceable and set them aside, alleging coercion, undue influence, and duress during mediation -- The Tribunal held that the appellants failed to prove coercion as defined under Section 15 of the Indian Contract Act, 1972, which requires actions forbidden by the Indian Penal Code, 1860 -- It ruled that allegations of undue influence under Section 16 of the Indian Contract Act, 1972 were vague and unsupported by evidence of dominating will or undue advantage -- Duress was not equated with coercion under the Act and was ruled out due to lack of proof -- The consent terms were upheld as enforceable, binding the parties who were of full age and sound mind in equal positions -- The Tribunal emphasized the presumption of free consent and the burden on the appellants to establish vitiating factors
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Issue of Consideration: The Issue of Consideration was whether the consent terms dated 07.01.2023, resulting from mediation proceedings, were vitiated by lack of free consent due to coercion, undue influence, and duress, and thus unenforceable under the Indian Contract Act, 1972
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Final Decision
The National Company Law Appellate Tribunal dismissed both appeals, upholding the impugned order dated 03.10.2023 -- The consent terms dated 07.01.2023 were declared enforceable and binding on the parties
