WP/26652/2025 of M/s. Sukhii Projects LLP Vs Union of India on 9 January 2026

ORDER:

. This Writ Petition questions the inaction of Respondents 4 and 5 in effecting change in authorised signatories of the current account of petitioners' hrm in their banks, irs per the Board Resolution dated 2l l2-2O24. A direction is sought to Respondents 4 and 5 to impiement the change firrthwith. The grievance of petitioner is that respondent banks h ave refused to honour and implement a valid board resolution duly passed in accordaace with the LLp Agreement and con irmed by the Arbitral Award. The impugned refusal lacks aur.hority of law, violates the LLP's contractual autonomy, E-

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? and infringes upon Articles 14, 19 (1) (g) and 300-A of the Constitution. Petitioner further challenged the ordcr of the 3'd respondent dated 25-O8 2025 as illegal and arbitrary.

2. The brief facts of the case are, petitioner is a limited liabilify partnership lirm for purchase and development of lands, construction of flats thereof, residential and commercial complex or complexes either singly or jointly or in partnership, comprising olfices for sale or sell use or for earning rental earning thereon by letting out individual units in such units. The {irm also intends to purchase any movablc or immovable property including industrial, commercial, residential or farm lands, plots, buildings, houses, apartments' flats or areas within the limits of Municipal Corporation etcctera and to divide the same into suitable plots and. to rent or sell the plots for buildings, constructing residential houses, bungalows, business premises, colonies etcetera.

2.1. Petitioner is stated to have acquired certain lands for various developmental activities and the subject matter is with regard to development ol land at Uppal Bhagayat wherein 17O flats have been constructed in an area around 6425 sq. yards. The construction activity was started in 2022 and completed and most of the units have been pre-booked by the prospecr.ive buyers and they have entered into various agreements initially' whereas certain agreements have been entered after construction was completed. During pendency of execution ol' sale agreements, some of the partners of petitioncr, i.e. ResJronclents 6 and 7, who were not partners in the initial LLP Agreement were introduced as partners, by virtue of supplementary Agreement dated 08-O 1-2 O22, by adopting most ol the Clauses of the primary LLP Agreement. To substantiate their contention that if a majority passes an issue, it becomes binding. Petitioner relied upon the following Clauses 60 and 61 of primary LLP Agreement: " Clause 60: The matters discussed in the hrm meeting shall be dcci,led bv a resolution passed by a majority partners present rn person or through authorised reprresentative and each partner shall -have orie vote (matters to be .decided by a resolution passed b_r a majoritr nurnber of the partners who are more specihcatly described in the Sch':riule 2 annexed thereto). All the partners are required to vote. Clause 61: The matters shall be decided by a resolution by all partllers present in person or through authorised representative and in this regard each partner shall have one vote (matters to be decided by a resolution passed by all partners which are more specifically described in Scherlule 3 annexed thereto). All the partners are required to vote.

2.2. Petitioner further stated that original Clause 10 of LLP partnership Agreement was replaced by another clause which re nds as under:

" Current Account can be opened with any Bank as agreed by all the Partners or majority of the Partners. All the cheques of the banks can be signed bv any of the parties/partners to this agreement herein abovc mentioned." The aLrove mentioned Clause 1O is substituted [t the supplemcntary agreement as follows " It is expressly agreed that the Bank Accounts oI the LLP shall be operated jointly by Mr' Srinivasulu Kandav along with Mr' Ramesh Kanday or Goutha#iBacha."

2.3. Petitioner clarihed that the subsequent Clause 10 which was incorporated clarifred the above. [t is further stated, the above Clause was modified uide Board Resolution dated 18- 1 l-2O23 whereby the 7n respondent also rx'ould be jointly operating the bank accounts of petitioner along with Mr' Srinivasulu Kanday and Mr. Rasresh Kanday' Despite the 7th respondent been authorised to sign the cheques along n'ith others, for the reasons best known to him, he started acting detrimental to the interests of petitioner flrm' 2.4 . While things stood thus, Respondents 6 and 7 initiated arbitration proceedings against petitioner and othqv designated partners. The Arbitral Tribunal passed the Arvafd on l2-O8-2O25. Petitioner referred to paras 123, 124, 125, 127,

128, 13O & 131 of the Award to refute the allegations made by Respondents 6 and 7, as baseleSs.

2.5. Subsequentll,, petitioner has taken a decision by a Board Rt:solution dated 21-12-2024 to re-implement the original Clause 4 of the supplementary Agreement dated 08-O1-2022. Further, petitioner stated that the latest developments cropped up, after the Board Resolution dated 2l-12-2024 was conveyed to Respondents 4 and 5 banks, which, instead of honouring the Board Resolution, strangely informed the designated partners and petit,ioner that their request for updating the records, with newly authorised signatory to operate petitioner's accounts, cannot be acceded to, since it is not accompanied by either the unanimous authorisation of the partners or binding directive addressed to the 4th Respondent bank from the Tribunal, Court or any othcr compctent authority. Respondent No. 5 informed petitione- ukle letter dated 19-O8-2O25 that they cannot accede to their wish to update their bank records enabling a newly- authorisr:d signatory to operate the bank account and advised them to :;ubmit fresh Board Resolution signed by alt designated partners. Petitioner contended .that left with no option, t1-ey made a complaint to the Ombudsman but the sarne was rejected in a mechanical manner and a non-speaking order was passed uide proceedings dated 25.O8.2025.

3. Respondents 6 and 7 filed counter and also synopsis stating that LLP was incorporated on O5.12.2OO9 under the LLP Act 2018 with Rs.1,00,0OO/ as share capital. Initially, LLP was formed with two share-holders i.e. K. Srinivasulu and K. Santosh with shares of 50% each i-e. Rs.5O,OOO/ each. Petitioner LLP obtained loan of Rs-25 crores from the 6th respondent company under MoU dated 13.12-2021, as per which other covenants a) amount including interest totalling Rs.45 crores was to be paid on 12-06.2024; and

b) further the 6e respondent coinpany shall be inducted as a partner with 4oolo share in the LLP. To the said MOU, Respondents 6 and,7 companies lind four others were inducted as partners uide supplementary Agreement dated 08 Ol 2022, totalling eight partners.

3. i. The contribution/share of the 6e respondent company was 4O%o; Rs.40,00O/- out of Rs.25 crores was adjusted towards contribution/ share of the 6th Respondent Company and balance of Rs.24,99,6O,OOO/- (25,OO,00,0OO/- LESS 4O,OO0) was deemed to be the loan extended to Petitioner

LLP by the 6th Respondent Company as per Clause 5O of the LLP Agr,:ement and Section 66 of the LLp Act, 2OOg.

3.2. Similarly, wrth rcspect to the 7e Respondent, out of Rs.4.80 crores paid to Petitioner LLp, Rs. 15,OOO/- was adjusted towards his share / r:ontribution and balance Rs.4,79,g5,000/ - was deetned to be loan as stated a,bove. The gist and crr.rx of the submissions narrated by these respondents reflect that they are in minoriq, and thr: remaining partners belong to the other group o: that they are in majority. Taking advantage of the number:;, petitioner passed Resolution as tailor-made. The Resolutions which petitioner relied upon is detrimental to the interests o[ Respondents 6 and 7, therefore, they were not informed about the meeting. Subsequently, they were informed ttirough an e-mail of the Board Resolution. . It is further contendr d that Resolutions were forwarded to the bank without their kntwledge and rightly respondent banks have rejected their proposal, therefore, the accounts of the lirm were frozen. Even the complaint to the Ombudsman fetched the same results since the issue involvecl in the resolution pertains to the finance and the interests of the partners are involved. It is not a case where, ar; stated by petitioner, the consent of respondents was required expressly me ntioned in the schedule such as I

dissolution, change of capital structure but does not include operation of the bank accounts.

3.3. Respondents also stateci that the Ombudsman, re' the 3.d Respondent, by proceedings dated 25-08-2o25 impugned in this Writ Petition, held that "if such disputes are pending between the partners and are not resolved by the appropriate forum, such a complaint or representation by the Petitioner LLP or others is not maintainable." Further, the contents in the petition of the petitioner are the subject matter of COP No' 15O of 2025 before the Principal Special Court in the Cadre of the District Judge for Trial and Disposal o[ Commercial Disputes' City Civil Court at HYderabad. 3,4. With regard to the Award passed by the Arbitrator and the time for challenge, respondents stated that the issue or dispute is said to be pending and therefore, falls within Para 1O(2[bxii) of the said Scheme. Resting on the issue of Arbitral Award, Respondents stated that their written arguments dated l8.O7 .2025 were not even referred to by the lrarned Arbitrator, leave alone considering them and thus, violating Sections 18, 24, 33 arid 28, 31 (3), 34 (2) (iii) of the Arbitration and Conciliation Act 1996' This is a patent illegality in the Award E

q and therefore, liablc to be set aside under Section 3a (2) (e) of the 199 3 Act.

3.5. Responrlents 6 and 7 further contended that Writ Petition is not malntainable against respondent banks to whom a direction was sought to permit petitioner to operate the frozen accounts to deal u,ith financial affairs of the firm.

4. Heard Ms. Manjari S. Ganu, learned counsel for petitionor, Ms. N.V. R. Rajya Lakshmi, learned Central Governntent Star-rding Counsel on behalf of Respondent No.l, M/s N. Legal, learnt:d counsel on behalf of Respondents 2 and learned counsel on behalf of Respoircent No.4 and Sri B. Srinarayana, learned counsel on behalf oi'Respondents 6 and 7

5. In support of his contentions, learned counsel relied on the judgments of the Hon'ble Supreme Court in Siemens Engineering & ManuJacturing Co. a. (Jnion of Indiat, Harban;slal Sahnia o. Indidn Oil Corporationz arrd that of Allahabad High Cotrrt in Prooieu Constructions Lirnited. a. Union o.f Indios.

Smt. Muwa Sri Lakshmi, ' l tezo.y z sr:c et t '1u oo:) z sr:c toz ' zoz-s agc.to8:: oB

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6. From a perusal of the documents and after hearing counsel of both the parties and on a consideration of facts of the case, it is to be seen, the issue involved is between partners of LLP and it is not related to Respondent banks, as contended by petitioner. Further, respondent banks are not the instrumentalities of State as per Article 12 of the Constitution' t The Hon'ble SLpremc Court in Federal Bo,nk Ltd. V. Sagar Thoma.*, hetd that no rvrir- is maintainable against the private banks since banks have their ou'n resources to raise funds and the Board of Directors are elected by the shareholders like any other privale company in banking business- Mere regulatory supervisory role of the State doer: not confer the status of State on private banks under Article I 2 of the Constitution' 7 . With regard to exercise of extraordinary discretionary power under Article 226, there must be a violation of a statutory right or violation of Fundamental Rights and since there is no such violation in the case on hand, the writ petition is failed and dismissed. Furthermore, the order of the Ombudsman is a speaking order and the observations by it are tenable. Therefore, the issue involved in the Writ Petition cannot be agitated under Art.226 of the Constitution. Not only that, o (zoo:t) io scc 733 ia I I I (\ _ 1-\

ll there ar: disputed questions of fact u.hich cannot be decided by this Cou rt. 'l'he Writ Petition is thcrefore, liable to be dismissed.

8. The Writ Pcrition is accordingly, clismissed. Hou,ever, pctitioner is at liberty to approach thc appropriale legal forr,rm to ventilirlc their grievance. No costs. q. Consequently, the miscellancous Applications, if any shall stand closr.d. \ To, ,TRUE COPY//

1. One CC to MS.MANJARI S.GANU, Advocate. [OPUC]

2. One CC to Ms.N.V.R.RAJYA LAKSHMI, SC for Central Government. [OPUCI

4. One CC to SMT.MUWA SRI LAKSHtvtt, Advocate. [OPUC]

5. One CC to SRI B.NARAYANA, Advocate. [OPUC]

6. Two CD Copies. 8SK BS \4- SD/.MOHD. ISMAIL DEPUry REGISTRAR L_---.- SECTION OFFICER

HIGH COTJRT DATED:0{110112026 $'lr..

ORDER

WP.No.26652 of 2025 DISMISSING THE WRIT PETITION WITHOUTCOSTS A}i SFAT S oo 2tl?[ J ? t * * -rt{^ D Y'#