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2026 DIGILAW 86 (TS)

Sukhii Projects LLP v. Union of India, Rep. by its Principal Secretary FS, Department of Financial Services, Ministry of Finance, New Delhi

2026-01-09

NAGESH BHEEMAPAKA

body2026
ORDER : Nagesh Bheemapaka, J. This Writ Petition questions the inaction of Respondents 4 and 5 in effecting change in authorised signatories of the current account of petitioners' firm in their banks, as per the Board Resolution dated 21-12-2024. A direction is sought to Respondents 4 and 5 to implement the change forthwith. The grievance of petitioner is that respondent banks have refused to honour and implement a valid board resolution duly passed in accordance with the LLP Agreement and confirmed by the Arbitral Award. The impugned refusal lacks authority of law, violates the LLP's contractual autonomy, and infringes upon Articles 14, 19 (1) (g) and 300-A of the Constitution. Petitioner further challenged the order of the 3rd respondent dated 25-08-2025 as illegal and arbitrary. 2. The brief facts of the case are, petitioner is a limited liability partnership firm for purchase and development of lands, construction of flats thereof, residential and commercial complex or complexes either singly or jointly or in partnership, comprising offices for sale or self-use or for earning rental earning thereon by letting out individual units in such units. The firm also intends to purchase any movable or immovable property including industrial, commercial, residential or farm lands, plots, buildings, houses, apartments, flats or areas within the limits of Municipal Corporation etcetera 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 of land at Uppal Bhagayat wherein 170 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 prospective buyers and they have entered into various agreements initially whereas certain agreements have been entered after construction was completed. During pendency of execution of sale agreements, some of the partners of petitioner, i.e. Respondents 6 and 7, who were not partners in the initial LLP Agreement were introduced as partners, by virtue of supplementary Agreement dated 08-01-2022, by adopting most of the Clauses of the primary LLP Agreement. To substantiate their contention that if a majority passes an issue, it becomes binding. 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 firm meeting shall be decided by a resolution passed by a majority partners present in person or through authorised representative and each partner shall have one vote (matters to be decided by a resolution passed by a majority number of the partners who are more specifically described in the Schedule 2 annexed thereto). All the partners are required to vote. Clause 61: The matters shall be decided by a resolution by all partners 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 Schedule 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 reads 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 by any of the parties/partners to this agreement herein above mentioned." The above mentioned Clause 10 is substituted in the supplementary agreement as follows: " It is expressly agreed that the Bank Accounts of the LLP shall be operated jointly by Mr. Srinivasulu Kanday along with Mr. Ramesh Kanday or Goutham Bacha." 2.3. Petitioner clarified that the subsequent Clause 10 which was incorporated clarified the above. It is further stated, the above Clause was modified vide Board Resolution dated 18-11-2023 whereby the 7th respondent also would be jointly operating the bank accounts of petitioner along with Mr. Srinivasulu Kanday and Mr. Ramesh Kanday. Despite the 7 th respondent been authorised to sign the cheques along with others, for the reasons best known to him, he started acting detrimental to the interests of petitioner firm. 2.4. While things stood thus, Respondents 6 and 7 initiated arbitration proceedings against petitioner and other designated partners. The Arbitral Tribunal passed the Award on 12-08-2025. Petitioner referred to paras 123, 124, 125, 127, 128, 130 & 131 of the Award to refute the allegations made by Respondents 6 and 7, as baseless. 2.5. 2.4. While things stood thus, Respondents 6 and 7 initiated arbitration proceedings against petitioner and other designated partners. The Arbitral Tribunal passed the Award on 12-08-2025. Petitioner referred to paras 123, 124, 125, 127, 128, 130 & 131 of the Award to refute the allegations made by Respondents 6 and 7, as baseless. 2.5. Subsequently, petitioner has taken a decision by a Board Resolution dated 21-12-2024 to re-implement the original Clause 4 of the supplementary Agreement dated 08-01-2022. Further, petitioner stated that the latest developments cropped up, after the Board Resolution dated 21-12-2024 was conveyed to Respondents 4 and 5 banks, which, instead of honouring the Board Resolution, strangely informed the designated partners and petitioner 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 other competent authority. Respondent No. 5 informed petitioner vide letter dated 19-08-2025 that they cannot accede to their wish to update their bank records enabling a newly- authorised signatory to operate the bank account and advised them to submit fresh Board Resolution signed by all designated partners. Petitioner contended that left with no option, they made a complaint to the Ombudsman but the same was rejected in a mechanical manner and a non-speaking order was passed vide proceedings dated 25.08.2025. 3. Respondents 6 and 7 filed counter and also synopsis stating that LLP was incorporated on 05.12.2009 under the LLP Act 2018 with Rs.1,00,000/- 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.50,000/- each. Petitioner LLP obtained loan of Rs.25 crores from the 6 th 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 6 th respondent company shall be inducted as a partner with 40% share in the LLP. To the said MOU, Respondents 6 and 7 companies and four others were inducted as partners vide supplementary Agreement dated 08-01-2022, totalling eight partners. 3.1. To the said MOU, Respondents 6 and 7 companies and four others were inducted as partners vide supplementary Agreement dated 08-01-2022, totalling eight partners. 3.1. The contribution/share of the 6 th respondent company was 40%; Rs.40,000/- out of Rs.25 crores was adjusted towards contribution/share of the 6th Respondent Company and balance of Rs.24,99,60,000/- (25,00,00,000/- LESS 40,000) was deemed to be the loan extended to Petitioner LLP by the 6th Respondent Company as per Clause 50 of the LLP Agreement and Section 66 of the LLP Act, 2008. 3.2. Similarly, with respect to the 7 th Respondent, out of Rs.4.80 crores paid to Petitioner LLP, Rs.15,000/- was adjusted towards his share/contribution and balance Rs.4,79,85,000/- was deemed to be loan as stated above. The gist and crux of the submissions narrated by these respondents reflect that they are in minority and the remaining partners belong to the other group or that they are in majority. Taking advantage of the numbers, petitioner passed Resolution as tailor-made. The Resolutions which petitioner relied upon is detrimental to the interests of Respondents 6 and 7, therefore, they were not informed about the meeting. Subsequently, they were informed through an e-mail of the Board Resolution. It is further contended that Resolutions were forwarded to the bank without their knowledge and rightly respondent banks have rejected their proposal, therefore, the accounts of the firm were frozen. Even the complaint to the Ombudsman fetched the same results since the issue involved in the resolution pertains to the finance and the interests of the partners are involved. It is not a case where, as stated by petitioner, the consent of respondents was required expressly mentioned in the schedule such as dissolution, change of capital structure but does not include operation of the bank accounts. 3.3. Respondents also stated that the Ombudsman, ie. the 3 rd Respondent, by proceedings dated 25-08-2025 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. 150 of 2025 before the Principal Special Court in the Cadre of the District Judge for Trial and Disposal of Commercial Disputes, City Civil Court at Hyderabad. 3.4. 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 10(2)(b)(ii) of the said Scheme. Resting on the issue of Arbitral Award, Respondents stated that their written arguments dated 18.07.2025 were not even referred to by the Learned Arbitrator, leave alone considering them and thus, violating Sections 18, 24, 33 and 28, 31 (3), 34 (2) (iii) of the Arbitration and Conciliation Act 1996. This is a patent illegality in the Award and therefore, liable to be set aside under Section 34 (2) (A) of the 1996 Act. 3.5. Respondents 6 and 7 further contended that Writ Petition is not maintainable against respondent banks to whom a direction was sought to permit petitioner to operate the frozen accounts to deal with financial affairs of the firm. 4. Heard Ms. Manjari S. Ganu, learned counsel for petitioner, Ms. N.V.R. Rajya Lakshmi, learned Central Government Standing Counsel on behalf of Respondent No.1, M/s N. Legal, learned counsel on behalf of Respondents 2 and 3, Smt. Muvva Sri Lakshmi, learned counsel on behalf of Respondent No.4 and Sri B. Srinarayana, learned counsel on behalf of 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 & Manufacturing Co. v. Union of India , (1976) 2 SCC 981 Harbanslal Sahnia v. Indian Oil Corporation , (2003) 2 SCC 107 and that of Allahabad High Court in Proview Constructions Limited v. Union of India , 2025 AHC20822 DB 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. The Hon’ble Supreme Court in Federal Bank Ltd. V. Sagar Thomas , (2003) 10 SCC 733 , held that no writ is maintainable against the private banks since banks have their own resources to raise funds and the Board of Directors are elected by the shareholders like any other private company in banking business. The Hon’ble Supreme Court in Federal Bank Ltd. V. Sagar Thomas , (2003) 10 SCC 733 , held that no writ is maintainable against the private banks since banks have their own resources to raise funds and the Board of Directors are elected by the shareholders like any other private company in banking business. Mere regulatory supervisory role of the State does not confer the status of State on private banks under Article 12 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, there are disputed questions of fact which cannot be decided by this Court. The Writ Petition is therefore, liable to be dismissed. 8. The Writ Petition is accordingly, dismissed. However, petitioner is at liberty to approach the appropriate legal forum to ventilate their grievance. No costs. 9. Consequently, the miscellaneous Applications, if any shall stand closed.