Delhi High Court backs BharatPe parent in shareholder dispute with Unity Bank

Court rejects Unity Bank appeal, stands by BharatPe parent

The Delhi High Court’s division bench dismissed Unity Bank’s appeal this week, leaving interim protection intact for Resilient Innovations Private Limited (RIPL), BharatPe’s parent company. The judges ruled Unity Bank cannot proceed on reserved matters without written consent from both RIPL and Centrum, its co-shareholders.

The decision rests on the Shareholders’ Agreement (SHA) all three parties signed, which explicitly requires unanimous written approval for reserved matters.

‘Inadvertent error’ excuse fails as court upholds SHA

Unity Bank argued its failure to secure consent was an ‘inadvertent error.’ The court called this an ‘argument of desperation,’ noting the bank itself had formally requested RIPL’s consent—proof it understood the requirement.

At the heart of the ruling is Clause 8 of the SHA. The clause contains a non obstante provision, which gives it precedence over any conflicting language in the company’s Articles of Association. As a result, reserved matters still demand written approval from both RIPL and Centrum.

RBI’s silence on SHA strengthens its legal standing

Unity Bank also claimed the Reserve Bank of India (RBI) had rejected the SHA. The court clarified the RBI never objected to the agreement after it was submitted for approval.

The bench added its injunction does not conflict with any RBI directive. Instead, it simply enforces the terms all parties agreed to in Clause 8.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

The decision reinforces that shareholder agreements—especially those with non obstante clauses—can override a company’s Articles of Association, even without explicit regulatory approval. For founders and investors, this means reserved-matter clauses requiring written consent are legally binding, and courts may reject excuses like ‘inadvertent error’ when parties have already acknowledged the obligation.

Key takeaways

• Shareholder agreements with non obstante clauses can override conflicting provisions in a company’s Articles of Association.
• Written consent requirements for reserved matters are enforceable, even if a party claims oversight.
• Courts may dismiss arguments that weaken contractual obligations, particularly when a party has previously complied with those obligations.
• A shareholders’ agreement submitted for regulatory review—but not rejected—holds significant legal weight in disputes.

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