The National Company Law Tribunal has classified Juliet Apparels as a quasi-partnership, ordering the innerwear firm to grant a board seat to the rival founding family faction. While the founder’s reinstatement was rejected, this ruling mandates shared governance, addressing ongoing allegations of management oppression.
The National Company Law Tribunal (NCLT) has delivered a significant ruling concerning the Mumbai-based innerwear brand Juliet Apparels, formally declaring the company a quasi-partnership between two feuding branches of its founding family. The tribunal's decision follows a legal battle initiated by founder Gunvant Trevadia and his son, who had approached the court citing instances of oppression and mismanagement within the private company.
Board Representation and Governance Changes
While the NCLT denied the specific request to reinstate Gunvant Trevadia as a director, it acknowledged the historical context of the firm's formation. The company was originally created through the merger of several family-owned partnership businesses. Because of this background, the tribunal determined that the business functions more like a partnership than a traditional corporate entity. Consequently, the NCLT bench, consisting of judicial member Sushil Mahadeorao Kochey and technical member Prabhat Kumar, ordered the company to provide a board seat to the faction represented by the petitioners. This move is aimed at ensuring proportional representation for the family group that had been previously removed from management roles.
Allegations and Legal Disputes
The legal conflict between the family factions involved several serious charges under the Companies Act. The petitioners had alleged that their rights were violated through the transfer of 747,000 shares belonging to Trevadia’s wife and son. Furthermore, the petition challenged board decisions that shifted banking and management powers, as well as the restriction of access to internal company records. The conflict intensified in February 2025 when Gunvant Trevadia was removed from his position as a director. The opposing family faction had argued that Trevadia’s personal conduct justified his removal and made him unfit to continue leading the company.
Investor and Business Impact
For stakeholders in private entities like Juliet Apparels, this ruling highlights the potential risks associated with family-run businesses that transition from partnerships into private companies without clear governance agreements. When such companies face internal disputes, operations can be significantly disrupted by claims of oppression and mismanagement. The legal recognition of a quasi-partnership means that even if a group does not hold a majority of shares, the court may still enforce their right to participate in the company’s affairs. Investors or potential partners looking at firms with similar family-structure origins should track how these governance mandates affect the company's decision-making process, management stability, and overall operational efficiency in the coming quarters.