Unity Small Finance Bank has lost its appeal. The Delhi High Court has held that the bank cannot table a proposal to raise its authorised share capital without the written consent of BharatPe’s parent company, and has called the bank’s plea of “inadvertent error” an argument of desperation.
New Delhi: A Division Bench of the Delhi High Court has upheld an interim injunction restraining Unity Small Finance Bank from placing before its Board a proposal to increase its authorised share capital without the prior written consent of Resilient Innovations Private Limited, the parent company of BharatPe, holding that the shareholders’ agreement between them classifies the change as a “Reserved Matter” [Unity Small Finance Bank v. Resilient Innovations Pvt. Ltd. and Ors.].
The Bench of Justice C. Hari Shankar and Justice Vinod Kumar pronounced the judgment on November 5, 2026 in FAO(OS) (COMM) 221/2026, after reserving it on September 1. Justice C. Hari Shankar authored the 59-page ruling.
Unity’s case and Resilient’s reply
Senior Advocate Mukul Rohatgi, for Unity, argued that the capital increase was needed to comply with Reserve Bank of India requirements on dilution of shareholding, that the RBI had directed deletion of Reserved Matters from Unity’s Articles of Association, and that the agreement could not override the Articles. He also contended that the injunction had been passed in haste, that a Board meeting could not be injuncted, and that Clause 5.1 of the agreement, not Clause 5.2, applied.
Senior Advocate Gopal Subramanium, for Resilient, pointed out that Unity’s own Board agenda described the proposal as a Reserved Matter and that the bank had sought Resilient’s consent on three occasions between October 2025 and July 2026.
The agreement behind the dispute
Resilient and Centrum Financial Services Limited, which hold 49% and 51% of Unity respectively, signed a shareholders’ agreement with the bank in October 2021. Clause 8 and Schedule 2 of the agreement list “Reserved Matters”, including changes to the bank’s capital structure, on which no decision or action can be taken without the prior written consent of both shareholders. Clause 5.2 separately requires their consent for issuing securities to anyone other than the promoter or Resilient.
Through Agenda Item 18, Unity proposed to raise its authorised capital from ₹4,000 crore to ₹4,900 crore, to enable conversion of existing warrants into compulsorily convertible preference shares. Resilient moved the High Court under Section 9 of the Arbitration and Conciliation Act, 1996, and on July 24 a Single Judge restrained Unity from tabling or considering the proposal at its Board meeting of July 25.
“An argument of desperation”
The Bench held that Clause 8 of the agreement, which carries a non obstante clause, prevails, and that deleting Reserved Matters from the Articles did not wipe out Unity’s contractual obligations. On the bank’s attempt to disown its earlier requests for consent, it said:
“Unity is clearly aware of this position, which is why it seeks to wish away these communications by referring to them as having been issued in ‘inadvertent error’. That, quite clearly, is merely an argument of desperation, and nothing more.”
Rejecting the claim that the injunction breached RBI directives, the Court said the Single Judge “has not interdicted enforcement of the warrants, but has merely directed, effectively, that their enforcement had to be in terms of Clause 8 of the SHA.” It also found that Agenda Item 18, which opened shareholding to third parties, fell squarely within Clause 5.2.
“In, therefore, interdicting the tabling of Agenda Item 18, absent any written consent from Resilient therefor, the learned Single Judge has merely conformed to the rigour of Clause 8 of the SHA, which Unity, unsuccessfully, has tried to escape.”
Finding no cause to interfere with the Single Judge’s discretionary interim order, the Bench dismissed the appeal. The dispute between the shareholders remains to be decided in arbitration.
Why the judgment matters
The ruling confirms that consent rights negotiated in a shareholders’ agreement can be enforced through interim relief under Section 9 even after the company removes them from its Articles, and that regulatory compliance does not by itself release a company from its contractual promises to investors. It is a significant step in the long-running contest over control and capital of Unity Small Finance Bank, the lender built from the resolution of PMC Bank.
Case Title: Unity Small Finance Bank v. Resilient Innovations Pvt. Ltd. and Ors.
Case No.: FAO(OS) (COMM) 221/2026, CM APPL. 55533/2026 and CM APPL. 55534/2026
Bench: Justice C. Hari Shankar and Justice Vinod Kumar, High Court of Delhi
Date of Judgment: November 5, 2026
Appearances: Senior Advocate Mukul Rohatgi with Advocates Sanjay Gupta, Ateev Mathur and Jagriti Ahuja for Unity; Senior Advocates Gopal Subramanium and Amit Sibal with Advocate Mohit Goel and others for Resilient; Senior Advocate Sandeep Sethi with Advocates Ajay Monga and Amol Sharma for Centrum; Senior Advocate Raj Shekhar Rao with Advocates Ashish Agarwal and Nalin Dhingra for respondent 3