NCLT pauses Mensa attempt to buy out MyFitness founders amid fund diversion claims

The National Company Law Tribunal (NCLT), Chandigarh Bench has temporarily restrained Mensa Brand Technologies from proceeding with steps to buy out the remaining shareholding of the founders of MyFitness. [Mohammad Patel v. Tanvi Fitness]

A coram of Judicial Member K Biswal and Technical Member KK Singh passed the order in a petition alleging oppression and mismanagement under Sections 241–242 of the Companies Act, 2013.

Mohammad Patel and Rahil Virani, founders and promoters of the company behind the MyFitness peanut butter brand, have approached the NCLT alleging “rampant corporate misgovernance and siphoning of funds” by majority investor Mensa Brand Technologies Pte Ltd, which has since merged with its Indian subsidiary.

Mensa, founded by Ananth Narayanan, acquired a controlling stake in the business in 2022. The founders claim that since the takeover, the investor orchestrated a “systematic scheme” to siphon off ₹40–50 crore to related parties and group entities through non-arm’s-length transactions.

According to the petition, these transactions include exorbitant warehousing charges and unjustified shared services payments made to Mensa group companies. The founders say that the transactions were far above industry standards and pushed the company from profits into losses despite continued revenue growth.

They also alleged the diversion of funds was ongoing even as the petition was filed.

The founders further alleged serious governance lapses, including fabrication and forgery of board minutes, meeting notices and shareholder consents to approve disputed transactions. They claimed that they were excluded from governance through inquorate meetings and denied access to statutory records.

The Tribunal was told that Mensa issued an event of default notice late at night on February 23, 2026, shortly before the hearing, in a move aimed at triggering the buyout of their remaining shares.

Mensa strongly denied the allegations, describing the petition as a counterblast to contractual proceedings already initiated by it.

It was stated that the founders themselves had committed multiple defaults under the acquisition agreement. These included allegedly setting up parallel and competing businesses after the investment, concealing ownership interests in related entities and breaching warranties given at the time of the transaction.

Mensa argued that the founders had also resigned as employees in 2023 despite contractual commitments to continue working with the company post-investment to help scale the business.

On the financial allegations, Mensa contended that the transactions in question were commercially justified and part of a broader brand-building and scaling strategy.

Mensa also informed the Tribunal that arbitration proceedings had already been initiated under the acquisition agreement, and that a Section 9 petition had been filed before the Karnataka High Court, where an order dated February 19, 2026 was passed recording undertakings regarding shareholding.

The investor defended its move to buy out the founders’ shares as a contractual right triggered upon the alleged defaults.

After hearing both sides, the NCLT directed that the process to acquire the founders’ remaining shares should not proceed until the next hearing, observing that detailed replies were necessary before deciding interim reliefs.

The matter will now be heard on March 19, 2026.

The founders were represented by Senior Advocate Atul Sood with a team from Sim and San comprising Advocates Mohit Goel, Sidhant Goel, Aditya Maheshwari, Aishna Jain, Ishaan Pratap Singh, Shashwat Mukherjee and Raghav Kakkar.

Mensa was represented by Senior Advocates Manisha Gandhi and Anand Chibber, along with Alok Jagga and a team from Touchstone Partners comprising Sandeep Das and Harshil Mehta.