2017 (3) TMI 1561 - Tri - Companies Law

Application seeking permission to carry out the amendment (MA 90/2016) - Prevention of Oppression and Mismanagement- Held that - To resolve this controversy, perused Order VI Rule 17 of the Code of Civil Procedure, 1908, wherein Amendment of pleadings are prescribed, which says that Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner as may be jest and necessary for the purpose of determining the real questions in controversy between the parties. It is a trite law that this exception is prescribed to facilitate the proceedings, if found necessary and helpful in determining the question in controversy. The amendment must not be allowed if it would result in introducing a new case or a fresh cause of action. It can also not be allowed if it would allegedly change the very nature of the Suit. Keeping brevity in mind, to sum up the controversy, it can be safely adjudged that while deciding such type of prayers a Tribunal can avoid to adopt a hyper-technical approach. Instead, a liberal approach can facilitate the speedy disposal of pending disputes. Sometimes, technicalities hamper the Courts in the administration of justice. For that very purpose, to avoid the technical or lengthy procedure the Tribunals have been constituted. Humbly, it is further to be added that while disposing of the pending litigation the Tribunal is not bound by the lengthy procedure, either laid down in CPC or other Act, but at best be guided by the principles of natural justice. As far as this case is concerned, the Petitioner was not sleeping over its rights. That the effect of acknowledgement or the knowledge of the event as prescribed u/s. 18 of the Limitation Act, 1963 is also prima facie missing in this case because the knowledge of the said event is the bone of contention in this litigation. Undisputedly, the Main Petition under consideration has been filed u/s. 241 of the Companies Act, 2013 i.e. under the Chapter Prevention of Oppression and Mismanagement , which has not concluded or stopped or exhausted in this case in a particular year, rather in continuance; hence out of question of period of limitation. Be that as it is, the issue of applicability of Limitation Act is open as far as the maintainability of the main Petition is concerned. As a result, the Application seeking permission to carry out the amendment (MA 90/2016) is hereby allowed with a direction to serve the Amended Petition to the other side within 15 days on receipt of this Order. Thereafter, the litigants are directed to complete the pleadings earliest possible. The Petition is now listed for hearing on 10th April, 2017.

Summary

Issues Involved:
1. Legality of the amendment to the Articles of Association (AoA).
2. Barred by limitation for seeking amendment.

Detailed Analysis:

1. Legality of the Amendment to the Articles of Association (AoA):

The Petitioner contended that the amendments to the AoA, which were made via resolutions dated 30th March 2008 and 15th December 2012, were carried out in the absence of Mr. Ashik M. Patel and Mrs. Meena Ashik Patel. The condition for such amendments was prescribed in Article 9 of the unamended AoA of Respondent No. 1 Company. The Petitioner argued that they were unaware of these amendments until they were communicated via the Respondent's reply. The Petitioner sought permission to amend the Main Petition to address these amendments, arguing that these were crucial for a fair decision on the merits of the case. The Petitioner cited case laws to support the necessity and importance of the amendment, emphasizing that it would have a direct factual and legal bearing on the Main Petition.

2. Barred by Limitation for Seeking Amendment:

The Respondents opposed the amendment on the grounds of maintainability and limitation. They argued that the Petitioner was aware of the amendments as notices for the EOGMs held on 30th March 2008 and 15th December 2012 were duly given. They claimed that the Petitioner’s representative, Mr. Shailesh Patel, was present at the EOGM held on 30th March 2008, where the amendments were passed. The Respondents asserted that the amendment application filed in 2016 was barred by the Law of Limitation, arguing that no sufficient cause was demonstrated for the delay. They cited several case laws to support their contention that such interim applications are often filed frivolously to delay proceedings.

Tribunal’s Observations and Judgment:

Limitation Issue:

The Tribunal first addressed the issue of limitation. It noted that Section 433 of the Companies Act, 2013, prescribes the application of the Limitation Act, 1963, to proceedings before the Tribunal. The Tribunal highlighted the phrase "as far as may be" from Section 433, emphasizing its broad effect, which grants the Tribunal discretion in applying the Limitation Act. The Tribunal observed that the Limitation Act does not specify a time period for amendments, thus allowing for a more liberal approach. The Tribunal concluded that the general principles of the Limitation Act need not be strictly applied in the absence of a specific time limit in the statute. The Tribunal emphasized that if an amendment serves the ultimate cause of justice and avoids further litigation, it should be allowed.

Knowledge and Right to Amend:

The Tribunal discussed the distinction between the right to "sue" and the right to "amend," noting that the right to amend arises from facts brought to the Petitioner’s knowledge upon the Respondent’s reply. The Tribunal referred to Order VI Rule 17 of the Code of Civil Procedure, 1908, which allows amendments necessary for determining the real questions in controversy. The Tribunal stated that amendments should not introduce a new case or fresh cause of action but should facilitate the proceedings.

Conclusion:

The Tribunal concluded that a liberal approach should be adopted to facilitate the speedy disposal of disputes. Technicalities should not hamper the administration of justice. The Tribunal distinguished the cited cases on the grounds that the Respondents were not challenging the main Petition’s maintainability but only the amendment. The Tribunal noted that the cause of action in the cited cases was not in continuance, unlike in the present case. The Tribunal found that the Petitioner was not sleeping over its rights and that the issue of limitation is open concerning the main Petition’s maintainability.

Order:

The Tribunal allowed the application for amendment (MA 90/2016) and directed the Petitioner to serve the Amended Petition to the Respondents within 15 days. The Tribunal scheduled the next hearing for 10th April 2017 and continued the stay or any Interim Relief until then.