2017 (3) TMI 1826 - Tri - Companies Law

Maintainability of petition - time limitation - Section 433 in Companies Act 2013 - HELD THAT - The basic feature of the Petition under consideration is that the relief claimed are prima-facie perpetual in nature. Such as Prayer to appoint an appropriate person to manage the affairs of the Company is an issue of continuing in nature. Likewise a request is for appointment of a Chartered Accountant. Further seeking restraint order against the Respondent not to account false entries in the Account Books. All these instances referred from the Main Petition thus indicate that the issue raised is continuing in nature. A distinction is therefore visible that in a situation when no specific period for filing a Petition is prescribed in the Companies Act then the period of three years is unwarranted. The grievance being in the nature of continuing wrong hence the provisions of Limitation Act do not apply. The Petition under consideration cannot be thrown out of litigation at this preliminary stage. The Petitioners can also not be thrown at the very threshold. The objection of maintainability is rejected. Application dismissed without cost to be consigned on record.

Summary

Issues Involved:
1. Maintainability of the Main Petition.
2. Applicability of the Limitation Act, 1963.
3. Continuous nature of "Oppression and Mismanagement".
4. Amendment of pleadings.

Detailed Analysis:

1. Maintainability of the Main Petition:
The Respondents challenged the maintainability of the Main Petition (CP 86/2014) on the grounds of being "barred by limitation." They argued that the financial statements for the year 2005-06 were known to the Petitioner, and the grievance raised in 2014 was beyond the three-year limitation period prescribed by the Limitation Act, 1963. The Petitioner contended that Section 433 of the Companies Act, 2013, which incorporates the Limitation Act, does not apply uniformly to all cases. The Petitioner argued that "Oppression and Mismanagement" are of a continuing nature and thus not subject to the limitation period.

2. Applicability of the Limitation Act, 1963:
The Tribunal examined whether the Limitation Act, 1963, applies to the case at hand. Section 433 of the Companies Act, 2013, states that the provisions of the Limitation Act shall apply "as far as may be" to proceedings before the Tribunal. This phrase grants the Tribunal discretion in applying the Limitation Act. The Tribunal noted that the reliefs sought in the Petition, such as appointing a person to manage the company's affairs and restraining false accounting entries, are of a continuing nature. Therefore, the three-year limitation period is not strictly applicable.

3. Continuous Nature of "Oppression and Mismanagement":
The Tribunal emphasized that "Oppression and Mismanagement" are ongoing issues. The Petition sought remedies for continuous wrongs, making the limitation period irrelevant. The Tribunal cited previous judgments, including M/s. M.C. Davar Holding Private Limited v/s. M/s. Aurosagar Estates Private Limited & Ors., to support the view that continuous wrongs are not subject to the limitation period. The Tribunal also referenced the Madras High Court decision in A Brahmaraj vs. Sivakumar Spinning Mills Pvt. Ltd., which held that continuous oppression or mismanagement up to the date of filing the petition negates the question of limitation.

4. Amendment of Pleadings:
The Tribunal considered the Respondents' objection to the Petitioner's request for amendment. The Tribunal noted that the right to amend is distinct from the right to sue and that amendments should not introduce new causes of action. The Tribunal referred to Order VI Rule 17 of the Code of Civil Procedure, 1908, which allows amendments to determine real questions in controversy. The Tribunal concluded that a liberal approach should be adopted to facilitate speedy disposal of disputes and avoid technicalities that hamper justice.

Conclusion:
The Tribunal rejected the Respondents' objection regarding the maintainability of the Main Petition, holding that the continuous nature of "Oppression and Mismanagement" exempts the Petition from the limitation period. The Tribunal allowed the amendment of pleadings and directed the Petitioners to serve the Amended Petition within 15 days. The Main Petition was listed for hearing on 24th March, 2017, with interim reliefs to continue until then. The Application challenging the maintainability was dismissed without cost.