2019 (11) TMI 1473 - Tri - Companies Law

Applicability of time limitation - Oppression and Mismanagement - allegation that the petitioners (respondents in this IA) have not stated the date of occurrence of the cause of action fearing the eventual bar under the Limitation Act, 1963 - HELD THAT - When a question deciding limitation occurred, it cannot solely be decided as a question of 'fact alone. We have to look into the contents and circumstances of the main petition and decide whether this can be decided based on facts alone or there involved a question of fact and law . After going through the main Company Petition and the pleadings in the IA, we are convinced that the main company petition does have a mixed question of law and fact . Therefore, the plea of the applicant that the Company Petition is barred by limitation is to be viewed as a mixed question of facts and law for which it is necessary to peruse the relevant facts and the law. The available records and preliminary submissions of both parties reveal that involvement of mixed facts and law are inter-twined in this case. Therefore, the plea raised by the Applicant/Respondent No. 7 in the Interlocutory Application that the Company Petition is barred by limitation is required to be examined only after looking into the averments made in the Company Petition and any affidavit filed in reply to the Company Petition. Since limitation point is to be viewed from mixed question of law and fact, therefore at this preliminary stage it cannot be decided that the Company Petition is barred by limitation. However, this point of limitation can be examined at the time of final hearing.

Issues Involved:
1. Applicability of the Limitation Act, 1963 to the Company Petition.
2. Whether the Company Petition is barred by limitation.
3. Continuous acts of oppression and mismanagement.
4. Mixed question of law and fact in deciding limitation.

Detailed Analysis:

1. Applicability of the Limitation Act, 1963 to the Company Petition:
The applicant argued that under Section 433 of the Companies Act, 2013, the provisions of the Limitation Act, 1963 are applicable to proceedings before the Tribunal. The applicant cited the Supreme Court decision in B.K. Educational Services Pvt Ltd Vs. Parag Gupta and Associates, which affirmed the applicability of the Limitation Act to NCLT proceedings. The applicant also referenced judgments from NCLT and NCLAT, which reinforced that the Limitation Act applies to company matters under Section 433 of the Companies Act, 2013.

2. Whether the Company Petition is barred by limitation:
The applicant contended that the petitioners did not specify the date of occurrence of the cause of action to avoid the limitation bar. The earliest event complained of was in 2012, with no grievances raised until 2017. The applicant argued that allegations should be confined to three years prior to the petition date. The applicant cited multiple judgments to support the argument that stale claims should not be entertained.

3. Continuous acts of oppression and mismanagement:
The respondents argued that the acts of oppression and mismanagement are continuous, thus the Limitation Act does not strictly apply. They cited the Supreme Court judgment in Sangramsinh P. Gaekwad Vs. Shantadevi P. Gaekwad, which stated that oppressive conduct must be continuous at the date of the hearing. The respondents emphasized that the petition involves a continuing cause of action, not isolated incidents.

4. Mixed question of law and fact in deciding limitation:
The respondents argued that the question of limitation is a mixed question of fact and law, which cannot be decided at a preliminary stage. They cited the Supreme Court judgment in Ramesh B. Desai & others Vs. Bipin Vadilal Mehta & others, which held that a plea of limitation involves ascertaining the starting point of limitation, a question of fact. The Tribunal agreed, stating that the main petition involves mixed questions of law and fact, and the limitation issue can only be decided after examining the main petition and affidavits.

Conclusion:
The Tribunal concluded that the issue of limitation is a mixed question of law and fact and cannot be decided at this preliminary stage. The plea of the applicant that the Company Petition is barred by limitation will be examined at the final hearing. The Interlocutory Application raising the preliminary issue of limitation was rejected, and the applicant was directed to file a counter memo within one month. The order applies to connected cases CP/71/KOB/2019 and CP/72/KOB/2019, with the next hearing scheduled for January 10, 2020.

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