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2019 (12) TMI 1357 - Tri - Insolvency and BankruptcyCondonation of delay in filing petition - Registration of transfer of shares - making entries in the Register of members and register of share transferred and thereafter return the share certificates to the Petitioners - HELD THAT - Reliance placed in the case of AKAL SPRING LIMITED ORS. VERSUS AMREX MARKETING PRIVATE LIMITED 2019 (11) TMI 1131 - NATIONAL COMPANY LAW where it was held that It cannot be gain said that Right to refuse registration of transfer of shares, Sufficient Cause is question of law and the cause shown for refusal is sufficient or otherwise in a given case, can also be a mixed question of law and fact. Besides this, a refusal may be on the basis of Breach of Law or any other Sufficient Cause . The application for condonation of delay permitting the parties to argue their respective versions on merits. Let the matter be listed for hearing on the main petition C.P. No. 295/KB/2017 on 23.01.2020.
Issues Involved:
1. Condonation of delay in filing the company petition. 2. Registration of transfer of shares. 3. Applicability of the Limitation Act to the proceedings under the Companies Act. Issue-wise Detailed Analysis: 1. Condonation of Delay in Filing the Company Petition: The petitioners filed an Interim Application (I.A. No. 1009/KB/2019) along with C.P. No. 295/KB/2017, seeking condonation of any delay in filing the company petition. The petitioners argued that the delay, if any, should be condoned under Rule 32 of the National Company Law Tribunal Rules, 2016, read with Section 5 of the Limitation Act, 1963. The petitioners emphasized that the company petition was filed within 30 days of the order passed by the Hon'ble NCLAT on 19th April 2017, and that the delay was not due to any fault on their part. The respondents opposed the application, arguing that Section 58 of the Companies Act contains an inbuilt time limit and does not permit condonation of delay. They contended that the petitioners failed to provide a satisfactory explanation for the delay between various stages of the proceedings, including the period between the dismissal of the earlier company petition (C.P. No. 61 of 2015) and the filing of the appeal, as well as the period between the dismissal of the appeal and the filing of I.A. No. 1009/KB/2019. The Tribunal considered various judgments, including those from the Hon'ble NCLAT and the Hon'ble Supreme Court, and concluded that the petitioners had shown sufficient cause for the delay. The Tribunal emphasized that "One cannot brush aside a vital fact that in Law, a Lis' is to be decided on merits and no party should be non-suited harping on technicalities and also by adopting a pedantic approach." Consequently, the application for condonation of delay was allowed. 2. Registration of Transfer of Shares: The petitioners sought directions for the respondent company to register the transfer of their shares and make entries in the register of members and the register of share transfers. They argued that the respondent company had refused to transfer the shares based on a pre-existing contract or arrangement among the members of the Goenka Family, which required shares to be offered first to other family members. The petitioners contended that the refusal was unjustified and that the shares should be registered in their names as per the law. They highlighted that the refusal to transfer the shares was communicated on 11th February 2015, and the subsequent joint petition (C.P. No. 61 of 2015) was dismissed on the ground of maintainability. The petitioners then filed an appeal, which was dismissed as withdrawn with liberty to file an appropriate application before the appropriate forum. 3. Applicability of the Limitation Act to the Proceedings under the Companies Act: The petitioners argued that no specific period of limitation is prescribed under Sections 58 and 59 of the Companies Act, 2013. They relied on Section 433 of the Companies Act, which makes the provisions of the Limitation Act applicable to proceedings before the Tribunal. They also cited various judgments to support their argument that the delay should be condoned in the interest of justice. The respondents, however, contended that Section 58 of the Companies Act mentions a special period of limitation and does not permit condonation of delay. They argued that Section 5 of the Limitation Act does not apply to such proceedings, and that the petitioners had not provided a satisfactory explanation for the delay. The Tribunal, after considering the arguments and relevant judgments, concluded that the delay should be condoned. The Tribunal emphasized that "the length and breadth of the delay is an irrelevant one" and that the acceptance of the explanation offered by the litigant is the material factor. The Tribunal allowed the application for condonation of delay and directed the parties to argue their respective versions on merits. Conclusion: The Tribunal allowed the application for condonation of delay, permitting the parties to argue the main petition (C.P. No. 295/KB/2017) on merits. The matter was listed for hearing on 23rd January 2020. The Tribunal emphasized the importance of deciding the case on merits rather than on technicalities, and provided a comprehensive analysis of the legal principles involved in condonation of delay and the registration of transfer of shares.
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