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2017 (12) TMI 831 - Tri - Companies LawOppression and mismanagement - Illegal transfer of shares - forged of signature on the transfer deed as alleged by petitioner - maintainability of petition - Held that - Petitioner in this case is questioning the increase in the authorised share capital of the first respondent company and allotment of 9000 shares to respondent No. 6. Therefore, shareholding pattern as on 15.03.2013 has to be taken into consideration while considering whether the petitioner is entitled to file this composite petition. As on 15.03.2013 authorised share capital of the first respondent company was ₹ 1.00 lac divided into 1000 shares of ₹ 100/- each. Out of 1000 equity shares shareholding of the petitioner is 20%. Even according to respondents, shares of the petitioner were transferred to Respondent No. 3 on 15.03.2013. Therefore, prior to the transfer of her shares, petitioner was holding more than 10% shareholding in the equity share capital of the first respondent company. Therefore, this composite petition filed by the petitioner is maintainable. Period of limitation - Held that - In view of the finding that ROC is not a court , time spent by the petitioner before ROC cannot be excluded for computing the period of limitation. No document is filed to show that letter dated 19.07.2016 addressed to ROC, MP was received by ROC, MP and reply was filed by ROC. Therefore, letter dated 19.07.2016 cannot be taken into consideration. Even assuming that time taken by ROC can be excluded for petitioner made a specific reference for rectification of Register of Members in the letter dated 10.10.2016 which was replied by ROC on 27.10.2016 and, therefore, the time consumed by ROC is only 17 days. Even that 17 days is excluded, still this petition is not within limitation. Delay of 31 days condoned for filing the composite petition- Held that - In the case on hand, after the shares of the petitioner were transferred, there was a decision to increase the authorised capital and there was a decision of the company to allot 9000 shares to respondent No. 6. In case if the delay is condoned and if name of the petitioner is rectified in the register of members, then there is a cause for the petitioner to say that increase in the share capital and allotment of 9000 shares to Respondent No. 6 is illegal and if such course is adopted it would be detrimental to the interest of Respondent No. 6 and to the company also. Therefore, it is not a case where delay caused by the petitioner would not affect rights of the other parties also in case if the delay is condoned. Keeping the above said facts in mind, this Tribunal is of the considered view that there are no reasons to condone the delay. Moreover, the petitioner is not entitled for any relief on the ground of delay and latches. Tribunal jurisdiction to entertain the plea of forgery of transfer deeds - Held that - In the case on hand, allegation of forgery of transfer deed is made by the petitioner. The transfer deed as such is not available before this Tribunal even to compare the signature of petitioner. Plea of forgery has been raised by the petitioner nearly after fifteen years. Therefore, it is a complicated question of law and it cannot be solved in a summary manner by exercising jurisdiction of Section 59 of the Companies Act. It is a matter which has to be resolved only after taking evidence of both the parties. Therefore, in the given facts and circumstances of the case, this Tribunal cannot exercise its jurisdiction to order rectification in the Register of Members in view of the plea of the petitioner that her signature has been forged on transfer deeds. As already said, this petition is not within time and petitioner is not entitled for any relief of rectification of Register of Members on the grounds of delay and latches. When the relief of rectification of Register of Members is barred by limitation and hit by delay and latches, there is no question of examining whether the transfer of shares took place according to the provisions of the Companies Act and Articles of Association of the Company. Further, when the relief for rectification of Register of Members is barred by limitation, petitioner is not entitled to seek reliefs for oppression and mismanagement.
Issues Involved:
1. Maintainability of the composite application for rectification and reliefs under Section 241 and 242. 2. Applicability of limitation period for claiming relief under Section 59 of the Companies Act. 3. Condonation of delay in filing the petition. 4. Jurisdiction of the Tribunal to grant relief under Section 59 in view of the plea of forgery. 5. Validity of the transfer of 200 shares to the 3rd respondent. 6. Validity of the increase in authorized capital from ?1.00 lac to ?10.00 lacs. 7. Validity of the allotment of 9000 shares to respondent No. 6. 8. Allegations of siphoning of funds and sale of assets by the respondents. Detailed Analysis: Point No. 1: Maintainability of Composite Application The Tribunal examined whether a composite petition for rectification of the register of members and reliefs under Sections 241 and 242 is maintainable. The petitioner cited several precedents, including Charanjit Khanna v. Khanna Paper Mills Ltd. and C. Vasudevamurthy v. Associated Oxides (P.) Ltd., to argue that such petitions are permissible when issues of oppression and mismanagement are intertwined with the rectification of the register of members. The Tribunal concluded that the composite petition is maintainable because the petitioner held more than 10% shareholding before the alleged transfer of shares, making her eligible to file the petition. Point No. 2: Limitation Period for Claiming Relief under Section 59 The Tribunal discussed the applicability of the Limitation Act, 1963 to the proceedings. It determined that the limitation period for filing a petition under Section 59 is three years, starting from when the right to apply accrues. The petitioner claimed she had no knowledge of the transfer until 10.02.2016. However, the Tribunal noted that the annual return filed on 22.10.2013 provided deemed knowledge of the transfer, making the petition filed on 24.11.2016 delayed by 31 days. Point No. 3: Condonation of Delay The Tribunal considered whether the 31-day delay in filing the petition could be condoned. It noted that the petitioner did not file a formal application for condonation of delay. The Tribunal found that the petitioner had abandoned her rights by not raising any issue regarding her shareholding for nearly 15 years. The Tribunal concluded that there were no sufficient reasons to condone the delay, emphasizing that the delay affected the rights of other parties and the company's actions taken during that period. Point No. 4: Jurisdiction of the Tribunal in View of Forgery Allegation The Tribunal addressed whether it had jurisdiction to entertain the plea of forgery of transfer deeds. Referring to the Ammonia Supplies Corpn. (P.) Ltd. v. Modern Plastic Containers (P.) Ltd. case, the Tribunal held that it could not exercise jurisdiction under Section 59 due to the complicated nature of the forgery allegation, which required detailed evidence and could not be resolved summarily. Point No. 5: Validity of Transfer of 200 Shares Given the Tribunal's finding on the limitation and delay, it did not examine the validity of the share transfer under the Companies Act and the Articles of Association. Point No. 6: Validity of Increase in Authorized Capital The Tribunal did not address this issue separately as it was contingent on the petitioner's standing as a shareholder, which was dismissed due to the limitation and delay. Point No. 7: Validity of Allotment of 9000 Shares Similarly, the Tribunal did not examine the validity of the allotment of 9000 shares to respondent No. 6, as the petitioner's claims were barred by limitation. Point No. 8: Allegations of Siphoning of Funds and Sale of Assets The Tribunal did not delve into the allegations of siphoning funds and asset sales due to the dismissal of the petition on the grounds of limitation and delay. Conclusion: The petition was dismissed due to the delay in filing and the Tribunal's lack of jurisdiction to address the forgery allegations. The Tribunal emphasized the importance of timely action and the impact of delay on the rights of other parties and the company's operations.
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