2020 (10) TMI 19 - Tri - Companies Law

Condonation of delay of 4 years in filing the present company petition - Section 59 of the Companies Act, 2013 - HELD THAT - While considering the application for condonation of delay no straight jacket formula is prescribed to come to the conclusion if sufficient and good grounds have been made out or not. Each case has to be weighed from its facts and the circumstances in which the party acts and behaves - After all, justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it of on such technicalities and that too at the threshold. It is pertinent to point out that unless mala fides are writ large on the conduct of the party, generally as a normal 1 rule, delay should be condoned. In the legal arena, an attempt should always be made to allow the matter to be contested on merits rather than to throw it on such technicalities. While dealing with an 'Application for condonation of Delay', the concerned Tribunal/Appropriate Authority is only required to consider whether the 'Plea of Sufficiency of Cause' is a reasonable one or otherwise, of course after taking into consideration of the facts and circumstances of a given case. Undoubtedly, consideration of an existence of a 'Sufficient Cause' is within the ambit of the concerned Authority, which has to be exercised based on sound judicial principles - 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'. In the present case, it has become necessary to adjudicate the issue of whether the Company Petition as filed by the Petitioner is barred by limitation and whether the delay can be condoned. However, before venturing into the issue of whether the delay has to be condoned or not, from the facts narrated above, this Tribunal is of the considered view that issue of limitation in the present case, is a mixed question of fact and law. This Tribunal is of the view that this Application filed by the Petitioner to condone the delay of 4 years in filing the main Company Petition, should not be taken up as a preliminary issue and to be decided, without traversing into the merits of the case - this Tribunal deems fit that this Application should be taken up along with the main Company Petition for effective adjudication of this issue both on law and on facts - application disposed off.

Summary

Issues involved:
1. Delay in filing the company petition under Section 59 of the Companies Act, 2013.
2. Adjudication of whether the company petition is barred by limitation and if the delay can be condoned.

Detailed Analysis:

Issue 1: Delay in filing the company petition under Section 59 of the Companies Act, 2013.
The Applicant filed an Application seeking relief under Section 59 of the Companies Act, 2013, requesting the Tribunal to condone the delay of 4 years in filing the company petition. The Applicant cited medical reasons, specifically the diagnosis of cancer of the Director and Principal Officer during the period from 2014 to 2017, as the cause for the delay. The Applicant submitted medical reports to substantiate the claim of ill health affecting the ability to follow up on the matter of share registration during that period.

Furthermore, the Applicant contended that Section 59(1) of the Companies Act, 2013 does not specify a period of limitation in case of disputes in share transfer registration. The Applicant relied on judicial precedents, including a Supreme Court judgment, to argue that delay should be condoned unless mala fides are evident, emphasizing that justice should prevail over technicalities.

Issue 2: Adjudication of whether the company petition is barred by limitation and if the delay can be condoned.
The Respondent argued that the company petition was barred by limitation as the alleged share transfer occurred on 29.01.2010, invoking Section 433 of the Companies Act, 2013, which applies the provisions of the Limitation Act. The Respondent opposed the delay condonation, highlighting the lapse of over 4 years in approaching the Tribunal and claiming the cited judgments were irrelevant to the case.

The Tribunal examined the issue of limitation as a mixed question of fact and law, citing judicial precedents that preclude deciding limitation as a preliminary issue when facts are disputed. Referring to Supreme Court judgments, the Tribunal emphasized that when facts are in dispute, the question of limitation cannot be decided as a preliminary issue and should be considered along with the main petition for a comprehensive adjudication.

In conclusion, the Tribunal directed the consolidation of the Application seeking delay condonation and the main company petition for a joint hearing to effectively address the issue of limitation both on legal grounds and factual merits, setting a date for final enquiry.