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2022 (4) TMI 81 - AT - Companies LawRefusal to pay the lease rentals to the legal heir - affected person - Fraudulent and Unlawful Activities committed by the 1st Respondent/Company - seeking to order an investigation as per Section 213 of the Companies Act, 2013 - Conveyance to and in favor of DLF - Income Tax dues and the GST dues - cause of action arose before the year 1996 - time limitation - HELD THAT - The Appellant/Applicant is not a shareholder or a Creditor or a person related in any manner to the 1st Respondent/Club. As regards, the Title, in respect of the lands measuring 12.53 Acres is concerned, the same is a subject matter of litigation with numerous legal proceedings before the City Civil Court, Chennai. Conveyance to and in favor of DLF - HELD THAT - The same, according to the 1st Respondent/Club is a private transaction between the Club and another entity. As far as Madras School of Equitation is concerned, it is the stand of the 1st Respondent/Club that it is a part and parcel of the 1st Respondent/Club and the issue of Sub-Lease may not arise. Income Tax dues and the GST dues - HELD THAT - The Appellant/Petitioner being an alien under stranger to the 1st Respondent/Club has no Locus Standi to question the same. And in this regard, the Income Tax and GST Authorities are to take such action as they deem fit and proper, in the considered opinion of this Tribunal. By no stretch of imagination, these dues cannot be prudently considered as a basis praying for an Investigation, as per the ingredients of Section 213 of the Companies Act, 2013. A cursory perusal of the relevant Provisions of the Companies Act, 2013 point out that there are prescribed procedures to deal with a contingency like Mismanagement of a Affairs of Company - there is no two opinion of a premodial fact that a person whose name is not on the Register of Members is not entitled to prefer a Petition before a Tribunal. It is for the concerned person to establish that he is a Member of a Company on the date of filing of a Petition/Application under the Companies Act, 2013. When a person is not a Member of the Company, he cannot even come out with an allegation of Oppression to invoke the ingredients of relevant Provisions of the Companies Act, 2013, as the case may be. Time Limitation - HELD THAT - If a Petition filed by a Petitioner/Applicant under the Companies Act, 2013 seeking certain reliefs, suffers from Delay and Latches, the same is not maintainable in Law. Although a plea of Limitation is not to be raised before a Tribunal because of the exercise of Equitable Jurisdiction in a proceeding initiated by an Applicant/Petitioner, the plea of Delay and Latches will squarely apply in a given case and the delay/latches will of course, begin undoubtedly, from the Date of Knowledge, in the considered opinion of this Tribunal. In the Instant Case, the Appellant/Petitioner, has not made out an Ex-Facie case to avail the remedy under Section 213(b) of the Companies Act. The Power of a Tribunal/Appellate Tribunal is not to be exercised in an Arbitrary or capricious manner. Per contra, the power of the Tribunal is to be exercised with utmost care, caution and circumspection, based on its sound Application of Judicial mind and Discretion. A Tribunal cannot exercise its power under the Companies Act just for the asking of an Alien/Stranger, simply on the basis of allegations made by a Non-shareholder. Also, in the present case, no endeavor was made by the Appellant/Petitioner to avail/exhaust the remedies available, if any, under the Companies Act, 2013 as per procedure prescribed. When the cause of action (Bundle of Facts) purportedly arose before the year 1996, in the present case, then the Company Petition filed by the Appellant/Petitioner before the National Company Law Tribunal, Chennai suffers from the Plea of Delay and Latches, as held by this Tribunal. Looking at from any angle, the main Company Petition CP/46/CHE/2021 filed before the National Company Law, Tribunal, Chennai is not maintainable either in Law or on facts. Viewed in that perspective, the Company Appeal sans merits. Appeal dismissed.
Issues Involved:
1. Legal standing of the appellant to file the petition. 2. Allegations of fraud, mismanagement, and non-payment of lease rentals by the respondent. 3. Applicability of Section 213 of the Companies Act, 2013. 4. Delay and latches in filing the petition. Issue-wise Detailed Analysis: 1. Legal Standing of the Appellant: The appellant claimed to be the legal heir and grandson of the owner of 12.53 acres of land leased to the respondent. The respondent disputed this, arguing that the appellant had not produced any documentary evidence to establish ownership or interest in the company. The tribunal noted that under Section 213 of the Companies Act, 2013, a person must have a legitimate interest in the company, such as being a shareholder or creditor, to file a petition. The appellant, not being a member or creditor, had no locus standi to file the petition. 2. Allegations of Fraud, Mismanagement, and Non-payment of Lease Rentals: The appellant alleged that the respondent had not paid lease rentals for the land and was involved in fraudulent activities, including alienating land without proper documentation and evading taxes. The tribunal found that the appellant's allegations were not supported by sufficient documentary evidence. The documents submitted by the appellant did not corroborate the claims of fraud and mismanagement. The tribunal emphasized that mere allegations without substantial proof could not justify ordering an investigation under Section 213(b) of the Companies Act, 2013. 3. Applicability of Section 213 of the Companies Act, 2013: Section 213(b) allows the tribunal to order an investigation if there are circumstances suggesting fraudulent or unlawful conduct of the company's business. The tribunal noted that the appellant failed to provide prima facie evidence to suggest that the respondent's business was conducted fraudulently or unlawfully. The tribunal highlighted that the power to order an investigation under this section must be exercised with caution and based on substantial evidence, not mere suspicions or assumptions. 4. Delay and Latches in Filing the Petition: The tribunal observed that the appellant's cause of action arose before 1996, but the petition was filed in 2021, indicating a significant delay. The tribunal emphasized that the law does not assist those who sleep on their rights. The appellant failed to explain the delay satisfactorily, and the tribunal applied the doctrine of latches, which bars claims brought after an unreasonable delay. The tribunal concluded that the petition was not maintainable due to the delay and latches. Conclusion: The tribunal dismissed the petition, noting that the appellant lacked the legal standing to file it, failed to provide sufficient evidence of fraud or mismanagement, and did not justify the delay in filing the petition. The tribunal emphasized the importance of substantial evidence and timely action in seeking legal remedies under Section 213 of the Companies Act, 2013. The appeal was dismissed without costs, and the connected application was closed.
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