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TMI Blog2015 (9) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... h is identical in all the cases. I, therefore, for the sake of convenience clubbed all the cases for the purpose of hearing and decision. However, I would like to reiterate that save and except the variance in the number of shares and company's name, the facts and point in law being one and the same, it would be sufficient to confine the consideration only to the pleadings in C.P. No. 19 of 2011. 3. It is pertinent to mention here that in the course of trial the Original Respondent Nos. 3 to 5/Applicants therein fited Company Applications being CA Nos. 154 to 161 of 2014, seeking cross examination of the Petitioner. These applications have also been clubbed and are being decided alongwith the Company Petitions. 4. The short facts of the case are as follows:- 4.1 The Petitioner is one of the Trustees of a private family trust, namely, N.S. Trust, which has been settled under an Indenture of Trust dated 10/4/1999 (hereinafter referred to as "the Indenture" in short). The Respondent No. 1 is a private limited company incorporated for the purposes of holding and/or facilitating investments of the Late Dr. Neelkanth Kalyani and Mrs. Sulochana Kalyani, the Respondent No. 2 (since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No. 2 (since deceased) herein. However, with a view to maintain cordial family relations and for other diverse reasons, including deteriorating health of the Respondent No. 2, the Petitioner and the Respondent No. 2 did not take any legal action in the matter. 4.7 It is stated that, in January, 2010, the Petitioner and the Respondent No. 2 revoked the two Powers of Attorney, which the Respondent Nos. 3 and 4 had managed to obtain from them in the year 2008. It is alleged that as a result thereof, the Respondent No.4 started harassing the Petitioner and the Respondent No. 2 in various ways, which led to a complete family unrest. Ultimately, as a result of disputes in the family, the Petitioner took search of records of various statutory authorities, whereupon, inter alia, it was discovered that the impugned shares of the Company held by the Trust were purportedly first transferred in favour of the Respondent No. 2 and then further transferred in favour of the Respondent No. 3. It is submitted that the purported transfer of the impugned shares is not valid and as such the illegal changes in the relevant documents need to be rectified for the reason stated hereinafter. a. Bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.1 In reply filed on behalf of the Company, It is stated that the Company has acted in accordance with law pursuant to the documents executed by the Petitioner in relation to the transfer of impugned shares and hence the Petition deserves to be dismissed. 5.2 In the reply filed by the Contesting Respondents, they have stated that the Petitioner is no longer a trustee or a beneficiary of the N. S. Trust ('the said trust'). It is stated that by a letter dated 6/7/2007, addressed to the Board of Trustees of the N.S. Trust, the Petitioner had tendered her resignation as a trustee from the said date and requested the Board of Trustees to accept her resignation and relieve her of her duties as trustee. 5.3 It has been further stated that by a Declaration of Relinquishment executed on 7/7/2007, the Petitioner had stated that she has sufficient income of her own; she is of an advanced age and after discussions and deliberations with her husband i.e. Respondent No. 2 (since deceased) herein had decided to relinquish all benefits in the income and corpus of the said N.S. Trust. By the said Deed of Relinquishment, the Petitioner relinquished all her Rights as a beneficiary under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income/corpus of the Trust. The proceedings of the said meeting was recorded in the Minutes of meeting dated 12/7/2007. 5.7 It is further stated that by a letter dated 20/7/2007, addressed by Mr. S. N. Inamadar, a Trustee of the said Trust, to the Board of Trustee, the said Mr. Inamdar referred to the minutes of the meeting dated 12/7/2007 and stated that after perusing the contents of the said minutes, the other Trustees had his consent to distribute/transfer the income/corpus to the sole beneficiary of the Trust viz. Dr. Kalyani (Respondent No. 2 herein). 5.8 It is further stated that the shares of the Respondent No. 1 Company were transferred to Respondent No. 2 (since deceased) on 17/9/2007. This fact was also known to the Petitioner as far back as on 17/9/2007, which is evident from a perusal of the share certificate, which bears the signature of the Petitioner as a Director of the Respondent No. 1 Company. Similarly, on 22/11/2007, the Respondent No. 2 transferred his shares in the Respondent No. 1 Company to the Respondent No. 3 by a registered gift deed, which fact was also to the knowledge of the Petitioner, as the share certificate also bears the signature of the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected against a common order and judgment dated 4th September, 2014 in various company applications filed by the appellants in the 1st respondent's company petition. 2. I have heard Mr. Mookherjee, Mr. Bhatt and Mr. Kamdar, learned senior advocates for the contesting parties at some length. In my view, it is not necessary to decide these appeals on merits. The order under appeal disposed of applications filed by the present appellants challenging the maintainability of the original petition. It would in my view, serve the purposes of justice, if the following order is passed. (a) The impugned order is quashed and set aside. However, it is clarified that this is without any examination at all of the correctness of otherwise of the order on merits but only in order to facilitate the other directions that follows. (b) The Company Law Board shall decide the Company Petition on merits. While doing so, it shall also consider and decide all questions as to the maintainability of the Company Petition without any way being influenced or bound by the order under appeal. (c) Parties are at liberty to file further affidavits in reply on or before 24th March 2014. Rejoinder/s, if any, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... knowledge of having signed these documents. According to him, the Petitioner might have signed these documents inadvertently in routine course and/or her signatures might have been obtained by mis-representation of without knowing the real nature of the transactions under challenge in this petition, and therefore, these documents are not binding on her. 11. In my view, the main thrust of the Respondents' counsel to cross- examine the Petitioner was revolving with respect to her signature on the documents-in-question. In the facts and circumstances narrated above, in my opinion, there is no sufficient reason or cause for calling the Petitioner or any other person as a witness for cross-examination. The Applications are, therefore, hereby rejected, being misconceived and unwarranted, having regard to the stand of the Petitioner taken in the course of arguments of her counsel. 12. The first preliminary objection raised on behalf of the Contesting Respondents is that, according to the own case of the Petitioner, the subject shares belonged to "N.S Trust" and hence, the Petitioner has no locus standi to file the instant petition. Connected with this issue, the second preliminary o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner has signed on the reverse of the shares certificate in question, as a Director of the Company. According to him, such signatures have been subscribed on the dates of registration of such transfers i.e. 17/9/2007, when the subject shares were transferred in favour of the Respondent No. 2, Dr. Nilkant A. Kalyani, and also on the dates of subsequent registration of transfer of the said shares from the Respondent No. 2 to the Respondent No. 3. He then pointed out that the Petitioner being director of the company and its authorized signatory at the relevant time, by subscribing her signatures to the endorsements recording such transfers has been duly confirmed and acknowledged such transfers and as such the Petitioner is now estopped from challenging the same. The Respondents' Counsel, therefore, contended that the Petitioner has no locus to file the instant petition and the same deserves to be dismissed on this ground alone. 16. As regards application of doctrine of "estoppel" and "waiver", the Ld. Sr. Counsel for the Respondents further submitted that as indicated hereinabove, the Petitioner herself has executed the documents i.e. letter of resignation dated 6/7/2007, Decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 108. According to Mr. Bhatt, the admitted fact that this was not done makes it clear that the Petitioner was never a consenting party to the impugned transfer of shares. 18. Mr. Bhatt further contended that it has been the Petitioner's case, right from the inception of the Petition, that her signatures have been indiscriminately, wrongfully and illegally secured by the Respondent No. 4 on a large number of documents. According to him, the impugned share certificates, in fact, buttress the Petitioner's case. He submitted that the very fact that the Petitioner has signed on the reverse of two different share certificates in respect of the same set of shares, clearly, demonstrates that these signatures have been indiscriminately, wrongfully and illegally secured by the Respondent No. 4 for illegal purposes, including facilitating the illegal transfers and raising such allegations. He, therefore, argues that the Petitioner has not knowingly signed the impugned share certificates, and hence, it is wrong to allege that the Petitioner is not aggrieved party in terms of Section 108 of the Act. 19. In continuation of his argument, Mr. Bhatt next submitted that the impugned t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther submitted that another factor which militates against the Petitioner's consent and/or willingness qua the impugned transfers is the fact that if the Petitioner had, in fact, consented and/or knowingly participated in the impugned transfers, the Respondent Nos. 3 to 5 could have secured her signature on transfer instruments and not resorted to mutilation of share certificate to remove her name there from. The Ld. Sr. Counsel submits that undisputedly, the Petitioner has not knowingly signed on any instrument of transfer to facilitate removal of her name as a member of Respondent No. 1 and joint shareholder qua the said shares. This, coupled with the fact that Respondent Nos. 3 to 5 have wrongfully secured the Petitioner's signatures on two share certificates in respect of the same set of shares, makes it apparent that the Petitioner has not consented or knowingly participated in the impugned transfers. They are against the Petitioner's volition. The aforesaid facts clearly, distinguish the present case from the facts of the aforesaid decisions referred to and relied upon by the Respondents. 23. Mr. Bhatt submitted that the ratio of the decisions is that statutory r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld like to reproduce the questioned documents Annexure "Rl", "R2", and "R3" referred to and relied upon by the Contesting Respondents in support of their contentions. R-1 Sulochana N. Kalyani Parvati Nivas 221, D Kalyani Nagar Pune 411 006, India Phone: (022) 26651001 Fax . (020) 26651999 July 6, 2007 To, The Board of Trustees NS Trust 221, D, Kalyani Nagar Parvati Niwas Pune 411 006 Dear Sir, Sub: Resignation of Trusteeship I had consented to act as "First Trustee" of your trust on 10th April 1999. Due to old age and other responsibilities I am unable to continue to act as trustee of your trust. I am therefore resigning from my trusteeship from today. I request you to kindly accept my resignation and relieve me from my trusteeship of your trust. Thanking you, Yours sincerely, (Mrs. Sulochana Neelkanth Kalyani) R-2 Declaration of Relinquishment made and executed at Pune on the 7th day of July 2007. I, Mrs. Sulochana Neelkanth Kalyani, Age about 74 years, occupation: Industrialist, resident of 221, D, Kalyaninagar, Parvati Nivas, Pune 411 006 do hereby solemnly declare on oath and state as under: 1. That aprivate trust has been made on 10th of April 1999 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 1193-B, K.B. Dhuru Road, Dadar, Mumbai 400028. In their capacity of a trustees of NS Trust created under indenture dated 10th April 1999. Dear Sirs, (1) Yourself & myself were trustees of the said NS Trust. I was also beneficiary of the said trust. (2) By my declaration on oath made on 7th July 2007 relinquished all my rights to the benefits of the said trust, whether to the income or to the corpus. I have voluntarily and on my own have relinquished my rights and benefits to which I was entitled. (3) By this letter I wish to inform you the fact of my relinquishment with a request to you to act as trustee of the said trust without considering me as beneficiary. You may act as if I was never beneficiary of the said trust. (4) A copy of my declaration on oath is sent to you along with this letter. Please acknowledge the receipt of the same. Thanking you, Yours sincerely, (Mrs. Sulochana Neelkanth Kalyani) 28. Having analyzed the facts and circumstances of the case, I am not inclined to accept that the doctrine of "estoppel", "waiver" and/or "acquiescence" would apply to the facts of the case in hand. By virtue of Section 108 of the Act, it is mandatory for a valid tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Companies Act. In my opinion, these allegations are sufficient to hold that the Petitioner is a "person aggrieved" within the meaning of Section 111(4) of the Act, whose name, according to the Petitioner, has been removed without sufficient cause by the Company. 30. I have also gone through the decisions cited by the Respondents counsel. I agree with Mr. Bhatt that the facts of this case and the facts of the reported cases are distinguishable and have, therefore, no application for the reason attributed by him. In his submission referred above I, therefore, for the sake of brevity would not therefore, come to the conclusion that the Petitioner has locus standi to file the instant petition for redressal of her grievances by seeking rectification of Register of Members of the Company. These points are, therefore, answered accordingly. 31. Dealing with another preliminary objection raised on behalf of the Respondents, Mr. Mookherjee, Ld. Sr. Counsel appearing for the Contesting Respondents, submitted that the petition is bad for non-joinder of necessary parties, and therefore, liable td be dismissed at the threshold stage on this ground alone. The Ld. Sr. Counsel submitted that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the instance of the shareholder and/or member of the Company. According to him, the petition, therefore, seeks vindication of rights of the Petitioner as a member/shareholder. It is not and cannot be an action in relation to the Trust. He, therefore, submitted that the objection raised by the contesting Respondents is without substance and liable to be reacted. 34. Having considered the rival submissions, in my opinion, the preliminary objection with respect to non-joinder of necessary parties taken by Answering Respondents is absolutely unsustainable in law. Further, the general rule in regard to impleadment and striking out of the parties is that the plaintiff in a suit, being dominus litis, may choose the person against whom he wishes to litigate. The Petitioner cannot be compelled to sue a person against whom he does not seek any relief. Consequently, a person who is not a party has no right to be impleaded against the wishes of the plaintiff. However, this general rule is subject to the exception as stipulated in Order 1 Rule 10(2) of the Civil Procedure Code which provides for impleadment of proper and necessary parties. It is a well settled proposition of law that a nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er/Co-trustee is deprived of filing of a petition for redressal of his/her grievances by way of rectification of Register Members, it would imply that such Petitioner/Co-trustee is remediless. It is a settled proposition that a party cannot be left without remedy under law. It is also fundamental law that no party can be compelled to invite evidence against himself/herself. It is also pertinent to mention here that the parties, who, according to the Respondents, are the necessary and proper parties have not approached this Board till date for their impleadment as a party in this petition despite having knowledge of the instant proceedings. Therefore, in my view, the Contesting Respondents are not entitled to contend that the petition suffers from non-joinder of necessary and proper parties. 37. In so far as the decisions referred to by the Respondents are concerned, in my opinion, the same have no application to the facts of the case in hand. The said decisions are distinguishable as the facts of those cases related to civil suits filed for recovery of property, whereas the present petition merely seeks rectification of the Register of Members so as to correct the wrongful deletio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to show that she had accepted the transfers of the shares. d. The Petitioner has not produced any document to show that she acted as a Trustee after 6/7/2007, which she would have done if she had not actually resigned as a Trustee. 40. On the aforesaid premise, the Ld. Sr. Counsel appearing for the Contesting Respondents sought dismissal of the petition. 41. Replying to the aforesaid contentions, Mr. Bhatt, the Ld. Sr. Counsel for the Petitioner, submitted that the above allegation is also red-herring. He submits that the Petitioner's assertion of the letters and/or the Transfer Deed, being invalidated by exercise and practice of fraud, misrepresentation and undue influence, has no bearing on the substance of the Petition. According to him, the Petitioner has been confronted by the Respondent Nos. 3 to 5 with these documents, which are plainly illegal and/or wrongful. He, therefore, submits that the Petitioner is entitled to contend that these documents stand vitiated being executed by playing fraud, misrepresentation and/or undue Influence on her, and she shall challenge these documents in appropriate proceedings. 42. Mr. Bhatt further submitted that for consideration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court to rectify register of members (1) If- (a) the name of any person - (i) is without sufficient cause, entered in the register of members of a company, or (ii) after having been entered in the register, is, without sufficient cause, omitted there from; or (b) default is made, or unnecessary delay takes place, in entering on the register the fact of any person having become, or ceased to be a member; 31. the person aggrieved, or any member of the company, or the company, may apply to the Court for rectification of the register. 32. Sub-section (1) (a) of Section 155 refers to a case where the name of any person without sufficient cause entered or omitted in the register of members of a company. The word sufficient cause' is to be tested in relation to the Act and the Rules. Without sufficient cause entered or omitted to be entered means done or omitted to do in contradiction of the Act and the Rules or what ought to have been done under the Act and the Rules but not done. Reading of this sub-clause spells out the limitation under which the court has to exercise its jurisdiction. It cannot be doubted in spite of exclusiveness to decide all matter pertaining to the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicated. The Court should have examined itself to see whether even prima facie what is said is complicated question or not. Even dispute of fraud, if by bare perusal of the document or what is apparent on the face of it on comparison of any disputed signature with that of the admitted signature the Court is able to conclude no fraud, then it should proceed to decide the matter and not reject it only because fraud is stated. 45. In view of the law laid down in the aforesaid case, it is, thus, clear that the original jurisdiction in respect of rectification of Register of Members lies with the CLB only. It is only the CLB, who after hearing, if finds that the questions involved in the case are complicated questions of facts and law, it may relegate the parties to the civil court. On a close scrutiny of the facts of this case, in my opinion, no complicated questions of facts and law are involved. As discussed above, Mr. Bhatt, Ld. Sr. Counsel for the Petitioner, in the course of his arguments has not disputed the signatures of the Petitioner on the documents-in-question. The Petitioner has failed to give any particulars of the alleged fraud or misrepresentation, in the petition. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in favour of the Respondent No. 2 and, thereafter, in favour of the Respondent No. 3. He submits that this fact is also material and goes to the root of the matter to decide as to whether the Petitioner is competent to maintain the Petition or is estopped from doing so. 49. Referring to the decisions viz. (i) (S.P. Chengalvaraya Naidu Vs. Jagannath & Ors.) reported in (1994) 1 SCC Pg.1 and (ii) Sunil Poddar & Ors. Vs. Union of India & Ors. Reported in (2008) 2 SCC 326,, it was submitted by Mr. Mookherjee that the Petition requires to be dismissed for concealment of material facts and documents without going into the merits. He further referred to the following decisions in which similar proposition has been laid down viz. (a) Rajabhai Abdul Rehman Munshi v. Vasudev Dhanjibhai Mody AIR 1964 SC 3215 (b) K.D. Sharma v. Steel Authority of India Ltd. [2008] 12 SCC 481 (c) Dalip Singh v. State of Uttar Pradesh [2010] 2 SCC 114 (d) Oswal Fats & Oils Ltd. v. Addl. Commissioner (Administration), Bareilly Division [2010] 4 SCC 728 (e) Ramjasv Foundation v. Union of India [2010] 14 SCC 38 (f) Amar Singh v. Union of India [2011] 7 SCC 69 (g) Smt. Bittan Devi v. Bank of Baroda Manu/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to Mr. Bhatt, if the execution of the impugned documents was wrongfully secured, as in the present case, there can be no issue of knowledge or suppression. 54. The Ld. Sr. Counsel further submitted that the aforesaid decisions lay down the principle that the doctrine of suppression applies when a party approaching the court has to make full disclosure of facts and documents; such facts and documents are required to be relevant and material; and by virtue of such suppression, relief has been secured and/or was attempted to be secured by the party guilty of suppression. 55. Narrating the facts, Mr. Bhatt further tried to demonstrate that in the instant case none of these criteria stand fulfilled. According to him, there are reasons for the same. Firstly, these facts and documents were not to the knowledge of the Petitioner and as such, there was no question of making any disclosure; secondly, these documents are not relevant; thirdly, the letter dated 6/7/2007 relates to the Trust, and in view of Section 153 of the Act, the same is not relevant or material; fourthly because neither the Company nor the CLB is entitled to take cognizance thereof and, lastly, the Petitioner has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution of the Suit, Mr. Bhatt submitted that this allegation is also unmeritorious and is liable to be rejected. The Ld. Sr. Counsel submits that the institution of the suit does not in any manner prejudice the maintainability of the Petitioner and the Petitioner's entitlement to seek reliefs in terms thereof. Mr. Bhatt pointed out that the Petitioner has not filed the Suit and the Plaintiff therein is one Mr. Manohar Bassapa Hatarki the Settlor of the Trust and not the present Petitioner and hence this fact does not amount to suppression. Further, the cause of action in both the proceedings is different and distinct. The suit is filed by said Mr. Hattarki complaining of irregularities in the affairs of the Trust on the part of Respondent Nos. 3 to 5 herein and Shrikrishna Narhari Inamdar and challenges the co-option of Respondent Nos. 3 and 4 in the Trust and he sought permanent injunction against the distribution and transfer of the Trust properties; and he also challenges certain documents executed in relation to the Trust properties. As against this, Mr. Bhatt submitted that the present Petition filed under Section 111 of the Act challenges the removal of the Petitioner' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention of Mr. Bhatt, who stated that the Petitioner never knew about the execution of these documents. It is pertinent to mention here that the evidence on both the sides have been led now and the affidavits filed by them are available on record. On a careful analysis of the facts, I am not inclined to believe the statement of the Petitioner that she was not aware of the signing/execution of the aforesaid documents. She has not denied signatures on it. It is not worthy to rely upon that she has signed these papers in a routine manner without knowing the actual transaction therein. Having given my serious thought on these pleadings it is diffcult for me to believe that the Petitioner's signatures were obtained on these documents by misrepresentation. It is pertinent to mention here that the Petitioner has been director on the Board of the Companies. She is not a parda nashin, illiterate lady. She is well educated. It is impossible to believe that she would sign any documents without reading the contents thereof. Based on the evidence, by way of affidavits filed in the course of the proceedings, I have come to the conclusion that the Petitioners have deliberately, knowin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the law of limitation. In this regard, it has been argued on behalf of the Contesting Respondents that the Company Law Board has taken over the original jurisdiction being exercised by the High Court under Sections 397, 398, 155 (now Section 111) of the Act. According to Mr. Mookherjee, when the Company Law Board is exercising the same jurisdiction that the High Court exercised earlier, the limitation Act and/or principles and/or provisions analogous to the provisions of the Limitation Act, would be applicable to the proceedings before it. Mr. Mookherjee submitted that the decision in the case of Canara Bank v. Nuclear Power Corpn. of India Ltd (1995)84 Comp Cas 70 (SC), clearly lays down that the CLB is a Court. It is, therefore, contended that the provisions of the Limitation Act do apply to the proceedings pending before the CLB. In addition, the Ld. Sr. Counsel further contended that in any event, the Hon'ble Supreme Court in the Decision reported in 2000 (5) SCC Pg. 355, has held that the expression "Court" applies to all the terminals and authorities deciding the rights of the parties. That being the case, CLB is also a "Court" for the purpose of the Limitation Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 2 Cal LJ 264, d. Stridewell Leathers (P) Ltd. & Ors. v. Bhankerpur Simbhaoli Beverages (P) Ltd. (1994) 1 SCC 34, e. Anil Gupta v. Delhi Cloth and General Mills Co. Ltd. [1983] 54 Comp Cas 301 (Delhi), f. P. Sarathy v. State Bank of India (2000) 5 SCC 355. 68. In addition to the above, Mr. Mookherjee, Ld. Sr. Counsel appearing for the Contesting Respondents, submitted that the Petitioner has sought to contend that decisions of the Company Law Board that Limitation Act applies to proceedings before it is on the basis of a misreading of the decisions 1992 (2) CLT 264 however, according to him, this argument is untenable, as even wrong interpretation by the CLB cannot be re-agitated. Further, the CLB has in several decisions referred to above has held that the Limitation Act applies to the proceedings under Section 111(4) of the Act. 69. Distinguishing the decision as contained in AIR 1996 All P. 262 relied by the Petitioner's Counsel wherein it is held that CLB is not a Court for the purposes of the Limitation Act, Mr. Mookherjee submitted that the question involved in the said case was whether the Company Law Board was a court under Rule 5 of the High Court Rules and, thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board" means the Board of Company Law Administration constituted under Section 10-E; (11) "the Court" means - (a) with respect to any matter relating to a company (other than any offence against this Act), the Court having jurisdiction under the Act with respect to that matter relating to that company, as provided in section 10; (b) with respect to any offence against this Act, the Court of a Magistrate of the First Class or, as the case may be, a Presidency Magistrate, having jurisdiction to try such offence;' 73. Referring to the said provisions, Mr. Bhatt contended that it is thus apparent that the Act itself differentiates and distinguishes between the "CLB" and the "Court". There is, therefore, no justification for the CLB to hold itself as a Court, more so in the context of proceedings under the Companies Act. In fact, the Court is exhaustively defined and confined to the High Court; notified District Courts; and Magistrate Courts having jurisdiction to try offences under the Act. It was, therefore, argued that the CLB cannot be termed or held as a Court. 74. According to Mr. Bhatt, the aforesaid interpretation finds support in the other provisions of the Act. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. He, therefore, contended that the CLB can never be stated to be a part of the Courts established under the hierarchy prescribed under the Constitution of India. Further, the appointment of the members of the CLB is done by executive action and as such, does not satisfy the test of being a court. In this context, Mr. Bhatt, further asserted that the CLB is not a Court, and is supported by a Constitution Bench judgment of the Hon'ble Supreme Court in the matter of Union of India v. Madras Bar Association [2010] 11 SCC 1 According to Mr. Bhatt, this judgment, in fact, squarely applies to the situation at hand since it considers the position of the National Company Law Tribunal and holds the same not to be a Court. If the NCLT is not a Court, the CLB cannot be. Based on the above, it is, therefore, argued that there is no legal basis available either under the Act or otherwise to construe and hold that the CLB is a Court, and as such, the Limitation Act does not apply. 77. In addition to the above, Mr. Bhatt urged that the present Petition is filed under Section 111(4) of the Act - which does not prescribe any period of limitation for making a rectification application. Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not even placed before the CLB by the arguing counsel. With respect, the CLB's view is therefore, unconsidered; per incuriam; and not binding upon itself. According to him, the CLB has premised its decision on the decision reported in [2004] CLC 1094 i.e. Shri Tommy Mathew Vs Duroflex Lmited [2004] 122 Comp Cas 741 (CLB) ("Tommy Mathews Case") which in turn, applies Article 137 of the Limitation Act on the basis of the Calcutta High Court decision in the case of Smt. Nupur Mitra Vs Basubani Pvt. Ltd. (19990) 2 Cal LJ 264, but, according to Mr. Bhatt, both the decisions are inapplicable for the following reasons:- i. The Hon'ble Calcutta High Court has, in "Smt. Nupur Mitra's case" (supra) not decided the primary issue of whether the CLB is a "court" and as such, whether the Limitation Act applied to proceedings under Section 111 of the Companies Act, 1956. On the contrary, the Hon'ble Calcutta High Court has distinguished the Canara Bank's case - [Para 61]. ii. &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Consumer Disputes Redressal Commission, and does not consider whether the "Company Law Board" as defined under Section 2 (10A) of the Act was a "Court" as defined under Section 2(11)of the Companies Act, 1956 and the Limitation Act, 1963. This is not a judicial precedent and the finding at paragraph 12 in the said decision is an unreasoned observation. f. Further distinguishing the case of P. Sarathy v. State Bank of India (2000) 5 SCC 355, it was contended that in this Judgment, the issue before the court was whether the Deputy Commissioner of Labour (Appeals), Madras was a "Court" for the civil court to exclude time under Section 14 of the Limitation Act, 1963. Mr. Bhatt, therefore, contended that it was the civil court applying the Limitation Act, 1963. Reliance on this case is inappropriate. According to Mr. Bhatt, the CLB not being a Court, cannot make the Limitation Act, 1963 applicable to itself. 79. It was further argued by Mr. Bhatt that the Petition clearly states that the Petitioner has become aware of the impugned transfers only post March 2011 when she caused a search to be taken in the records of statutory authorities, including Registrar of Companies. According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llegal but also that the Petitioner was not cognizant of and had not consented to the same. He, therefore, contends that on all counts, N.S. Nemura Consultancy India (P.) Ltd. case (supra) applies, and the Petition is liable to be held within time and an adverse inference is liable to be drawn against the Respondents. 81. I have considered the rival submissions carefully and gone through the decisions cited by the Ld. Counsels appearing from both the sides. Having given my anxious thought to the contentions of Mr. Bhatt that CLB is not a court for the reasons attributed by him in his arguments mentioned above, I am not inclined to accept his contentions. In the case of Canara Bank (supra), the Hon'ble Supreme Court in the similar case, filed under Section 155 of Act, has categorically held that the CLB is court. I would like to extract the relevant part of the said decisions which confirms the aforesaid view here as under:- "Now, under section 111 of the Companies Act, as amended with effect from 31 May, 1991, the Company Law Board performs the functions that were theretofore performed by courts of civil judicature under section 155. It is empowered to make orders directing r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the case referred to and relied upon by the Respondents, but I am not convinced with those reasons. For the sake of brevity, I am not reproducing the relevant facts referred to by Mr. Bhatt. However, relying upon the decision of Canara Bank (supra), I hold that CLB is a court and hence the provisions of Limitation Act in respect of the petition filed under Section 111(4) of the Act are applicable. 85. I look this point from another angle also. The Law of Limitation is founded on public policy. Its aim being to secure the quiet of community, to suppress fraud and perjury, to quicken diligence, and to prevent oppression. Its object is to give effect to the maxim, interest re-publicoe out sit finis littum-the interest of the state requires that there should be limit to litigation and to prevent disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or laches. The object of the statutes of limitations is to compel a person to exercise his right of action within a reasonable time as also to discourage and suppress stale, fake or fraudulent claims. 86. Keeping in view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for the purpose of limitation. I have already held that the petitioner was in the knowledge of the execution of the documents. Therefore, the date of execution of the documents is taken as the date of knowledge in this case. 90. Assuming for the sake of arguments, that the provision of the Limitation Act, do not apply to the petition filed under Section 111(4) of the Act, it Is amply clear from the facts and circumstances of this case, that the petition suffers from acute delay and laches. Time and again, it has been held that if a petition suffers from unexplained delay and laches, the petition may be dismissed on this ground also. This point is answered accordingly. 91. I have also taken into consideration the arguments advanced by Mr. Bhatt that where a transaction is void ab intio, the provisions of the Limitation Act do not apply. I am unable to accept this contention because for the purpose of limitation, the date of knowledge is the crux of the matter. In my opinion, even in the case of void transaction, if the case is barred by limitation, the court will not grant any relief to such party. 92. On overall discussion of the preliminary objections raised by the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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