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TMI Blog2017 (1) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerning companies by Section 433 of the Companies Act, 2013 (for brevity 2013 Act'). It is pertinent to first notice Section 433 of 2013 Act which reads as follows: "433 - The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to proceedings or appeals before the Tribunal or the Appellate Tribunal, as the case may be." 2. A perusal of the aforesaid provision makes it patent that the Limitation Act would apply to the proceedings or appeals before the Tribunal or the Appellate Tribunal. The question then is, what would be the period of limitation in cases where the petitioner has complained of illegal induction of respondents as directors and wrongful reduction of their share capital with the allegations against the respondents of grabbing majority shareholding unfairly as an act of oppression. It appears that there is no specific provision made either in the substantive section of the Limitation Act or in the Articles as per the Schedule. A close scanning of the schedule, however, reveals that Articles 1-112 deal with various types of suits viz., suits relating to accounts where period of limitation is three years, suits relating to contracts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete implementation of its terms. It was further held that the Company Law Board, when it deals with an application u/s. 634A of the 1956 Act and sits as an executing court, then it is subject to all the limitations to which a Court executing a decree is subject. 6. The aforesaid view is based on the provisions of Companies Act; 1956 and the position of the present Tribunal is far superior than the erstwhile Company Law Board in the matter concerning implementation of orders passed by the Tribunal. Section 424 of 2013 Act classifies the nature of proceedings before the Tribunal and provides as under: "424 - (1) The Tribunal and the Appellate Tribunal shall not, while disposing of any proceeding before it or, as the case may be, an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided by the principles of natural justice, and, subject to the other provisions of this Act [or of the Insolvency and Bankruptcy Code, 2016] and of any rules made thereunder, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure. (2) The Tribunal land the Appellate Tribunal shall have for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) to 2(h). Sub-section 3 makes it further clear that any order made by the Tribunal may be enforced by it in the same manner as if it were a decree made by a Court in a suit pending therein. It has further been clarified that all proceedings before the Tribunal are deemed to be judicial proceedings within the meaning of Sections 193 and 228 and for the purpose of Section 196 of the Indian Penal Code. The Tribunal is deemed to be a Civil Court for the purpose of Sec. 195 and Chapter 26 of the Code of Criminal Procedure, 1973. 8. Another feature in this regard is revealed by Sec. 425 of 2013 Act. The Tribunal has been vested with the same jurisdiction, powers and authority in respect of its contempt as the High Court has and it may exercise for this purpose all the powers under the provisions of Contempt of Courts Act 1971. Therefore, it becomes evident that the orders passed by the Tribunal are executable as decree of the Court and in case of any violation of its orders, Sec. 425 vests the Tribunal with the power of issuing contempt. Once it is a decree then it follows that the proceedings under Sec. 241 and 242 of 2013 Act are necessarily proceedings in a suit. It has all trappin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which relief by a suit in a Civil Court must be claimed, may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Article 226 can be measured. Where the delay is more than the period prescribed by the Limitation Act, then it would be appropriate for the Court to hold that it is unreasonable. In that regard, reliance may be placed on 7-Judge judgment rendered in the case of State of Madhya Pradesh v. Bhailal Bhai AIR 1964 SC 1006. The aforesaid view has been repeatedly followed and applied by Hon'ble The Supreme Court. In a recent judgment rendered in the case of Mahanagar Telephone Nigam Ltd. v. State of Maharashtra [C.A. No. 5428/2013, dated 11-7-2013] placing reliance on the judgment rendered in the case of Bhailal Bhai (supra), Hon'ble The Supreme Court observed that in equitable jurisdiction, the maximum period of limitation can reasonably held to be the same as has been provided by the Limitation Act. Where a person comes to the Court for relief under Article 226, then as a general rule, if there has been unreasonable delay, the Court ought not ordinarily to lend its aid to a party guilty of delay. Hon'ble The Supreme Court procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and delay in courts, and the jurisdiction so transferred does not involve any technical aspects requiring the assistance of experts, the Tribunals should normally have only judicial members. Only where the exercise of jurisdiction involves inquiry and decisions into technical or special aspects, where presence of technical members will be useful and necessary, Tribunals should have technical members. Indiscriminate appointment of technical members in all Tribunals will dilute and adversely affect the independence of the Judiciary. (d) The Legislature can re-organize the jurisdiction of Judicial Tribunals. For example, it can provide that a specified category of cases tried by a higher court can be tried by a lower court or vice versa (A standard example is the variation of pecuniary limits of courts). Similarly while constituting Tribunals, the Legislature can prescribe the qualifications/eligibility criteria. The same is however subject to judicial Review. If the court in exercise of judicial review is of the view that such tribunalisation would adversely affect the independence of judiciary or the standards of judiciary, the court may interfere to preserve the independence and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011. The present petition was filed first in October 2015 and then re-filed on 07.09.2016. According to the averments made in para 6.2, the petitioner was appointed as one of the first directors of Respondent No. 1 company on 19.5.2009 along with Respondents No. 2 & 3. His share capital in the Respondent company was 33 per cent On a later date, Respondent No. 4 was appointed as director of the company on 30.7.2009 against the wishes of the petitioner. He did not ever express willingness freely and willfully to appoint Respondent No. 4 as the director. Therefore, the petitioner has prayed that appointment of Respondent No. 4 as director on 30.7.2009 be declared illegal. 17. In para 6.5, there are averments made by the petitioner that Respondent Nos. 2, 3 & 4 issued shares to one Mr. Vipin Sethi and some others without the consent/written approval and knowledge of the petitioner. The dates of allotment are stated to be 06.10.2009, 19.9.2009, 22.01.2010 and 03.02.2012. On the ground that the shares were allotted without the approval and consent of the petitioner being a director at that time, the allotment has been challenged. It is conceded that the total share capital of the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious act of oppression and mismanagement; (g) Director the Respondent Nos. 2 to 4 to adhere and honour the mutually agreed commitments; (h) Declare that the Respondent Nos. 2 to 4 have no power or authority to encumber, deal with the assets and properties of the Respondent No. 1 company or in any manner, intermeddle with the affairs of the Respondent No. 1 company. (i) Direct the Respondent Nos. 2 to 4 to render the full accounts of the company and to produce all statutory books of the company; (j) Pass an order and thereby appoint an independent person to evaluate the share value of the Respondent No. 1 company; (k) Director Respondent to pay salary to the Petitioner, of which he was entitled at par with the other Directors from retrospective effect; (l) Pass an order for winding up of the Respondent No. 1 company; (m) Pass such further and other reliefs as the nature and circumstances of the case may require as this Hon'ble Bench may consider fit. 19. The petitioner has made averments in para Sunder the sub head 'Limitation' by proclaiming that the petition is within the period of limitation as the acts of oppression and mismanagement are continuing. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reply sent to the Assistant Registrar of Companies on 23.2.2011 (P-3). 24. It would be profitable to refer to the facts disclosed in various paragraphs. It has been stated in para 2 that his shareholding was reduced from 33% to 1.91%. The aforesaid general assertion has been explained in para 6.5 of the petition. According to para 6.5, the allotment of shares by increasing the share capital was made on 06.10.2009, 19.9.2009, 22.01.2010 and 03.02.2012. The allegation is that the allotment of shares was made without his knowledge which he obviously has acquired on 23.2.2011 and even that later increase has come to his knowledge. The allegation that the petitioner was not aware of the Board meetings held in year 2009, 2010 or 2011 would pale into insignificance because on his own showing, the petitioner had the knowledge in 2011. The petitioner also had the knowledge of his removal as director which is evident from the perusal of the reply at para 10 dated 23.2.2011 (P-3). 25. It is thus evident that the cause of action to the petitioner has arisen in the year 2009 to February, 2012. The present petition has been filed first on 01.10.2015 before the erstwhile CLB and then re-filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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