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TMI Blog2019 (7) TMI 1427X X X X Extracts X X X X X X X X Extracts X X X X ..... been conducting the Company s affairs prejudicial to the Petitioner as also to the interests of the Company justifying the directions slapped in terms of the impugned order. Time Limitation - HELD THAT:- It is the dictum of law that the issue of limitation should be alive to the mind of the court dealing with the lis and has to be looked into irrespective of the fact that such an issue has not been raised by the Defendant/ Respondent - Appellants (Respondents 2 to 4 in Company Petition) would be within their rights to legitimately raise the issue of limitation notwithstanding the fact that their right to file defense stood forfeited. Unless the lis/ appeal falls within the exceptions enumerated under Sections 4 to 24 of the Limitation Act, 1963, the mandate of law enshrined in Section 3 cited above renders it imperative upon the Court/ Tribunal hearing the suit/ appeal to dismiss the lis filed or preferred after the prescribed period of limitation. Thus, no exception can be taken to such issue being raised by the Appellants (Respondents 2 to 4 in Company Petition). The impugned order does not suffer from any legal infirmity and the Company Petition is not barred by limitatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y shares of the Company thereby persuading the Petitioner to purchase the majority shareholding of equity shares of himself and other Respondents in the Company, allegedly at a huge premium. Petitioner claimed to have purchased 25,500 equity shares representing 51% equity shares of the capital of the Company from Respondents No. 2 and 4 at ₹ 275 per equity share as against face value of ₹ 10 per share with Respondents No. 2 and 4 assuring the Petitioner that all documents would be executed for transfer of majority shareholding of the equity shares in the Company in favour of Petitioner and in this regard all legal formalities and compliances will be observed. Allegedly, Petitioner was also assured of being made a non-retiring Director on the Board of Directors of the Company vested with Veto Power besides being made a signatory to all the bank accounts. Respondents No. 2 and 4 executed the prescribed Share Transfer Forms in favour of the Petitioner for the transfer of 25,500 equity shares. Transfer of shareholding was placed before the Board of Directors of the Company on 4th February, 2013 which passed the unanimous resolution for approval of the transfer of shareholdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. A glance at the record of the Tribunal brings it to fore that the Respondents did not file any reply despite several opportunities granted by the Tribunal. Thus, the allegations in the petition before the Tribunal stood unrebutted and uncontroverted. 4. The Tribunal found that the factum of investment of ₹ 70 Lakhs by Petitioner towards purchase of 25,500 shares belonging to R-2 and R-4 has not been at all disputed and the controversy stems out of breach of promise on the part of R-2 qua transfer of shares and appointment of Petitioner as Director. The Tribunal also found that the Respondents never intimated through notice the board meeting thereby keeping the Petitioner in dark in regard to day to day functioning of the Company. The Tribunal also found that the Respondents had also failed to invite the Petitioner to assume charge as Director and manage the affairs of the Company being the majority shareholder. The Tribunal was of the view that the Respondents conduct was questionable in as much as they received substantial money from the Petitioner on the pretext of transferring shares to him but defrauded him by not effecting transfer of shares in his na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded by Respondents in their records, thus, defrauding the Petitioner. It is further stated that the Petitioner was further persuaded by Respondent No.2 to advance him a loan of ₹ 20 Lakhs for utilizing the same for payment of Service Tax of the Company. Petitioner, believing in good faith gave a loan of ₹ 20 Lakhs to Respondent No. 2 as on 31st December, 2013 with the understanding that the same will be repaid by Respondent No. 2 within a period of two months. It is further stated that false documents were fraudulently filed by the Respondents with the Registrar of Companies to cheat the Petitioner who learnt about the true state of affairs only in year 2016 from the office of Registrar of Companies. It is further stated that after great persuasion the loan amount of ₹ 20 Lakhs was repaid to Petitioner on 7th August, 2015 i.e. after huge gap of more than one year and six months. It is further stated that the majority stake of the Petitioner was not reflected in the balance sheets and annual return filed by the Company for the Financial Year 2012-13, 2013-14. Incorrect and misleading information was provided to the Registrar of Companies. It is further stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner) that the Appellants (Respondents No. 2 to 4) are trying to reopen the case and raise issues which have already been decided. It is further submitted that the plea raised by Respondents No. 2 to 4 that cause of action arose on 4th February, 2013 when the documents pertaining to transfer of shares in favour of Petitioner were executed and same were approved by the Board of Directors in the Board Meeting held on the same date is misleading as the issue of limitation is a mixed question of law and facts and as a matter of fact Petitioner got knowledge of wrong doings of Respondents No. 2 to 4 only after doing a search with the Registrar of Companies in February, 2016 and the Company Petition was filed on 19th of September, 2016. It is submitted that these facts stand unrebutted and uncontroverted as the defense of Respondents No. 2 to 4 had been struck off. Company Petition was filed on 19th September, 2016 well within the period of three years prescribed as limitation, which would commence from the date of knowledge of misconduct of Respondents No. 2 to 4 viz. 2nd February, 2016 and subsequently, confirmed from the Annual Report of the Financial Year ending 31st March, 2016. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. There is no specific denial in regard to these facts which has the effect of admission on the part of Respondents No. 2 to 4. Plea raised before this Appellate Tribunal that the consideration amount of the transferred equity shares was refunded to Petitioner is a bald assertion which has neither been raised before the court of first instance nor is the same supported by record. This is apart from the fact that refund of consideration after completing the transaction of transfer would be of no consequence and would not invalidate the transfer of shareholding effected in favour of the Petitioner. This bald assertion emanating from the Appellant has to be outrightly rejected. 11. The unrebutted and uncontroverted factual matrix placed before the Tribunal as also forming the bedrock of the matter in issue before this Appellate Tribunal leads to no other conclusion than the one that the factum of transfer of majority shareholding in favour of Petitioner by Respondents 2 to 4 and approval of the transfer of 25,500 equity shares of the Company in favour of the Petitioner for a consideration amount of ₹ 70 Lakhs by the Board of Directors remains undisputed and stands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Petitioner as also to the interests of the Company justifying the directions slapped in terms of the impugned order. 12. The only question for consideration is the issue of limitation raised by the Appellants (Respondents 2 to 4 in Company Petition) through the medium of a Miscellaneous Application while their right to file reply to the Company Petition stood forfeited. It is the dictum of law that the issue of limitation should be alive to the mind of the court dealing with the lis and has to be looked into irrespective of the fact that such an issue has not been raised by the Defendant/ Respondent. Section 3 of the Limitation Act, 1963 eloquently speaks of this legal position which is profitably reproduced hereinbelow:- 3. Bar of limitation .-(1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence. Therefore, Appellants (Respondents 2 to 4 in Company Petition) would be within their rights to legitimately raise the issue of limitation notwithstanding the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was issued to Respondent No. 2 in regard to Annual General Meeting held on 30th September, 2013 to approve the Balance Sheet and Annual Report for Financial Year ending March 2013. Appellants have subsequently filed compliances in the prescribed format on 19th October, 2013 and 13th November, 2013, respectively. According to Respondent No.2, he gained knowledge about suppressing of factum of transfer of majority shareholding in his favour on search of documents filed with Registrar of Companies, thereby gaining knowledge firstly on 2nd February, 2016 and subsequently from the Annual Report of Financial Year ending March, 2016 filed with the Registrar of Companies, which revealed that the Appellants had fraudulently not disclosed the Respondent No. 2 as the majority shareholder of the Company. These facts stand unrebutted and uncontroverted. While each filing of statutory compliances suppressing the material facts in regard to majority shareholding of Respondent No. 2 with fraudulent intention on the part of Appellants would constitute a continuing cause of action, computation of period of limitation even from 30th September, 2013 (when the Annual General Meeting was held) wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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