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TMI Blog2004 (11) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... nter alia, were that although there was resolution of the Board of Directors passed in its meeting held on 3.6.19888 to allot the respondent 40% shares in the company and that the was to be appointed as NRI Director, the needful was not done by the company and the appellants. Apart from contesting this plea of the respondent herein on merits, the appellant herein had also raised some preliminary objections to the maintainability of the petition including the objection that the petition was hopelessly time barred as it was filed in the year 2003. The perusal of the order of the Board shows that this contention is specifically noted while taking note of submission made by the appellants herein. The Respondent herein had submitted the circumstances because of which Respondent filed the petition in the year 2003 and the contention of the Respondent herein was that the limitation would be deemed to have commenced with effect from 12.12.2001 when the legal notice was sent to the company. On 24.12.2001 company replied to the notice The perusal of the impugned order would show that there is no discussion on this issue by the board nor any findings are recorded herein. Limitation is an is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e requirements. The respondent company vide its letter dated 27.1.1989 sought necessary permission from the Reserve Bank of India for appointing the petitioner as NRI director. The Reserve Bank of India vide letter dated 4.2.1989 granted permission subject to the specified conditions. The petitioner was appointed as NRI director in the respondent company on 23.5.1989. However, he did not complete the desired formalities as were required of him in terms of the above mentioned letters and which were conditions precedent for the appointment. He never appointed his attorney nor himself attended the Board Meetings despite reminders sent by the company. Thus his name figures as NRI Director in the records of the company for about one year and since then he has never been appointed on the said post. He vacated the office of director under the provisions of Section 283(g) of the Companies Act, 1956. The petitioner had sent a DD for Canadian Dollars 5000 (Rs.70,105) dated 15.5.89 in favour of the respondent company which had been encashed on 12.6.89 and the money is lying with the respondent company since then. The Learned Counsel for respondent/appellant further submitted that the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hindustan Fasteners (Petition) Ltd. (AIR 1990 Delhi 32) wherein it is held that Limitation Act, 1963 would apply to the present proceeding Under Sections 397 & 398 and as per Article 137, a petition under these sections have to be filed within three years when the right to apply accrues. The present petition is liable to be dismissed on the short ground of limitation The reference was also following two judgments where it is held Companies Act, 1956 does not provide limitation period for filing a petition Under Sections 397 & 398 of the Companies Act, 1956. In such cases where the act does not provide for any limitation period, then the limitation period of three years as contemplated under the Limitation Act, 1963 would apply:- (1) (2000) 2SCC 628 Corporation Bank v. Navin Judgement Shah (2) 107 (2003) DLT 595 M.S. Shoes East Ltd v. M.R.T.P. 5. The Learned Counsel for Respondent accordingly prayed that the petition be dismissed with exemplary cost. The Learned Counsel for Petitioner C.P in 24/2003 submitted:- Respondent company is admittedly a family company and Respondent No. 2 is the real brother of Petitioner, the Respondent No. 3 is the wife of the Respondent No. 2 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... started with doubts creeping in his mind about the integrity of his brother about his shareholding and when again requested respondent No. 2 for his share certificate, the same was again deferred on one pretext or the other. The cause of action again arose when the petitioner conducted an inspection at the office of Registrar of the company during his visit and was shocked to see that no annual returns or balance sheets had been filed by the cause of action again arose in Nov. 2001 when the petitioner again visited India at a huge expense to sort out the issue of his share certificates with his brother but the same was deferred again . The petitioner through his nephew was constrained to file the company petition No. 34/2002 and on various dates thereafter when the respondent repeatedly sought time to file their reply and they pressurize the nephew to withdraw the said petition on 10.12.2002 which was allowed by this Board with liberty to the petitioner to reagitate his grievance by way of a fresh petition and the cause is continuing to arise thereafter. 7. The learned counsel for the petitioner submitted that no annual returns had been filed up to year 1992 . The annual returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties including respondent No. 2 were present. They cannot hide their failure and take advantage of the same. 9. The Learned Counsel for respondent has relied on case laws which have been discussed above which indicate the limitation act 1963 would apply to the proceedings Under sections 397/398 and a petition under these sections has to be filed within three years when the right to apply accrued. The material question is which is the cut date from where the years should be counted for. The learned counsel for respondent submitted that the cut of date at best can be 13.9.1989 when the respondent company got in cash the amount received from the petitioner. Thereafter the petitioner sent no communication except a legal notice in 2001. 10. The Learned Counsel for petitioner in reply brought to the notice of this Board Form 32 filed by the respondent company on 15.3.2001 which showed the petitioner as NRI director. It is not the case of the respondent company that they were not aware of the Board resolution of 1988 by which they were obliged to send the certificate of shares to the petitioner after taking certain actions which I have already discussed. Nor the respondent can claim t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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