2019 (9) TMI 1305 - Tri - Companies Law

Appeal granted despite delay, costs deposited, transfer refusal upheld, jurisdiction clarified

Amrex Marketing Private Limited Versus Akal Spring Limited and Others

The Tribunal allowed the appeal, condoning the delay in filing based on the applicant's reasons and circumstances. The case proceeded subject to the ... Condonation of delay of 186 days in filing the Appeal - Rejection of transfer the shares in the name of the applicant - Sections 58 and 59 of the Companies Act, 2013 - HELD THAT:- Though the applicant made a request for transfer of shares for the first time on 29.11.2011, but the respondent-company, vide letters dated 10.06.2015 and 11.01.2016 advised the applicant to submit the correct forms to enable it to affect the transfer of shares in the name of the applicant-company, and finally rejected the request of the applicant, only on 19.08.2016. Hence, in the circumstances, we hold that the delay commenced with effect from 19.08.2016 only. It is the settled principle of law that while applying the provisions of the 1963 Act, more so for condonation of delay in filing appeal, justice would be done when the matter is fought on merits and in accordance with law rather than dispose it off on technicalities and that too at the threshold. In this view of the matter and in the circumstances and for the reasons mentioned by the applicant, the delay deserves to be condoned - Delay condoned - application allowed. Issues involved:Delay in filing appeal under Sections 58 and 59 of the Companies Act, 2013 - Condonation of delay under Rule 32 and Rule 153 of the National Company Law Tribunal Rules, 2016 - Compliance with the provisions of the Limitation Act, 1963 - Refusal of transfer of shares by respondent company - Jurisdiction of the Tribunal to entertain appeal beyond prescribed time limit.Analysis:1. Delay in Filing Appeal under Companies Act, 2013:The case involved a delay in filing an appeal under Sections 58 and 59 of the Companies Act, 2013. The applicant sought condonation of a 186-day delay in filing the appeal under Rule 32 and Rule 153 of the National Company Law Tribunal Rules, 2016, along with the provisions of the Limitation Act, 1963. The respondent argued that the actual delay was 1795 days, dating back to the initial request made in 2011. The Tribunal examined the provisions of the Companies Act, noting the right to appeal against refusal of registration of transfer of securities and the applicable timeframes.2. Condonation of Delay and Compliance with Limitation Act:The applicant contended that the delay was not willful and explained that the delay was due to the need to collect documents dating back to 2011 after the respondent's final refusal in 2016. The Tribunal considered the applicant's explanation and held that the delay should be calculated from the date of final refusal, i.e., 19.08.2016. It was emphasized that justice should prevail over technicalities, and the delay was condoned based on the applicant's reasons and circumstances.3. Refusal of Transfer of Shares:The respondent rejected the transfer of shares citing non-compliance with the Articles of Association, specifically regarding the right of first refusal to existing members. The respondent's refusal was communicated through a detailed letter outlining the reasons for rejection. The Tribunal analyzed the communication and found that the rejection was based on valid grounds as per the Articles of Association.4. Jurisdiction of Tribunal to Entertain Appeal:The Tribunal referenced previous judgments, including those from the Hon'ble High Court of Calcutta, regarding the jurisdiction to entertain appeals beyond prescribed time limits. It was noted that the delay can be condoned if valid reasons are presented. The Tribunal highlighted a Supreme Court decision overturning a Calcutta High Court ruling, emphasizing the need to consider all grounds raised by the appellant and not just focus on the issue of limitation.5. Final Decision:Considering the facts and legal precedents, the Tribunal ultimately allowed the appeal, subject to the deposit of costs. The delay was condoned, and the case was directed to proceed further upon compliance with the specified conditions. The parties were informed of the decision, and the order was pronounced in open court.This detailed analysis covers the issues of delay in filing the appeal, condonation of delay, refusal of transfer of shares, and the jurisdiction of the Tribunal to entertain appeals beyond prescribed time limits, providing a comprehensive understanding of the judgment.