Application for Amendments Dismissed for Lack of Bona Fides

The Tribunal dismissed the application for amendments, deeming it unnecessary and lacking bona fides for determining the real issues in the case. The petitioner was advised to bring subsequent acts of oppression on record through an affidavit without amending the pleadings. No costs were awarded in the matter.

---

---

Issues Involved:
1. Amendments to the reliefs and body of the petition.
2. Challenge to the appointment of Respondent No. 3 as Director.
3. Allegations of mismanagement and oppressive behavior.
4. Siphoning of company funds by Respondent Nos. 2 and 3.
5. Compliance with procedural rules for amendments.

Detailed Analysis:

1. Amendments to the reliefs and body of the petition:
The petitioner sought several amendments, including the removal of Respondent No. 3 as Director, prevention of changes in directorship without minority shareholders' approval, and directions for the respondents to compensate for losses and statutory liabilities caused by their mismanagement and oppressive behavior. The petitioner also sought to restrain Respondent No. 3 from discharging functions as Director and receiving remuneration.

2. Challenge to the appointment of Respondent No. 3 as Director:
The petitioner argued that the appointment of Respondent No. 3 was illegal and done without his consent. The petitioner claimed no Board Meeting was convened for this appointment, and no resolution was passed. The petitioner also highlighted that Respondent No. 3 automatically vacated office on September 30, 2015, as no shareholders' resolution approved his appointment. The petitioner alleged that Respondent No. 2 used his authority to appoint his son (Respondent No. 3) to increase control over the company.

3. Allegations of mismanagement and oppressive behavior:
The petitioner alleged that Respondent Nos. 2 and 3 engaged in purchasing raw materials at higher prices from firms they were interested in and selling products at lower prices to those firms, causing financial losses to the company. The petitioner claimed these actions resulted in erosion of shareholders' net worth and statutory liabilities.

4. Siphoning of company funds by Respondent Nos. 2 and 3:
The petitioner accused Respondent Nos. 2 and 3 of siphoning off significant funds from the company's accounts to their personal accounts and other companies they were interested in. Evidence of these transactions was provided through bank statements.

5. Compliance with procedural rules for amendments:
The Tribunal referred to Rule 155 of NCLT Rules, Regulation 46 of Company Law Board Regulations, and Order VI, Rule 17 of the Civil Procedure Code, which allow amendments necessary for determining the real question in controversy. The Tribunal noted that the first amendment application was filed beyond the 30-day period from the completion of pleadings and after the commencement of the hearing, thus lacking due diligence.

The Tribunal emphasized that due diligence means careful and persistent application and effort. The petitioner had knowledge of Respondent No. 3's directorship before filing the petition but chose not to challenge it initially. The Tribunal found the amendment application to be an afterthought and lacking bona fides. The real controversy was whether there were acts of oppression and mismanagement, not the appointment of Respondent No. 3.

Conclusion:
The Tribunal dismissed the application for amendments, stating it was not bona fide and unnecessary for determining the real issues in the case. The Tribunal concluded that the petitioner could bring subsequent acts of oppression on record by filing an affidavit without amending the pleadings. No orders as to costs were made.

---