2020 (10) TMI 773 - Tri - Companies Law

Director removal petition dismissed due to lack of evidence and limitation bars. Allegations unsubstantiated.

Hajee Ummer Kizhakkumbrath Versus Penda Marketing Private Limited and Ors.

The tribunal dismissed the petition seeking the removal of a director and nomination of a new director due to lack of evidence and being barred by ... Oppression and mismanagement - Removal of Director - nomination of a new director - submission of Audited Balance Sheet - time limitation - HELD THAT:- The averments made by the petitioner in the petition are not supported by relevant documents. In fact, the petitioner has not annexed any documents to support his case and prima facie we are of the view that the petitioner has failed to make out a case of oppression and mismanagement as against the Respondents. It can be seen that the averments made by the petitioner in the petition are that he had infused some funds into the 1st Respondent Company after which he had been tricked into by the Respondents and resigned as a Director of the 1st Respondent Company on 17.11.2012. Now, after the lapse of almost 5 years, the petitioner has filed the present petition to induct him as the Director of the 1st Respondent Company. It is evident from the records that the petitioner has acted in pursuance of the Share purchase agreement entered into between the parties on 04.07.2012 and has transferred 1,80,000 shares out of the 3,00,000 shares in favour of the 2nd and 3rd Respondents and has also received the consideration in relation to the same. However, now in the present petition, the petitioner claims that he still holds 3,00,000 shares in the 1st Respondent Company, which is more than the shares held by the 2nd and 3rd Respondent. Thus, the petitioner has suppressed the materials facts before this Tribunal and has not come with clean hands. Time Limitation - HELD THAT:- The cause of action for the petitioner to file this petition arose on the day on which he alleged to have been tricked by the Respondents to resign as a Director of the 1st Respondent Company i.e. on 17.11.2012. Admittedly, the petitioner has filed the present petition before this Tribunal on 30.11.2017, which is almost after a lapse of 5 years. Section 433 of the Companies Act, 2013 contemplates that the provisions of the Limitation Act, 1963 shall, as far as may be, apply to proceedings or appeals before the Tribunal or the Appellate Tribunal, as the case may be - the present Petition can also be construed as an application as defined under the Limitation Act, 1963. Thus, irrespective of whether a petition under Section 241 of the Companies Act, 2013 falls under Article 137 or under Article 113 of the Limitation Act, 1963, the time period specified is three years when the right to sue / right to apply accrues, as the case may be. The petition filed by the petitioner is prima facie barred by limitation - Further, even on merits, the petitioner has failed to make out a case of oppression and mismanagement into the affairs of the 1st Respondent Company and the petitioner has only made sweeping allegations as against the Respondents and failed to corroborate the same with relevant material document - Petition dismissed. Issues Involved:1. Removal of a director.2. Nomination of a new director.3. Submission of audited balance sheets.4. Allegations of oppression and mismanagement.5. Barred by limitation.Issue-wise Detailed Analysis:1. Removal of a Director:The petitioner sought the removal of Mr. Muhammed Sharshad Baniyandy from the directorship of M/s. Penda Marketing Pvt. Ltd. The petition claimed that the 2nd and 3rd Respondents had misled the petitioner, leading to significant financial investments and personal guarantees, without fulfilling the promise of making him a director. However, the tribunal found that the petitioner had resigned voluntarily and had not provided sufficient evidence to support the claim of being misled.2. Nomination of a New Director:The petitioner also requested to be nominated as a director of the company. The tribunal noted that the petitioner had previously resigned from the directorship voluntarily and that the resignation was accepted by the board and duly filed with the Registrar of Companies. The tribunal found no grounds to reinstate the petitioner as a director, especially given the lack of supporting documentation for the claims made.3. Submission of Audited Balance Sheets:The petitioner demanded the submission of audited balance sheets from 2009 to 2017. The tribunal observed that the petitioner had not been provided with these documents, which could be considered a valid grievance. However, the tribunal also noted that the petitioner had not pursued this issue diligently over the years, which weakened the claim.4. Allegations of Oppression and Mismanagement:The petitioner alleged that the 2nd and 3rd Respondents had engaged in oppressive and prejudicial conduct, including diverting company funds and failing to include the petitioner in the management despite significant investments. The tribunal referenced the case of S. Seetharaman and Others vs. Stick Fast Chemicals Pvt. Ltd., emphasizing that allegations of oppression and mismanagement must be supported by clear and specific facts, which the petitioner failed to provide. The tribunal concluded that the petitioner had not demonstrated continuous acts of oppression or mismanagement.5. Barred by Limitation:The tribunal addressed the issue of limitation, noting that the petition was filed almost five years after the alleged cause of action arose. According to Section 433 of the Companies Act, 2013, the provisions of the Limitation Act, 1963 apply to proceedings before the tribunal. The tribunal cited the case of Praveen Shankaralayam vs. M/s. Elan Professional Appliances Pvt. Ltd., which upheld the applicability of the Limitation Act to such petitions. The tribunal concluded that the petition was prima facie barred by limitation, as it was filed beyond the permissible period.Conclusion:The tribunal dismissed the petition on multiple grounds:- The petitioner failed to provide sufficient evidence to support the claims of being misled and oppressed.- The petition was barred by limitation, having been filed almost five years after the cause of action arose.- The petitioner had not come to the tribunal with clean hands, having suppressed material facts and made exaggerated claims regarding shareholding.The petition was dismissed without costs, and all connected interim applications were closed.