2021 (7) TMI 817 - AT - Companies Law

Appeal dismissed for being time-barred and lacking merit. No fraud found in approved scheme.

The Tribunal dismissed the appeal as time-barred and lacking merit. It held that the appellants were aware of the impugned orders before the claimed date ... Condonation of delay in filing petition for third time - Extension of period of limitation - the scheme of amalgamation was approved way back but was not implemented yet - Hon’ble Supreme Court extended the period of Limitation, whether condonable or not, with effect from 15.03.2020 which is continuing till the date of filing of the Appeal - first Appellant was infected with Covid and was admitted in the hospital from 01.09.2020 to 20.09.2020 - HELD THAT:- In the instant case, the Appellants are silent about the receipt of free copy. Be that as it may, they chose to apply for a certified copy only on 08.08.2020 and received it on 12.08.2020 and filed this Appeal on 06.11.2020 after 86 days. The ground that the MD was not available for 20 days as he was infected with Covid, though we consider genuine, does not prevent a Company comprising other Directors to prefer an Appeal. It is submitted that the Order dated 19.01.2020 was uploaded on 22.01.2020. 45 days from that date also expires on 06.03.2020, prior to the lockdown period - 45 days as contemplated under Section 421(3) of the Companies Act, 2013, is to be counted from 10.01.2020 and the period ends on 24.02.2020 and it is seen from the record that the Appellant herein filed this Appeal only on 06.11.2020. By virtue of the proviso to Section 421(3), this Tribunal is empowered to condone the delay up to a period of 45 days - the Limitation has expired prior to 15.03.2020 and therefore the question of applicability of the Orders relied upon by the Learned Counsel for the Appellants do not apply to the facts of this case. The Scheme of the Amalgamation was discussed and approved on 02.01.2018, had taken effect on 31.03.2018 and the said Scheme was approved by NCLT way back vide Impugned Order dated 05.11.2019 and that this Appeal was filed on 06.11.2020 - a perusal of the Minutes of the Meetings of the Board Meetings filed before us do not evidences any objections raised by the Appellants at that point of time i.e. when the Scheme of Amalgamation was approved - the period of Limitation prescribed under Section 421(3) of the Act has lapsed on 24.02.2020 much prior to the lockdown period/pandemic situation and hence having regard to the facts and circumstances of the attendant case, it is not a fit case, in the interest of Justice to exercise any discretion empowered under proviso of Section 421(3) and condone the delay in the absence of any ‘sufficient cause’ and ‘substantial reasons’. Appeal dismissed. Issues Involved:1. Limitation period for filing the appeal.2. Alleged fraud and concealment of material facts.3. Validity of the Valuation Report and Share Swap Ratio.4. Knowledge and discussion of the impugned orders in Board Meetings.Detailed Analysis:1. Limitation Period for Filing the Appeal:The appellants contended that they first became aware of the impugned orders on 27.06.2020 during a Board Meeting. They argued that the appeal was filed within 90 days from receiving the certified copy on 12.08.2020. The respondents countered that the appellants knew about the orders earlier, specifically on 10.01.2020, and thus, the appeal was barred by limitation. The Tribunal noted that the appellants were aware of the orders during the Board Meeting on 10.01.2020 and that the appeal filed on 06.11.2020 was beyond the permissible period, even considering the Supreme Court's extension of limitation due to the pandemic. The Tribunal concluded that the limitation period expired on 24.02.2020, prior to the lockdown, and the appeal was time-barred.2. Alleged Fraud and Concealment of Material Facts:The appellants argued that the Valuation Report dated 07.02.2019 was fraudulent and the orders were obtained by the respondents through fraud and concealment of material facts. They claimed that the Share Swap Ratio was decided before the Valuation Report was prepared, indicating a fraudulent exercise. The respondents refuted these claims, asserting that the appellants were aware of the proceedings and had not raised any objections earlier. The Tribunal found no substantial evidence of fraud or concealment that would invalidate the orders.3. Validity of the Valuation Report and Share Swap Ratio:The appellants questioned the validity of the Valuation Report and the Share Swap Ratio, arguing that the ratio was decided without the report, making it a fraudulent exercise. They also contended that the valuation was not conducted by a registered valuer as required under Section 247. The Tribunal noted that the appellants did not provide sufficient evidence to substantiate these claims and that the Share Swap Ratio and Valuation Report were part of the approved scheme of amalgamation.4. Knowledge and Discussion of the Impugned Orders in Board Meetings:The appellants claimed that the impugned orders were not discussed in the Board Meetings held on 10.01.2020, 06.05.2020, 15.05.2020, 20.05.2020, and 04.06.2020, and were only brought to their notice on 27.06.2020. The respondents argued that the orders were discussed in the Board Meeting on 10.01.2020, and the minutes were circulated via email on 18.01.2020. The Tribunal reviewed the minutes and found that the orders were indeed discussed on 10.01.2020, and the appellants were aware of them. The Tribunal concluded that the appellants' claim of lack of knowledge was unfounded.Conclusion:The Tribunal dismissed the appeal, finding it barred by limitation and lacking merit. It held that the appellants were aware of the impugned orders well before the claimed date and had not provided sufficient cause for the delay in filing the appeal. The Tribunal also found no substantial evidence of fraud or concealment that would invalidate the orders.