NCLAT allows amendment in relief clause under Section 97 for equity shareholding and AGM conduct disputes

The NCLAT Chennai allowed an interlocutory application seeking amendment in the relief clause under Section 97 of the Companies Act, 2013 read with Rule 74 of the NCLT Rules, 2016. The case involved discrepancies regarding equity shareholding, AGM conduct, and submission of annual returns and financial statements for 2019-2020 and 2020-2021. The Tribunal held that the amendment application should have been considered when the final order was rendered in the company petition. The proposed amendment to include Financial Year 2023-24 did not change the case's nature, withdraw admissions, or require fresh evidence. Since the appeal was pending and the relief sought would directly impact the subsequent financial year, the amendment would help the Appellate Tribunal better understand the controversy's totality without adversely affecting the respondent's legally accrued rights. The appellant was directed to complete the amendment within two weeks, with the company appeal listed for 01.08.2025.

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ISSUES:

• Whether an amendment to the relief clause in a company petition under Section 97 of the Companies Act, 2013 can be allowed to include additional financial years for conducting Annual General Meetings (AGMs), approval, and filing of financial statements and annual returns during the pendency of proceedings.
• Whether condonation of delay in conducting AGMs and filing financial statements and annual returns can be sought as part of an amendment application during appellate proceedings.
• Whether interlocutory applications seeking amendment of relief clauses should be adjudicated on merits before final disposal of the main company petition.
• Whether permitting the amendment to include additional financial years adversely affects any legally accrued rights of the respondents.

RULINGS / HOLDINGS:

• The amendment to the relief clause to add the Financial Year 2023-24, in continuation of earlier amendments for preceding financial years, is permissible as it "does not change the nature of the case" nor requires fresh evidence, and is necessary to "better appreciate the controversy in its totality".
• Condonation of delay in conducting AGMs and filing financial statements and annual returns can be included in the amendment application, as the same was part of earlier interlocutory applications and is integral to the relief sought under Section 97 of the Companies Act, 2013.
• The interlocutory applications seeking amendments (IA(CA) No. 51/2023 and IA(CA) No. 47/2024) ought to have been considered on merits at the stage of final hearing of the company petition, and their closure without adjudication was improper.
• Allowing the amendment to include the Financial Year 2023-24 does not adversely affect any legally accrued vital right of the respondents and therefore should be permitted.

RATIONALE:

• The Court applied the provisions of Section 97 of the Companies Act, 2013, read with Rule 74 of the NCLT Rules, 2016, which empower the Tribunal to direct the conduct of AGMs and filing of financial statements and annual returns when there is default.
• The Court recognized that the passage of time during pendency of proceedings may give rise to additional financial years requiring similar relief, and such developments must be accommodated by allowing amendments to relief clauses to include those years.
• The Court emphasized procedural fairness by noting that interlocutory applications for amendment should be considered on merits at the final hearing stage, rather than being closed without adjudication.
• The Court rejected the argument that condonation of delay cannot be part of an amendment application, holding that since the main petition and earlier interlocutory applications included such relief, its inclusion is consistent and necessary.
• No dissent or doctrinal shift was indicated; the decision follows established principles allowing amendments to relief claims to reflect evolving circumstances during litigation to ensure effective adjudication of the controversy.

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