TaxTMI 
TaxTMI 
2019 (7) TMI 1427
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....ent No. 1 (hereinafter referred to as the "Company") and the Appellants (hereinafter referred to as "Respondents No. 2 to 4") alleging several acts of oppression/ mismanagement, came to be allowed with certain directions. The Appellants have assailed the impugned order primarily on the ground that the Tribunal erred in passing the impugned order in as much as the Petitioner had been repaid the entire consideration amount paid by him for the purchase of shares and the petition was barred by limitation. 2. A flashback of the events and the factual matrix bearing upon the case in hand, being inevitable, may briefly be noticed. The Company styled as 'Tulijabhavani Cold Storage Private Limited' was incorporated as a Private Limited Company on 30th June, 2003 with the main object of undertaking and carrying on provisions of cold storage and food processing, etc. with authorized paid up capital of Rs. 5 Lakhs. Respondents No. 2 and 3 were the Promoters of the Company holding 25% each of the paid up equity share capital of the Company with balance 50% held by other two Promoters viz. 'Dahairyasheel Gaikwad' and 'Sanjay Jadhav' in equal shares. Respondents No. 2 to 4 were the Directors and....
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....hat in fact he was defrauded as these events were never recorded by the Respondents in the record. The Petitioner further alleged that R-2 filed the balance sheet and annual return of the Company for the year ending 31st March, 2013 with ROC wherein the name of Petitioner was deliberately not reflected. However, this fact came to the notice of the Petitioner only in the year 2016 while making a search in the Ministry of Corporate Affairs website. Petitioner found that his majority stake was not reflected in the record for Financial Years 2012-13 and 2013-14 despite the fact that such statements and returns were prepared by R-2 to R-4 after the date of investments made by the Petitioner. It is further alleged that no notice of the Annual General Meeting was issued to Petitioner despite he being a majority shareholder. Instead a meeting was held on 30th September, 2014 without the knowledge of the Petitioner. The Petitioner alleged that the aforesaid acts of Respondents 2 to 4 not only amounted to fraud but also oppression of the Petitioner and mismanagement of affairs of Company on the part of Respondents 2 to 4. Petitioner also alleged many irregularities in running the affairs of ....
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....eceived back the entire consideration amount from Respondent No.4. It is further contended that the Respondents failure to file reply to the Company Petition was not on account of any lapse on their part but due to forfeiture of their right to file the reply by the Tribunal. It is contended that the Tribunal failed to address the material issues raised by the Respondents and erred in drawing conclusions which were not justified. 6. In his reply affidavit Petitioner has stated that several acts of oppression/ mismanagement by the Respondents detailed in the Company Petition form a part of continuous process of oppression and mismanagement continuing upto the date of filing of Company Petition, thus the Company Petition was within the period of limitation. It is further stated that the Petitioner paid Rs. 70 Lakhs to the Respondent No. 2 and 4 towards consideration of 25,500 equity shares purchased by the Petitioner representing 51% equity shares as acquired by him in the Company and resolution for transfer of such shares was passed by the Board of Directors of the Company in the meeting held on 4th February, 2013. It is further stated that the Respondent No. 2 to 4 handed over the ....
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....the grounds of appeal, stated that the Tribunal failed to deal with the issue of limitation raised in terms of Miscellaneous Application No. 236 of 2018 filed in the Company Petition. It is stated that since February, 2013 the Petitioner was aware that the Respondents 2 to 4 had not acted upon the allotment of shares and had not transferred the shares in the records of Company and hence the cause of action for filing the Company Petition arose in February, 2013, therefore, the Company Petition was barred by limitation. 8. It is contended on behalf of Appellants (Respondents 2 to 4 in Company Petition) that the Tribunal has failed and neglected to decide whether Company Petition No. 32 of 2016 was barred by limitation though M.A. No. 236 of 2018 was taken up for hearing alongwith Company Petition. It is further contended that the right to sue accrued to the Respondent No. 2 (Petitioner in the Company Petition) in February, 2013 and the period of limitation being three years, the Company Petition having been filed on 19th September, 2016 was barred by limitation. Learned counsel for Appellants submitted that the matter was required to be remanded back to the Tribunal to decide the C....
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....ue in the same amount were issued by Respondent No. 2 favouring the Petitioner with an understanding that the cheque would be encashed on or before 31st July, 2017. The cheque issued could not be encashed. Despite extending the deadline in lieu of costs, Respondent No. 2 failed to abide by the settlement and the right of Respondents to file reply was forfeited. Consequently, the allegations in the Company Petition regarding oppression and mismanagement remained uncontroverted and unrebutted. The facts asserted by the Petitioner and the allegations constituting oppression and mismanagement largely owe their genesis to the investment of Rs. 70 Lakhs by Petitioner which were paid to the Respondent No. 2 and 4 towards consideration of 25,500 equity shares purchased by the Petitioner representing 51% equity shares acquired by him in the Company. A resolution for transfer of such shares was passed by the Board of Directors of the Company in the meeting held on 4th February, 2013 approving the transfer of 25,500 equity shares of the Company at a price of Rs. 275 per share for a total amount of Rs. 70 Lakhs. Respondent No. 2 to 4 handed over the duly signed and endorsed equity share certif....
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....ing information was provided to the Registrar of Companies by filing false and fabricated statements. On facts no conclusion incompatible with the one arrived at by the Tribunal is possible. Keeping in view the aforesaid facts duly supported by record and not controverted by Respondents No. 2 to 4 it can safely be stated that while Respondents No. 2 to 4 derived pecuniary advantage by effecting the transaction of transfer of shareholding of majority stakes in the Company in favour of the Petitioner, they jeopardized his legal rights and exposed his legitimate interests to peril by not giving effect to the transaction, despite approval by Board of Directors, by indulging in acts of omission and commission in regard to statutory compliances and holding of Annual General Meetings causing grave prejudice to Petitioner who was kept in dark about the true state of affairs. Tables were turned on the Petitioner when he discovered from the record of Registrar of Companies somewhere in February, 2016 that the factum of transfer of shares in his favour had been suppressed by Respondents No. 2 to 4. In the given circumstances, no fault can be found with the finding that Respondents No. 2 to 4 ....
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....ppeal No. 4766 of 2001 titled 'Ramesh B Desai & Ors. Vs. Bipin Vadilal Mehta & Ors.' reported in (2006) 5 SCC 638 (para 19). It is not in dispute that in regard to matters falling within the purview of Section 241-242 of the Companies Act, 2013, the Limitation Act does not specifically provide for a period of limitation. In terms of Article 137, which is applicable to matters for which no period of limitation is specifically provided, the period of limitation is three years from the date when the right to apply accrues. Unless there is a continuing cause of action, the right to apply will have to be construed as having accrued when the first violation of right occurs or is discovered. Successive violation of right will not give rise to a fresh cause of action. In the instant case, the Appellants have not controverted the factum and validity of transfer of 25,500 equity shares of Company in favour of Respondent No. 2 (Petitioner) against consideration of Rs. 70 Lakhs when the relevant documents in regard to the transfer of shares were executed on 4th February, 2013 and the transfer of shares was approved by the Board of Directors in its meeting held on the same date. However, no not....