TaxTMI 
TaxTMI 
2019 (8) TMI 1003
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....n - the minority shareholders of Respondent No. 1 Company alleged acts of oppression and mismanagement against Respondent No. 2 and his family members in taking unilateral decisions to gain majority in shareholding of Respondent No. 1 Company and its Board of Directors. They filed Company Petition No. 5/397-398/CLB/MB/2014 under Section 397 and 398 of the Companies Act, 1956 challenging the acts of oppression and mismanagement of the present Respondents which came to be dismissed in terms of impugned order dated 5th July, 2018 passed by National Company Law Tribunal, Mumbai Bench (hereinafter referred to as the 'Tribunal') as being barred by limitation despite the Tribunal coming to a finding that the Respondents, while acquiring the shares....
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.... 2000. Respondent No. 6 was appointed as Director of Company on 23rd October, 2000. Respondent No. 6 acquired 500 equity shares from Shri Chhanabhai Shah on 16th September, 2000. Respondent No. 7 acquired 1250 equity shares from Shri Narayan Deosarkar in the year 2009 though it was alleged that the transferee had expired in the year 1996. Respondent No. 8 acquired 545 equity shares from Smt. Parvati Deosarkar in the year 2009 and she was appointed as Director of the Company on 16th November, 2009. Respondent No. 9 acquired 500 equity shares from Mr. Prakash Deosarkar. Respondent No. 10 acquired 300 equity shares from Mr. Nikhil Deosarkar in the year 2009. All transfers of shareholding were questioned in the petition heard by the Tribunal. I....
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..... The Appellants sought declaration in regard to all meetings of the Board of Directors and General Meeting of the Company held after 1996 and all business conducted thereafter as illegal, void and non-est besides declaring the transfer of shareholding in favour of members of Sharma Family as illegal and non-est. Respondents, in their reply, before the Tribunal pleaded that all legal formalities had been completed in effecting transfer of shareholding and appointment of Directors as also in regard to removal of Appellant No. 1 from the Directorship of the Company. Objections were raised to the maintainability of the petition with further plea that the same was barred by limitation. 4. Mr. Shakul R. Ghatole, Advocate initially appeared on b....
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....t. Reference in this regard may profitably be made to the judgment of Hon'ble Apex Court rendered on 11th July, 2006 in Civil Appeal 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 397-398 of the Companies Act, 1956, 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 a....
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.... property of Respondent No. 1 was put on sale in the year 2013. This argument is designed to stretch the cause of action qua alleged oppression and mismanagement by an attempt at demonstrating that there was a continuing cause of action. However, this argument is flawed in both technique as well as substance. Admittedly, the Appellants are minority shareholders who have been deprived of their right to participate in the affairs of the Company. The Tribunal has observed that there is certainly a merit in the case in favour of Appellants as the Respondents have not produced any document to prove their plea that whenever they acquired shares from other parties, procedure envisaged in the Articles of Association for purchase of shares was prope....