2015 (9) TMI 1253 - COMPANY LAW BOARD MUMBAI

Rectification in the Register of Members - period of limitation to challenge the genuineness of transfer of shares - The Share Certificates of the Company were issued in the name of the Trustees/Original Members, namely, the Petitioner, the Respondent No. 2, Mr. Shrikrishna Narhari Inamdar (SNI) and Mr. Dilip Ganesh Karnik (DGK) on behalf of the Trust.

Held that:- The Law of Limitation is founded on public policy. Its aim being to secure the quiet of community, to suppress fraud and perjury, to quicken diligence, and to prevent oppression. Its object is to give effect to the maxim, interest re-publicoe out sit finis littum-the interest of the state requires that there should be limit to litigation and to prevent disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or laches. The object of the statutes of limitations is to compel a person to exercise his right of action within a reasonable time as also to discourage and suppress stale, fake or fraudulent claims.

Keeping in view the aforesaid object and reason as to application of limitation, if it is held that the provisions of the Limitation Act do not apply in the relation to petition filed under Section 111(4) of the Act, in that case, it would imply that an aggrieved party may approach to the CLB even after several years. This cannot be a true intent of the law. As stated above, as a matter of a policy, the purpose of the limitation prescribed in law is to restrict the litigation on the ground of limitation so that the parties can approach the court of law within a reasonable time. Only in the cases, where there is a continuous wrong, the law of limitation become irrelevant.

In the present case, there is a definite date of cause of action and, therefore, it is expected that an aggrieved party should approach the court within the prescribed period of time with effect from the date of knowledge/cause of action.

The next question then arises as to what is the prescribed period in the instant case. - Held that:- I have already held that the Petitioner had knowledge of having signed the documents with respect to the impugned transfer of share. I am, therefore, not inclined to accept that the Petitioner came to know for the first time in 2011 with respect to the impugned transfer of shares. These documents were admittedly executed in the year 2007. Therefore, the period of limitation of 3 years would start from the date, on which these documents were signed. Undisputedly, the petition came to be filed after expiry of 3 years. I, therefore, hold that the petition is barred by limitation and, therefore, deserves to be dismissed on this ground.

Assuming for the sake of arguments, that the provision of the Limitation Act, do not apply to the petition filed under Section 111(4) of the Act, it Is amply clear from the facts and circumstances of this case, that the petition suffers from acute delay and laches. Time and again, it has been held that if a petition suffers from unexplained delay and laches, the petition may be dismissed on this ground also. This point is answered accordingly.

Whether the transaction if void ab intio - Held that:- the petitioner has not approached the CLB with clean hands and, therefore, she is not entitled to the reliefs sought for and the petition deserves to be dismissed

Decided against the petitioner.