TMI Blog2016 (12) TMI 1604X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent No. 3 Late Mr. Francis Wacziarg who is no more. It is not understood as to how the allotment could be effectively defended by his daughter who is impleaded as Respondent No. 3. The intervention of third party right is also a relevant factor for us to conclude that the petitioner had disentitled himself to claim any relief under the equitable jurisdiction, particularly, when the Tribunal has been assigned the role and status as that of the High Court (see the observation made in the case of Union of India v. R. Gandhi, President, Madras Bar Association (2010 (5) TMI 393 - SUPREME COURT OF INDIA). We are also not impressed with the submission that the decline in payment of dividend on 22.03.2013 furnished the petitioner knowledge of its reduced share capital and clothed it with a cause of action because in the year 2006, 2009 and 2010 no dividend were paid. Again in the year 2012 the Respondent No. 1-company did not announce any dividend. If any foul play was to be apprehended then the petitioner should have set in motion the machinery of ventilating its grievances during those years. Moreover, the petitioner is not a member of gullible public but is a private limited com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidends' 6.36 to 6.41. The fundamental issue raised by Mr. K. Datta learned counsel for the applicant-respondents is that a perusal of the aforesaid paras of the company petition would show that authorized capital of Respondent No. 1-company is stated to have been increased allegedly with a mala fide intention on 20.12.2006 by holding EOGM. The allegations are that the EOGM was held without giving prior notice to the non applicant-petitioner. Likewise the authorized share capital was further increased on 01.12.2007 in another EOGM held on 01.12.2007 without giving prior notice to the non applicant-petitioner. There are further allegations that on 21.02.2008, 10.01.2011, 24.03.2011, 25.05.2011 and 10.08.2011 as a result of increase in the authorized and paid up capital the shareholding of the petitioner allegedly has been reduced to a negligible sum 2.08% whereas petitioner use to hold 21.40%. The aforesaid averments have been made to substantiate the allegation of oppression and mismanagement from paras 6.13 to 6.21, illegal unlawful allotment of 35200 shares in favour of Respondent No. 2 and also allotment of 25000 to late Mr. Francis Wacziarg. In paras 6.22 to 6.28 it has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative pronouncement of Hon'ble Supreme Court in the case of State of Madhya Pradesh v. Bhailal Bhai Ors, AIR 1964 SC 1006 and MTNL v. State of Maharashtra and Anrs. 2013 (9) SCC 92. Learned counsel has also placed reliance to substantiate his submission that even period of three years is not sine quo non and if there is undue and unexplained delay and laches for less than three years the petition must be dismissed because 3rd party right tend to intervene. 4. Mr. Abhinav Vasisht learned senior counsel appearing for the non applicant-petitioner has vehemently argued that it is not a case where the petitioner do not qualify the test of section 397 of the Companies Act, 1956. Learned counsel has made a reference to the table in the company petition showing the payment of dividends and has argued what used to be paid as dividend in 2011 was drastically reduced on 22.3.2013 i.e. from ₹ 6,12,000/- it came down to ₹ 1,78,500/-. This drastic reduction in dividend led to a reasonable suspicion and foul play in the affairs of Respondent No. 1-company. The Petitioner through his representative contacted Respondent No. 2 to ascertain the drastic downfall in the payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er fulfill the test of 10% shareholding in accordance with the provisions of Section 399 as the petitioner qualifies alternative test of 10% of the shareholder. 6. Having heard the learned counsel and perusing averments made in the various paragraphs of the company petition we are confronted with the issue 'whether this petition warrants hearing and adjudication on merit or it is liable to be dismissed on the threshold on account of delay and laches'. In that regard we may first read various paragraphs of the petition to know as to when the cause of action has arisen. It is pertinent to mention that the Respondent No. 1-company was incorporated on 02.04.1981 when its authorized share capital was ₹ 3,00,000/- (Rs. Three lakhs) and the paid up capital was ₹ 1,00,000/- (Rs. one lakh). The Petitioner itself is a Private limited company and had share capital of 20.40% as on 29.06.2006. The grievance made by the petitioner company is that the authorized share capital of Respondent No. 1-company has been increased in such a manner from 2006 to 2011 that its shareholding has been reduced to abject low at 2.80%. 7. The allegation of the petitioner is that firstly t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... %. Late Mr. Francis Wacziarg was again allotted 35000 shares and similar number of share were allotted to Mr. Aman Nath-Respondent No. 2. As per the allegations all this was done at the back of the petitioner. Similar instances have been given which are stated to have taken place on 10.08.2011 and 24.03.2011. 10. It has then been stated in para 6.37 that there was drastic downfall in the rate of dividend declared by the Respondent No. 1-company. According to the averments made in para 6.37 presented through the assistance of a table, the petitioner has sought to project that he became suspicious when the amount of dividend paid to him was drastically reduced as compared to the previous years. In June 2005 a sum of ₹ 6,12,000/- as dividend was paid, whereas no dividend was paid in the year 2006. In April 2007 and February 2008 similar amount of dividend were paid. Again for 2009 and 2010 no dividend was paid. On 24.08.2011 a sum of ₹ 6,12,000/- as dividend was paid and no dividend was paid in the year 2012. The Petitioner asserts that when dividend of ₹ 1,78,500/- were paid on 22.03.2013 the petitioner got suspicion and apprehended some foul play in the affairs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applying those standard. Where the delay is more than the period prescribed by the Limitation Act, then it would be appropriate for the Court to hold that it is unreasonable. In that regard, reliance may be placed on 7-Judge judgment rendered in the case of State of Madhya Pradesh v. Bhailal Bhai Ors. AIR 1964 SC 1006. The aforesaid view has been repeatedly followed and applied by Hon'ble the Supreme Court. In a recent judgment rendered in the case of MTNL v. State of Maharashtra and Anr 2013 (9) SCC 92 placing reliance on the judgment rendered in the case of Bhailal Bhai (Supra), Hon'ble The Supreme Court observed that in equitable jurisdiction, the maximum period of limitation can reasonably held to be the same as has been provided by the Limitation Act. Where a person comes to the Court for relief under Article 226, then as a general rule, if there has been unreasonable delay, the Court ought not ordinarily to lend its aid to a party guilty of delay. Hon'ble the Supreme Court proceeded to cite para 21 of the judgment in Bhailal Bhal's case (Supra) wherein it is observed that maximum period fixed by legislature providing for the time within which the relief by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 is sought to be challenged alongwith the allotment made of those shares in the year 2008 and 2011. Such belated challenge cannot be gone into as third party rights have come into existence. Late Mr. Francis Wacziarg has died and his daughter has been impleaded as Respondent No. 3 who would not be able to defend the challenge at this belated stage. She would suffer apparent prejudice. Even other would occasion prejudice on account of lapse of time. We are also not impressed with the submission that the decline in payment of dividend on 22.03.2013 furnished the petitioner knowledge of its reduced share capital and clothed it with a cause of action because in the year 2006, 2009 and 2010 no dividend were paid. Again in the year 2012 the Respondent No. 1-company did not announce any dividend. If any foul play was to be apprehended then the petitioner should have set in motion the machinery of ventilating its grievances during those years. Moreover, the petitioner is not a member of gullible public but is a private limited company which is ordinarily assisted by competent professionals like company secretaries and chartered accountants. Therefore it is not believable that they had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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