TMI Blog2016 (10) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of the Company Petition. The question of oppression and mismanagement and maintainability in the present case is a mixed question of facts and law. As the petition was filed on the ground that the shareholding of the applicant(s) has been brought down below 1/10th of the total shareholding of a Company by oppression and mismanagement, Tribunal was required to decide the question of maintainability at the time Of final hearing of the Petition. Both the merit and question of maintainability were required to be decided together. On hearing the parties, in case the Tribunal forms opinion that there was no oppression and mismanagement on the date of cause of action as alleged by the applicant then in such case it was open to the Tribunal to dismiss the petition as not maintainable in view of Section 399 of the Companies Act 1956. - Company Appeal (AT) No. 17 of 2016, C.A.No. 331 of 2015 in C.P.No. 41 of 2016). - - - Dated:- 6-10-2016 - Sudhansu Jyoti Mukhopadhaya.J. Mr. Akhilesh Kumar Srivastava with Ms. Manjulika Pal, Advocates for the Appellants. Ms. Suhita Mukhopadhay, PCS Mr. Ratnanico Banerji, Senior Advocate with Mr. Patita Paban Bishwal an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back the amount to the appellants on 18th May 2015 by RTGS without transferring any shares. 5. Subsequently to redress the grievance, the respondents agreed to allot additional shares and the appellants were asked to deposit ₹ 20 Iacs which they deposited in favour of the 1st respondent Company. However, against such amount only 1,33,000 shares were allotted and ₹ 6,70,000/- was returned back again to the appellants by the 1st respondent Company. It is alleged that in between 2014 and 2015, further allotment of shares worth Rs. 5.41 Crores were illegally made to outsiders and others without notice and knowledge of the appellants. 6. On 21st March 2016 by SMS message the respondents convened Board Meeting on 22nd March 2016 which was objected by the 1 st Appellant by return SMS text message on the same day. On 1st April 2016, the Board's Meeting was held by sending a Notice by an email dated 22nd March 2016 for appointment of an Additional Director when the 1st appellant was out of India between 28th March 2016 and 3rd April 2016. 7. On 4th April 2016 a Notice of EOGM through shareholders holding only 50,000 shares which is less than even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellants being less than 10% i.e. 3% the Petition under Section 397 and 398 of the Companies Act 1956 was not maintainable. 13. The stand taken by the respondents was accepted by the Tribunal which observed that the 1 st appellant-Anup Kumar Aggarwal was holding only 3, 10,000 shares, which is 2.07% of the total shareholding and 2nd appellant- Payal Aggarwal was hold only shares which is equivalent to 0.93% of the total shareholding i.e. total 3% of the shareholding on the date of filing of the petition. Referring to the provisions of Section 399(1) of the Companies Act 1956 and the decision of the Supreme Court in 'Bhagwati Developers Private Limited Vs. Peerless General Finance Investment Company Limited', (2013) 5 SCC Page 455, the Tribunal held that the Company Petition under Section 397 and 398 of the Companies Act, 1956 was not maintainable. 14. Similar plea has been taken by the parties before this Appellate Tribunal. According to the counsel for the Appellants, the Company Petition was filed in April 2016 against the first cause of action which had taken place on 11th February 2014 which came to their notice on 30th April 2014. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... going to decide the question whether there was any oppression and mismanagement on the part of the respondents in bringing down the share of the appellants below 1/10th of the total shareholding of the company as no such issue has been decided by the Tribunal. 20. While we observe that there was no delay on the part of the appellants in preferring the appeal we only observe that the petition was also not barred by limitation. 21. Section 433 of the Companies Act 2013 reads as follows: - 433. The provisions of the Limitation Act, 1963 shall, as far as may be, apply to proceedings or appeals before the Tribunal or the Appellate Tribunal, as the case may be . A perusal of the aforesaid provisions makes it clear that the Limitation Act 1963 would apply to the proceedings or appeal before the Tribunal or the Appellate Tribunal. In the Limitation Act 1963 in most of the cases, the period of limitation is three years except suit for possession of hereditary offices etc. where the period of limitation is 12 years and in Article 111 and 112, where the period prescribed is 30 years. The Article 113 of the Limitation Act 1963 deals with subject of the suits f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while dealing with a case under Section 397 of the 1956 Act and Section 153 C of the Companies Act, 1913, which were analogous to the provisions of Section 397 of the 1956 Act held that the issue of whether the petitioner had obtained consent of the members of the company in order to meet the requirements of holding 1/10th of the total shares is to be examined in light of whether such a number was in fact attained and maintained on the actual date of presentation of the company petition in court and in the event that a member later withdraws consent, the same would not affect either the right of the petitioner-applicant to proceed with the application, or the jurisdiction of the court to dispose of it on merits. 26. 'Bhagwati Developers Private Limited' was a case relating to winding up. The Supreme Court was considering the requirement of application(s) to apply for winding up of a company and the crucial date when the applicants were required to satisfy the requirements under Section 399 of the Companies Act 1956. In the said case the Supreme Court while held that it is not necessary that the applicant(s) must hold the same individually, but such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of evidence on record. 30. In the present case, the Tribunal failed to apply the aforesaid principle and erred in holding that the Company Petition preferred by the appellants under Section 397 and 398 of the Companies Act 1956 was not maintainable on the date of presentation of the Company Petition. 31. The question of oppression and mismanagement and maintainability in the present case is a mixed question of facts and law. As the petition was filed on the ground that the shareholding of the applicant(s) has been brought down below 1/10 th of the total shareholding of a Company by oppression and mismanagement, Tribunal was required to decide the question of maintainability at the time Of final hearing of the Petition. Both the merit and question of maintainability were required to be decided together. On hearing the parties, in case the Tribunal forms opinion that there was no oppression and mismanagement on the date of cause of action as alleged by the applicant then in such case it was open to the Tribunal to dismiss the petition as not maintainable in view of Section 399 of the Companies Act 1956. 33. For the reasons aforesaid, we set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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