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Esquire Electronics Versus Netherlands India Communications Enterprises Ltd.

2016 (10) TMI 1107 - NATIONAL COMPANY LAW TRIBUNAL

Allegations of oppression and mismanagement - Petitioners locus standi to file a petition - period of limitation - Held that:- The cause of action, if any, arose to the petitioners on 30.9.2012 and the instant petition having been filed on 25.7.2016 is clearly beyond the period of three years provided by Article 113of the Limitation Act as noticed above. We suggested to the learned counsel that the petition is liable to be dismissed on that count. - A perusal of e-mail dated 3.6.2014, 20.7.2 .....

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edgement in terms of Sec. 18 of the Limitation Act, either before the expiry of the period of three years which commenced from 30.9.2012 and expired on 29.9.2015 or thereafter. Moreover, acknowledgment has to be made to those who have some interest in Respondent No. 1 company. The petitioners have never been director or shareholder in Respondent No. 1 company. The question of acknowledgment does not even arise. There is a serious doubt whether the petitioners have any locus standi to file such a .....

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vigilant about their rights. For measuring the extent of vigilance, the legislature has provided period of limitation under the Limitation Act, 1963 (for brevity, 'Limitation Act.'). The Limitation Act incorporated by reference and has been applied to matters concerning companies by Section 433 of the Companies Act, 2013 (for brevity, '2013 Act'). It is pertinent to first notice Section 433 of 2013 Act which reads as follows: "433 - The provisions of the Limitation Act, 196 .....

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share capital with the allegations against the respondents of grabbing majority shareholding unfairly as an act of oppression. It appears that there is no specific provision made either in the substantive section of the Limitation Act or in the Articles as per the Schedule. A close scanning of the schedule, however, reveals that Articles 1-112 deal with various types of suits viz., suits relating to accounts where period of limitation is three years, suits relating to contracts where again the .....

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the matters concerning illegal removal or induction of directors has not been specifically dealt with in any of the articles. It also becomes obvious that no period of limitation has been provided for illegal reduction of shareholding with malafide intention to acquire majority shareholding. In these circumstances, the question is which provision of the Limitation Act would apply. The answer is found in Article 113 which deals with the subject of suits for which there is no prescribed period of .....

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cases, the period of limitation provided is three years from the date when the right to sue accrues. 5. It is equally well settled that when the adjudication results in passing of a decree by a Court or Tribunal, then it is preceded by filing of suits. Every suit is commenced by filing of a plaint. Honourable the Supreme Court, in the case of Manish Mohan Sharma v. Ram Bahadur Thakur Ltd. AIR 2006 SC 1690 held that Section 634A of the Companies Act, 1956, read with Sections 397 & 398 indicat .....

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application u/s. 634A of the 1956 Act and sits as an executing court, then it is subject to all the limitations to which a Court executing a decree is subject. 6. The aforesaid view is based on the provisions of Companies Act, 1956 and the position of the present Tribunal is far superior than the erstwhile Company Law Board in the matter concerning implementation of orders passed by the Tribunal. Section 424 of 2013 Act classifies the nature of proceedings before the Tribunal and provides as un .....

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late their own procedure. (2) The Tribunal land the Appellate Tribunal shall have for the purpose of discharging their functions under this Act [or under the Insolvency and Bankruptcy Code, 2016], the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:- (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of document .....

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her matter which may be prescribed. (3) Any order made by the Tribunal or the Appellate Tribunal may be enforced by that Tribunal in the same manner as if it were a decree made by a court in a suit pending therein, and it shall be lawful for the Tribunal or the Appellate Tribunal to send for execution of its orders to the court within the local limits of whose jurisdiction,- (a) in the case of an order against a company, the registered office of the company is situated; or (b) in the case of an .....

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l Procedure. 1973 (2 of 1974)." 7. A perusal of the aforesaid provisions would reveal beyond any doubt that the Tribunal is not bound by the procedure laid down by the Code of Civil Procedure. For the purposes of discharging their functions under 2013 Act or under the Insolvency/Bankruptcy Code, it is vested with the same powers as are vested in a Civil Court under the Code of Civil Procedure while trying a suit in respect of the matter specified in items 2(a) to 2(h). Sub-section 3 makes i .....

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. Another feature in this regard is revealed by Sec. 425 of 2013 Act. The Tribunal has been vested with the same jurisdiction, powers and authority in respect of its contempt as the High Court has and it may exercise for this purpose all the powers under the provisions of Contempt of Courts Act 1971. Therefore, it becomes evident that the orders passed by the Tribunal are executable as decree of the Court and in case of any violation of its orders, Sec. 425 vests the Tribunal with the power of i .....

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d be three years from the date the right to sue accrues. 9. It is also pertinent to mention that the provision of Sec. 5 of the Limitation Act would not apply to proceedings before the Tribunal as it is the original Court of jurisdiction and the petition filed before it u/s. 241 and 242 of the 2013 Act are in the nature of suits. The adjudication by the Tribunal would result in passing of a decree which is executable by virtue of the provisions made in Sections 424 & 425 of 2013 Act. 10. The .....

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ble Supreme Court in the case of Sampuran Singh v. Niranjan Kaur AIR 1999 SC 1047. 11. We have prefaced this order with various principles of law, equity and justice for the reason that the facts presented before us in the present petition are required to be examined in the light of the aforesaid principles. 12. It would be first profitable to closely examine the reliefs claimed by the petitioner which are evident from the perusal of para 8 of the petition filed in July 2016. The petitioner has .....

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ons passed by Respondent No. 1 company allotting shares to various shareholders between 2000 and 2012 be declared as null and void. As a consequential relief, the names of such allottees be deleted from the register of Respondent No. 1 company by rectifying the same. 13. On a close scrutiny of the averments made in the body of the petition filed u/s. 241 & 242 of 2013 Act, it is revealed that Respondent No. 6 company was incorporated in the year 1995 and Respondent Nos. 2 & 3 were its in .....

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o subscribe to the shares of Respondent No. 6 company in the same proportion as agreed in the joint venture agreement. The idea of incorporating NICE Telecom Ltd. was dropped. Consequently, the petitioner subscribed to the shares of Respondent No. 6 company which was followed by the other partners of joint venture agreement like LG Information and Communications Ltd. and NARAY Mobile Telecom Inc. of South Korea. One Shri G.S. Saluja was appointed as nominee of petitioner No. 1 on the Board of Di .....

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pointment of G.S. Saluja and S.S. Lamba as directors (P-10). 14. It is also important to notice that as per the allegations of the petitioners, Respondent No. 1 company was secretly incorporated in the year 1996 and the petitioners have claimed that they had no knowledge of its incorporation (see para 6, Facts of the Case, sub-para xxxv). Respondent No. 1 was granted paging licenses by Ministry of Telecommunications, Government of India and Respondent No. 1 had an arbitrational claim dispute in .....

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so alleged that Respondent No. 1 company has failed to file audited balance sheet since the year 2003 till date and no AGM has been ever convened after 2012. Even prior to 2012, as per record available with the Registrar, no AGM was conducted for the year 2002 till 2010. Disclosing the particulars of Respondent No. 1 company, it has been stated in para 1(b) that the registered office of the company is at A-18, Shivalik, New Delhi-110017. It has further been stated that the aforesaid premises wer .....

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ilings prior to 2012 are incomplete. The last AGM was held in September 2012 which was illegal. 16. There are allegations of oppression and mismanagement against Respondent Nos. 2 & 3, with further allegations of siphoning of funds in the name of fictitious creditors of the company. A reference has been made to an illegal AGM held on 30.8.2010. Likewise, instances have been given of appointment of one Adardeep Apparels (P) Ltd. as a Consultant on 07.08.2009. 17. The petitioners have also dis .....

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Respondent No. 1 company except the one in hand for the first time. 18. A perusal of Annexure P-3 (Form 20B) shows that the last AGM of Respondent No. 1 company was held on 29.9.2012 and there is no mention of names of either petitioner No. 1 or petitioner No. 2. Likewise, a copy of the Annual Return again would show that the petitioners were neither directors nor shareholders in Respondent No. 1 company. 19. In the facts and circumstances set out in the paragraphs above, we asked the learned co .....

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ount. 20. Mr. Uttam Datt, learned counsel for the petitioner, however, made an endeavour to point out that there are numerous e-mails which have been placed on record (P-8) from 21.8.2013 to 02.10.2015 which reveal acknowledgement on the part of Respondent Nos. 2 & 3 conceding the claim of the petitioners to remove Respondent Nos. 2 to 5 as directors and have reconstitution of the Board without them. Learned counsel also claims that acknowledgement has also been made with regard to illegal a .....

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st made by one Subodh. The other email also did not reflect on any acknowledgment nor any such email could be pointed out by the petitioner. We deem it appropriate to make a reference to the email of December 2014 and 2015 which talks of grant of amnesty and filing of the Company Petition. There is no mention of any acknowledgement in terms of Sec. 18 of the Limitation Act, either before the expiry of the period of three years which commenced from 30.9.2012 and expired on 29.9.2015 or thereafter .....

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