TMI Blog2019 (8) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... es from other parties - whether the petition before the Tribunal was barred by limitation? - HELD THAT:- While it cannot be disputed that the restrictions imposed upon Private Companies in regard to transfer of shares enjoins upon the Shareholder desirous of selling away his share to follow the procedure laid down in the Articles of Association of the Company, the issue of limitation affecting the very jurisdiction of the Tribunal has to be addressed irrespective of the fact that the same has been set up as a defense or not. It is well settled that a plea of limitation is a mixed question of law and fact. The case setup by the Appellants before the Tribunal clearly indicates that Appellant No. 1 had received a special notice on 23rd F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 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, had not followed due procedure as contained in Articles 34(b), 34(g) and 35 of the Articles of Association. 2. The short question for consideration in the instant appeal is whether the petition before the Tribunal was barred by limitation. 3. Before dwelling upon the issue raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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. In consequence of acquisition of these shares through transfer of shareholding impugned in the petition Respondent 1 to 10 belonging to Sharma Family collectively came to hold 19,031 equity shares constituting 79.28% holding of the total share capital of the Company making t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 behalf of the Respondents as a sequel to service of notice upon them and sought time to file reply affidavit along with vakalatnama. However, subsequently the Respondents failed to turn-up and contest the appeal though the matter was adjourned from time to time. Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 as having accrued when the first violation of right occurs or is discovered. Successive violation of right will not give rise to a fresh cause of action. In the instant case, the alleged acts of oppression attributed to Respondents pertain to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 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 properly followed. However, this deprivation of Appellants of participation in the affairs of the Company did not begin in 2014 when the Company Petition came to be filed. The breach of Articles resulting in such deprivation and prejudice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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