TMI Blog2020 (10) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... s transferred 1,80,000 shares out of the 3,00,000 shares in favour of the 2nd and 3rd Respondents and has also received the consideration in relation to the same. However, now in the present petition, the petitioner claims that he still holds 3,00,000 shares in the 1st Respondent Company, which is more than the shares held by the 2nd and 3rd Respondent. Thus, the petitioner has suppressed the materials facts before this Tribunal and has not come with clean hands. Time Limitation - HELD THAT:- The cause of action for the petitioner to file this petition arose on the day on which he alleged to have been tricked by the Respondents to resign as a Director of the 1st Respondent Company i.e. on 17.11.2012. Admittedly, the petitioner has filed the present petition before this Tribunal on 30.11.2017, which is almost after a lapse of 5 years. Section 433 of the Companies Act, 2013 contemplates that 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 - the present Petition can also be construed as an application as defined under the Limitation Act, 1963. Thus, irrespective o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said sum will be put to good use for the benefit of the Company. 4. It is further averred in the petition that due to the continuous instigation of the 2nd and 3rd Respondent, the petitioner persuaded one Ms. Ayesha Fahath to invest ₹ 60,00,000/- and one Mrs. Fouziya to invest ₹ 20,00,000/- in the 1st Respondent Company and for the said sum, the Petitioner stood as a guarantor and offered his property situated at Karanthoor, Kunamangalam, Kozhikode having an extent of 12.857 ares as security under Sale Deed No. 2568 of 2011 and another property situated in Survey No. 96/1 and 88/1 of Chokli Taluk to the extent of 1.36 ares under Sale Deed No. 1578 of 2011 in favour of the above mentioned persons who jointly invested in the 1st Respondent Company. 5. It is averred in the petition that apart from the above mentioned investment, the petitioner has personally invested a sum of ₹ 1.5 Crore in the 1st Respondent Company on a promise of a Director that he would be included as a Director in the 1st Respondent Company and it is alleged that the 2nd and 3rd Respondent have not kept their promises and they have allotted 3,00,000/- equity shares of face value 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner with an intention to cheat him. 8. It is further averred in the petition that the petitioner had issued a number of written communication to the 2nd and 3rd Respondents but all his efforts turned futile and as on date the 2nd and 3rd Respondent have not complied the Memorandum of Agreement dated 04.07.2012. Further, it is averred that by concealing material facts and on misrepresentation the 2nd and 3rd Respondents had obtained resignation from the petitioner from M/s. Aleph Entertainment Pvt. Ltd. on 17.11.2012 and submitted the same before the Registrar of Companies under Form 32 of Companies Act, 2013. 9. It is averred in the petition that the petitioner as on date holds 3,00,000/- equity shares in the 1st Respondent Company having the value of ₹ 10/- each and he is the major shareholder of the lstRespondent Company, however the 2nd and 3rd Respondent are holding the Directorship in the 1st Respondent Company and further they have diverted the capital investment of the 1st Respondent Company to another Company viz. M/s. Aleph Entertainment Pvt. Ltd. with an intention to make the 1st Respondent Company as a loss making Company and thereby to deprive the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent once in fortnight and he had other business in the Middle East countries and therefore he was unable to contribute towards the 1st Respondent Company. d. The Respondent admitted that it is true the certain people have pooled in money to the 1st Respondent Company and the details of whom are as follows; i. Mrs. K.P. Fousy; ₹ 60,00,000/- ii. Mrs. Ayasha Farhat; ₹ 25,00,000/- iii. Mr. Shahadab; ₹ 50,00,000/- iv. Mr. Ummer Hajee (Petitioner); ₹ 25,00,000/- It is also stated that the above mentioned lenders were known contact of both the petitioner as well as 2nd and 3rd Respondent and the funds were infused by the respective lenders directly into the 1st Respondent Company and the petitioner was neither a guarantor nor the funds came through his account. It is also stated that the above sum of ₹ 25,00,000/- availed from the petitioner has already been repaid in full. e. It is stated that when the 1st Respondent Company was in need of funds to cater to the working capital requirements, the petitioner voluntarily offered to give one of his personal properties as security to the lending bankers and the loan was also san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further, it is stated that the Respondents during the tenure of the petitioner as a Director of the 1st Respondent Company has paid a sum of ₹ 12,45,000/- in spite of his not having any significant role in the 1st Respondent Company. i. It is stated that the Respondents had several negotiations through various common parties known to both the petitioner and the Respondent and finally a consensus was arrived between them and a Memorandum of Understanding (MoU) dated 04.07.2012 and a Share Purchase Agreement (SPA) dated 04.07.2012 was entered into between the Petitioner and the Respondents. j. It is stated that the MoU inter alia mentions that the total amount to be repaid by the 1st Respondent Company is ₹ 60,00,000/- and the same has been obtained from the relative of the petitioner and the schedule for repayment is also recorded under this MoU. Further, as per the terms of the MoU certain amount which was owed to the petitioner had already been settled and the other loan amounts are in no way related to the petitioner and the same was not even routed through his accounts. k. It is stated that as per the terms of the SPA, the petitioner was to sell 1,80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to the same and based on the mutual agreement the 3rd Respondent handed over a DD to the petitioner for an amount of ₹ 3,33,000/- to the petitioner and the same was utilized by the petitioner but he did not sign the share transfer form as agreed in relation to the transfer of 33,000 shares held by him inspite of several reminders from the 3rd Respondent and his representatives. n. It is stated that the 1st Respondent Company has already repaid the amount that it owed to the Petitioner and certain others, however certain dues are pending to be paid to which the petitioner is no where connected and the details regarding the loans availed and paid and that are still pending are as under; Name Amount Borrowed Amount Repaid Balance, if any Aysha Farahat 25,00,000 5,60,000 19,40,000 Petitioner 25,00,000 25,00,000 Nil Shahadab 50,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent Company. In fact, whether the allegations as averred by the Petitioner in the petition would constitute oppression or mismanagement is to be examined in light of the Judgment of the Hon'ble High Court of Madras in S. Seetharaman and Others -Vs- Stick Fast Chemicals Pvt. Ltd. (1998) 93 CompCas 507 Mad, at Page 525 wherein it is held as follows; The point for consideration is whether all these acts and incidents would amount to oppression and mismanagement as contemplated under sections 397 and 398 of the Companies Act, 1956. In a petition filed under section 397 of the Companies Act, the petition should contain all material facts. In case of fraud, mismanagement oppressive conduct, etc., full and complete particulars must be alleged in the petition. Subsequent affidavits are not enough. The petitioner must plead all material facts necessary for granting the relief as prayed for. Facts arising subsequent to the filing of the petition cannot be relied upon. The validity of the petition will be judged on the facts alleged therein and existing at the time of its presentation. Lack of essential allegations in a petition cannot be made up by leading evidence. Oppressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending legal proceedings should not be adjudicated in summary proceedings as envisaged by the section. If an action of the director is illegal or invalid or unlawful the shareholder may take appropriate action in a court of law challenging the validity of such action, but a petition under section 397 or 398 is not an appropriate remedy for that purpose (see Hungerford Investment Trust Ltd. v. Turner Morrision and Co. Ltd. [1972] ILR 1 Cal 286). 17. It is evident from the records that the petitioner has acted in pursuance of the Share purchase agreement entered into between the parties on 04.07.2012 and has transferred 1,80,000 shares out of the 3,00,000 shares in favour of the 2nd and 3rd Respondents and has also received the consideration in relation to the same. However, now in the present petition, the petitioner claims that he still holds 3,00,000 shares in the 1st Respondent Company, which is more than the shares held by the 2nd and 3rd Respondent. Thus, the petitioner has suppressed the materials facts before this Tribunal and has not come with clean hands and in this connection, it is relevant to refer to the judgment of the Apex Court in the matter of Ramjas Foundation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly upheld by the Hon'ble NCLAT in Appeal in Praveen Shankaralayam -Vs- M/s. Elan Professional Appliances Pvt. Ltd. Others in Company Appeal (AT) No. 34 of 2016. 19. Even otherwise going by recent decision of the Hon'ble Supreme Court in the matter of B.K. Educational Services Private Limited -Vs- Parag Gupta Associates, wherein the Hon'ble Supreme Court had an occasion to consider the applicability of Section 433 of the Companies Act, 2013 to this Tribunal as well as the Appellant Tribunal had succinctly held as follows; 25 ................. Section 433 of the Companies Act, which applies to the Tribunal and the Appellate Tribunal, expressly applies the Limitation Act to the Appellate Tribunal, the NCLAT, as well. Also, the argument that the NCLAT is an appellate tribunal which is common to three statutes, under one of which, viz., the Competition Act, no period of limitation has been prescribed, would not lead to any anomalous situation. When the Appellate Tribunal, i.e., the NCLAT decides an appeal under the Competition Act, since an appeal is a continuation of the application filed before the Competition Commission (See Lachmeshwar Prasad Shukul and Ors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under the Limitation Act, 1963. Thus, irrespective of whether a petition under Section 241 of the Companies Act, 2013 falls under Article 137 or under Article 113 of the Limitation Act, 1963, the time period specified is three years when the right to sue / right to apply accrues, as the case may be. 22. Thus, after conscientious examination of the documents filed by the respective parties, we are of the considered view that the petition filed by the petitioner is prima facie barred by limitation. Further, as already discussed supra, even on merits, the petitioner has failed to make out a case of oppression and mismanagement into the affairs of the 1st Respondent Company and the petitioner has only made sweeping allegations as against the Respondents and failed to corroborate the same with relevant material document. Also, the petitioner has suppressed vital material facts before this Tribunal by stating false facts in relation to the transfer of shares as effected between the parties and claiming to be a holder of shares in an exaggerated manner knowing it to be not correct, contrary to the oft quoted dictum that a person who invokes equity must come with clean hands. For all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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