Supreme Court - Daily Orders
M.C. Davar Holdings Private Limited vs Aurosagar Estates Private Limited on 5 December, 2017
Bench: Rohinton Fali Nariman, Navin Sinha
1
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 14940 OF 2017
M.C. DAVAR HOLDINGS PRIVATE LIMITED APPELLANT(S)
VERSUS
AUROSAGAR ESTATES PRIVATE LIMITED & ORS. RESPONDENT(S)
O R D E R
The present appeal arises from judgment dated 21st July, 2017 in which the National Company Law Appellate Tribunal (hereinafter referred to as 'NCLAT') has allowed an appeal filed by the respondents herein and disallowed the prayer for amendment made by the appellant. Necessary brief facts in order to decide the aforesaid controversy are as follows:-
on 2nd August, 2016, the appellant preferred a Company Petition under Section 241 and 242 of the Companies Act, 2013 (hereinafter referred to as 'the Act') before the National Company Law Tribunal (hereinafter referred to as 'NCLT') in which it alleged various acts of oppression and mismanagement. Some of the acts that have been alleged Signature Not Verified relate to the non-payment of annual lease premium to Digitally signed by SWETA DHYANI Date: 2017.12.13 13:04:14 IST Reason: Millenium Estates, being according to the appellant failure of the management of respondent No.1 to perform their obligations under the Lease Deed with Millenium Estates. 2 Other acts relate to the two directors – Ashit Patel and Hiral Patel who gave their consent to be appointed as Directors in respondent No.1 on 31st July, 2013, which consent, according to the appellant, has been rendered infructuous for want of confirmation. Also, conflict of interest of Mahesh Shah and Balchandra Shah prejudices their decision making and impairs their fairness towards the discharge of directorial functions in respondent No.1.
An Affidavit in reply was filed by the respondents herein dated 19th September, 2016 in which a reference was made to certain amended Articles which were done by amendments passed in Resolutions of the respondent No.1 in the years 2008 and 2012. This led to the present amendment application filed by the appellant dated 4th October, 2016 in which the amendment made in 2012, according to the appellant, have, by deleting various Articles, removed the appellant's representatives from the Board of Directors of the Company. This was stated to be an additional instance of oppression in sinc with the facts stated in the original petition. Importantly, the appellant alleged that the company was not aware of the 2012 amendment made, having become aware only because this amendment was referred to in the affidavit in reply filed to the main petition.
To this amendment application, an affidavit in reply dated 17th October, 2016 was filed by the respondents in which it is stated, interalia, that the amendments made 3 in 2008 and 2012 were made with the full knowledge and awareness of the appellant.
By an order dated 10th March, 2017, NCLT after referring the various provisions of the Acts and Rules and the Code of Civil Procedure, 1908 allowed the amendment. It did so referring to the provisions of the Limitation Act, 1963 without clearly stating that this would be subject to the result of the oral and documentary evidence which would ultimately be given in the Company petition in order to decide whether such amendment would be within the period of limitation.
By the order of the NCLAT impugned in the present petition, the NCLT's order was set aside. The NCLAT found that the amendment sought was with regard to a fresh cause of action which took place more than three years before, namely on 15th December, 2012, and since this would be barred by limitation, the Tribunal was not competent to allow the amendment. In doing so, the NCLAT also referred to Rule 155 of the NCLT Rules and Section 422 of the Act stating that the period of 30 days given by Rule 155 was sacrosanct inasmuch as the main petition itself had to be decided under Section 422 of the Act within a period of three months.
Having heard learned counsel for the parties, we are of the view that the NCLAT's order is not correct. First and foremost, it is important to extract Rules 153 and 155 of the NCLT Rules which are set out herein-below:- 4
“153. Enlargement of time.- Where any period is fixed by or under these rules, or granted by the Tribunal for the doing of any act, or filing of any document or representation, the Tribunal may, in its discretion from time to time in the interest of justice and for reasons to be recorded, enlarge such period, even though the period fixed by or under these rules or granted by the Tribunal may have expired.
….....
155. General power to amend.- The Tribunal may, within a period of thirty days from the date of completion of pleadings, and on such terms as to costs or otherwise, as it may think fit, amend any defect or error in any proceeding before it; and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on such proceeding.” It is clear on a reading of the aforesaid Rules that the period of 30 days from the date of completion of pleadings is not sacrosanct inasmuch as under Rule 153, the Tribunal may, in its discretion, in the interests of justice and for reasons to be recorded, enlarge such period even though the period fixed has expired. Of course, this has to be done keeping in mind the time period fixed by Section 422 of the Act.
Also, we make it clear that the period of 30 days only begins on the date of completion of “pleadings” which would encompass the company petition itself and the affidavit in reply filed therein.
Viewed from this angle, it is clear that the amendment application that was made on 4th October, 2016 was certainly within the period of 30 days from the date of the affidavit in reply to the company petition which was dated 5 19th September, 2016.
We are of the view that the amendment does not raise any new cause of action. It is clear that if the company petition, as originally filed, is read as a whole, the amendment only cites additional instances of alleged oppression against the appellant. However, we make it clear that while restoring the order of the NCLAT, all questions as to whether the amendment has been made within limitation are left open to be decided on the facts of the case when the main company petition is heard.
With these observations, the appeal is allowed. Pending applications, if any, shall also stand disposed of.
..........................J. [ROHINTON FALI NARIMAN] ..........................J. [NAVIN SINHA] NEW DELHI 5th December, 2017 6 ITEM NO.12 COURT NO.12 SECTION XVII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No(s). 14940/2017 M.C. DAVAR HOLDINGS PRIVATE LIMITED Appellant(s) VERSUS AUROSAGAR ESTATES PRIVATE LIMITED & ORS. Respondent(s) (IA No.93716/2017-STAY APPLICATION) WITH C.A. No. 15447/2017 (XVII) (FOR EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT ON IA 97916/2017 C.A. No. 15135/2017 (XVII) (IA No.96121/2017-EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT) C.A. No. 15481/2017 (XVII) (FOR EXEMPTION FROM FILING C/C OF THE IMPUGNED JUDGMENT ON IA 98320/2017 Date : 05-12-2017 These appeals were called on for hearing today. CORAM :
HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN HON'BLE MR. JUSTICE NAVIN SINHA For Appellant(s) Mr. Mukul Rohtagi, Adv.
Mr. Arvind Datar, Adv.
Mr. Mustafar Motiwala, Adv.
Mr. Shwetabh Sinha, Adv.
Ms. Pragya Nalwai, Adv.
Mr. Rahul Chitnis, Adv.
Ms. Palak Mahajan, Adv.
Mr. Ujjal Banerjee, AOR Mr. Arvind Dattar, Sr. Adv.
Mr. Anando Mukherjee, AOR Mr. Nipun Saxena, Adv.
For Respondent(s) Dr. A.M. Singhvi, Sr. Adv.
Mr. Shyam Divan, Sr. Adv.
Mr. Arvind Kumar G., Adv.
Mr. Sadapuran, Adv.
Mr. Gaurav A., Adv.
Ms. Shruti Munjal, Adv.7
Mr. Chauhan Cinnbal, Adv.
Mrs. Puirthi, Adv.
Mrs. V. S. Laxshmi, Adv.
Mr. A. Venayagam Balan, AOR Mr. Dhruv Mehta, Sr. Adv.
Mr. Siddarth Bhatnagar, Adv.
Ms. Ruby Singh Ahuja, Adv.
Mr. Anupam Prakash, Adv.
Mr. Utsav Trivedi, Adv.
Mr. Nakul Gandhi, Adv.
for M/S. Karanjawala & Co., AOR Mr. Abhinav Vasisht, Adv.
Mr. Sumit K. Batra, Adv.
Mr. Mohinder Jit Singh, AOR UPON hearing the counsel the Court made the following O R D E R C.A. No. 14940/2017:
The appeal is allowed in terms of the signed order. Pending applications, if any, shall also stand disposed of.
C.A. No. 15447/2017, C.A. No. 15135/2017 & C.A. No. 15481/2017:
Arguments heard in part.
List the matters tomorrow i.e. on 6th December, 2017 as part-heard.
(SWETA DHYANI) (SAROJ KUMARI GAUR) SENIOR PERSONAL ASSISTANT BRANCH OFFICER (Signed order is placed on the file)