Acme Consultants (P) Limited vs Mooldhan Advisory Systems (P) Ltd`

[Arising out of order dated 24.05.2017 passed by National Company Law Tribunal, Kolkata Bench in C.P. No.119 of 2014]

IN THE MATTER OF:

1. ACME Consultants (P) Limited Office at 145, Rash Behari Avenue, 4th Floor, Kolkata - 700 029

2. Mooldhan Advisory Systems (P) Ltd. Office at 145, Rash Behari Avenue, 4th Floor, Kolkata - 700 029

3. Namokar Vinimay (P) Ltd. Office at 145, Rash Behari Avenue, 4th Floor, Kolkata - 700 029 ...Appellant Nos.1 to 3

Versus

1. Wondermax Supply Pvt. Ltd. Office at 21A, Shakespeare Sarani, 3rd Floor, Kolkata - 700 017

2. Yash Deep Trexim (P) Ltd. Pekon Building, 4th Floor, Plot No.Y-13, Block - EP, Kolkata - 700 091

3. Beltas Merchants (P) Ltd. Pekon Building, 4th Floor, Plot No.Y-13, Block - EP, Kolkata - 700 091

Company Appeal (AT) No.241 of 2017 - 2-

4. Millenium Securities (P) Ltd. Office at 7A, Bentinck Street, 2nd Floor, Old Wing, Kolkata - 700 001

5. Chitravali Dealers (P) Ltd. 7A, Bentinck Street, 2nd Floor, Old Wing, Kolkata - 700 001

6. Deva Merchants (P) Ltd. 7A, Bentinck Street, 2nd Floor, Old Wing, Kolkata - 700 001

7. Propkar Marketing (P) Ltd. 7A, Bentinck Street, 2nd Floor, Old Wing, Kolkata - 700 001

8. Safal Vyapaar (P) Ltd. 7A, Bentinck Street, 2nd Floor, Old Wing, Kolkata - 700 001

9. Jitendra Kumar Choubey 5, Sreenath Das Lane, Bowbazar, Kolkata 700 012

10. Anil Kumar Bhansali 77 G.T. Road, Howrah - 711 106, West Bengal

11. Jarjious Sheikh Office at Noorpur, Ramnagar, South Twenty Four Parganas - 743 368

12. Prabir Mukherjee Son of Late Janakinath Mukherjee Resident at 121, Bonfield Lane, Kolkata - 700 001

13. Joykey Merchandise Private Limited Office at 6B, Clive Row, Kolkata - 700 001

Company Appeal (AT) No.241 of 2017 - 3-

14. Swarna Technology Private Limited Office at 3A, Shakespeare Sarani, Kolkata - 700 071

15. Jagrati Trade Service (P) Ltd. Office at 3A, Shakespeare Sarani, Kolkata - 700 071 ...Respondent Nos.1 to 15

Present: Shri Arvind Kumar Gupta, Ms. Purti Marwaha and Ms. Henna George, Advocates for the Appellants

Shri Gopal Jain, Senior Advocate with Shri Gaurav Kejriwal, Shri Ankit Kohli, Shri Arjun Agarwal, Shri Sujit Kesari, Shri Rishabh Srivastava and Shri Karan Khanna, Advocates for Respondent No.1

JUDGEMENT

A.I.S. Cheema, J. :

1. The appellants - original petitioners had filed Company Petition

No.119 of 2014 which came up before National Company Law Tribunal,

Kolkata Bench ("NCLT" in short). The petition was filed under Section 397,

388, 402 and 403 of Companies Act, 1956 (old Act) read with Section 241

and 242 of Companies Act, 2013 (new Act). The dispute relates to

Respondent No.1 Company. It is stated that it is a private limited company.

2. The case put up by the Petitioners before NCLT was that the

authorized paid up share capital of the company was of Rs.1 lakh. The

Petitioners held 33% shares while Respondents 2 to 4 held 33% and

Respondents 13 to 15 held 33% shares. Respondent No.12 held 100 equity

shares equal to 1% equity shares. The earlier Directors Ghanshyam Sarda,

Shri Jagdish Sarda and Smt. Santa Sarda resigned from the Board of

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Directors on 15.12.2007 and Board of Directors of Respondents 2 to 4 was

constituted as per wishes of Ghanshyam Sarda. The Petitioners did not

have any representation in the Board. Inter alia, it was claimed before the

NCLT that the Petitioners came to know that the Respondents were trying

to dispose of the property of the Company. They claimed that in

Extraordinary General Meeting purported to have been held on

17.07.2009, the authorized share capital of company had been increased

from Rs.1 lakh to Rs.5 lakhs reducing the shareholding of Petitioners from

33% to 6.6%. The Petitioners claimed that they had not been given notice

of such meeting and the increase of shares was illegal, null and void.

Subsequently, on 30.07.2009 in Board Meeting, 40,000 equity shares of

the company were issued and allotted to Respondents 5 to 8 without

proper Board Meeting. The resolutions passed in the Board Meeting were

illegal, null and void. Petitioners claimed that they did not receive any

notice of General Body Meetings between 2009 - 2010 till 2012 - 2013. No

such details were also provided by Respondent No.1 Company in the

balance sheet for year ending 31.03.2009. Petitioners claimed that there

was siphoning of funds of the company.

3. In the Company Petition, the Petitioners along with other prayers

requested for declaration that the increased authorized capital on 17th July

2009 should be declared as illegal, null and void; declaration that the

allotment of 40,000 equity shares on 30.07.2009 to Respondents 5 to 8

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was illegal, null and void; declaration that all Board Meetings subsequent

to January, 2008 should be held as illegal, null and void.

4. It appears that in the NCLT only Respondent Nos.1 and 11 appeared

and filed reply while others remained ex-parte. These Respondents claim

that the petitioners did not take any action for 7 years and after much

delay the petition had been filed. The Petitioners had waived their right to

claim the reliefs as sought. It was alleged that one Amit Sarda, eldest son

of Govind Sarda had filed the Company Petition supressing material facts.

It was claimed that Respondent No.1 Company was guarantor for loan

obtained by one M/s. Monozyme India Ltd. from Oriental Bank of

Commerce and said Amit Sarda was running the said company. The

brother of Aditya Sarda was the Managing Director of the said M/s.

Monozyme India Ltd. The Respondent No.1 Company had approved and

provided its assets as collateral security for the loan obtained by Aditya

Sarda for M/s. Monozyme India Ltd. The Respondents claim that there was

default in the repayment of the said loan and to save property of that

company with ulterior motives, present petition had been filed. The

Respondents referred to para 13 and 14 of the petition to state that the

resignation of Ghanshyam Sarda, Jagdish Sarda and Smt. Santa Sarda

was of 2007 and grievances on that count were also hopelessly delayed.

5. The learned NCLT heard the parties and going through the matter

recorded reasons to come to a conclusion that the petition suffered from

delay and latches. Taking support of Article 137 of the Limitation Act, 1963

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and keeping in view huge inordinate delay and latches, the NCLT

dismissed the petition.

6. Being aggrieved of such Judgement and Order, the original

Petitioners - Appellants have filed this appeal. The Appellants claim that

they came to know that the Respondents were trying to dispose of the only

property of the company through brokers and upon making an enquiry,

the Appellants came to know about the affairs of the company.

Subsequently, they filed the Company Petition relating to various acts of

oppression and mismanagement. However, NCLT solely on the ground of

delay and latches dismissed the petition without going into the merits of

the case. The Appellants claim that the petition was filed at the earliest

opportunity after coming to know about illegalities committed by the

Respondents. According to them, the Respondents did not provide prior

knowledge to the Appellants. Several illegalities committed by the

Respondents which were on record were ignored by NCLT. The increase of

share capital was not in the knowledge of Appellants. They had not been

given any invitation to purchase the shares. Rentals received by the

Company by leasing its assets was not provided in the balance sheet.

Equity shares issued to Respondents 5 to 8 were without proper Board

Meeting. They had not received any notice of Annual General Meetings

between 2009 - 2010 till 2012 - 2013.

7. It has been argued by the Appellants that the Appellants constitute

3 out of 10 Members of the Company and thus they could maintain the

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petition. The main contention is that the Respondents fraudulently

increased the share capital of Respondent No.1 Company on 17.07.2009

and on 30.07.2009 allotted fresh equity to 3rd parties without justification

and notice to the Appellants - petitioners, who were shareholders. It is

argued that the information was discovered in early 2014 when brokers

contacted and the Appellants - Petitioners conducted enquiries on MCA

portal. The petition was immediately filed thereafter claiming oppression

and mismanagement. The Company was receiving Rs.3 lakhs per month

from rentals and did not require any funds to increase the share capital.

The Respondents contested the company petition but did not show that

notices were issued to the Petitioners. No record was produced that proper

procedure had been followed. The NCLT misread para - 13 and 14 of the

Company Petition to dismiss the petition on the ground of delay. According

to the counsel for Appellants - Petitioners, the concerned paragraphs were

only written to demonstrate that the Appellants were not part of the Board

of Directors and so they were not aware of the working of the Company.

Thus according to the learned counsel, the petition was misread. It has

been argued that there are Judgements to show that date of knowledge is

material for the purpose of limitation when there are allegations like

discovery of fraud, etc. It is argued that limitation is pure question of law

and facts. It is also argued that the Appellants not being Directors were

not involved in day-to-day affairs and the annual returns had been filed

after 4 years and that the same were forged and false and thus the

Appellants - Petitioners did not know about the acts of Respondents and

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the petition could not have been dismissed on the ground of delay. The

Respondents had claimed that the Appellants had changed their address

which was vague. The argument is that the Petitioners came to know about

illegal increase in authorized share capital and allotment of shares only

after they found brokers trying to sell property of the Company and the

said brokers contacted the Petitioners. The exact date could not be given

since evidently no notice was received. The Petitioners - Appellants claim

that they have now filed screen shot to show that the annual return of

2008 -2009 was filed only on 29.07.2011. The learned counsel tried to

show the concerned returns had actually been filed late. According to the

learned counsel for the Appellants, the appeal should be allowed and the

matter should be sent back to the NCLT to decide the same on merits.

8. The learned counsel for the Appellant - Petitioner submitted that in

the Company Petition, the Petitioners referred to various facts to show

narrations of the incidents but their main grievance was only with regard

to the increase of share capital in 2009 and the NCLT wrongly referred to

the facts narrated of various incidents to calculate limitation. It is stated

that the forms submitted to Registrar of Companies were delayed and in

the absence of any notice, knowledge could not be attributed to the

Petitioners. Reference has been made to the affidavit of the Appellants filed

on 06.12.2017 and its compilation - page 35 filed with it to show that the

screen shot was evidence of form 2 regarding increase of share capital

being filed with ROC only on 19.10.2011. Thus it is stated that the

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Company Petition filed on 14.08.2014 could not be said to be time barred.

It is argued that even the return of 2009 was filed on 29.07.2011 which

can be seen from the screen shot filed at page 37 with the affidavit dated

02.12.2017.

9. Against this, the learned counsel for the contesting Respondents

submitted that the Appellants were aware about the developments in the

Company in 2009 and did not raise dispute for many years and thus the

petition suffered from delays and latches and was rightly dismissed by the

NCLT.

10. Learned counsel for the Respondent submitted that the company

petition which was filed had vague averments regarding limitation. The

Petitioners did not specify as to when they came to know about the EGM

dated 17.07.2009 and Board Meeting dated 30.07.2009. It is argued that

the company petition mainly seeks reliefs regarding these incidents and

there are no clear pleadings regarding knowledge which is exclusively

within the domain of the Petitioners. The learned counsel further

submitted that the certified copies of annual returns and Form 20B as well

as Form 5, which have been filed, show that these were filed in 2009 or

2010 and e-mails sent by ROC showed that the Petitioners were aware of

the developments. The Appellants - Petitioners had themselves raised

company disputes and thus they had knowledge and the NCLT has rightly

dismissed the petition as time barred. The prayers of the petition related

to declarations with reference to increase of capital in 2009 and allotment

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of equity shares in 2009. The other prayer to declare declaration of Board

Meetings after 2008 is based on these earlier declarations sought and thus

the petition was clearly time barred and suffered from delay and latches.

11. Looking to the averments made by both sides, when we have perused

the Company Petition which was filed with NCLT, it has been pleaded in

para 15 and 16 as under:

"15. The petitioners however have recently came to know that

respondents are trying to dispose off the only property of

the Company through various brokers, who are making

frequent visits to the property. The petitioners are

apprehending that there will be immediate disposal of

the property by the respondents. It is apprehended that

Respondents are now seeking to sell, alienate, dispose of

the assets and properties of the Company.

16. The petitioners previously upon enquiry with regard to

the affairs of the company were shocked to find out the

state of affairs of the company which had been all hidden

from the petitioners."

(Emphasis supplied)

12. It is clear from these pleadings that the company petition has been

triggered because the Petitioners came to "recently" know from some

brokers that the Respondents were trying to sell, alienate, dispose of the

properties of the company.

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13. Para 16 clearly says that the petitioners "previously" upon enquiry

were shocked to find the state of affairs. Thus the knowledge about affairs

of the Company was "previous" which could be any time even in the remote

of past tense. The paragraphs subsequent to para - 16 then refer to the

Extraordinary General Meeting of 17.07.2009 and allotment of 40,000

equity shares. The word "previously" in para - 16 has not been explained.

The petitioners themselves pleaded (in para 34 of the petition) that the

company was being run on the basis of partnership principles and between

the shareholders of the company. If this is so, they would/should

ordinarily know what all is going on. Still the Petitioners want it to be

accepted in 2017, that actions taken in 2009 and all the Board Meetings

subsequent to that, need to be wiped out. Regarding limitation, it has been

mentioned in the petition in para 5 as under:

"5. Limitation

The Petitioners declare that there is no prescribed period

of limitation for institution of the instant proceedings.

Further and/or in any event, the Petitioners declare that

the petition is within the prescribed period of limitation."

14. Thus considering the pleadings as well as limitation paragraph

relating to limitation, it can be stated that the petition is quite vague. When

the Petitioners came to know specifically in their knowledge and they did

not contemplate the same, using the word "recently" does not help.

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15. Apart from this, the learned counsel for the Respondents has

painstakingly pointed out that there are documents to show that the

Respondents had long before submitted the necessary forms to ROC and

Petitioners who claim that the company was being run on the principles of

partnership had every opportunity to check the records and thus should

be attributed with knowledge. The learned counsel for the Respondents

submitted that the Respondents had themselves raised company disputes

and they actually had the knowledge.

16. Learned counsel for the Respondents has pointed out from counter

affidavit filed by Respondent No.1 on 12.12.2017 that the 3 Appellants

were using e-mail address "vcil @ giasc.101.vsnl.net.in" as their official

e-mail address in the annual returns. The learned counsel argued and para

- 4 of the affidavit filed for Respondent No.1 along with Annexure A1 at

pages 6 to 14 claims that the e-mail ID of these Appellants is as just

mentioned. According to the learned counsel, the Appellants appear to

have communicated management dispute to Registrar of Companies by

such e-mail and consequently, the communication dated August 4, 2009

was forwarded to the Appellants on this e-mail which can be seen from

Annexure A2 filed with affidavit dated 12.12.2017. Learned counsel argued

that Annexure A2 shows that the Respondent Company had submitted

Form 5 dated 23.07.2009 with regard to increase of authorized share

capital and ROC had informed Appellants about the same on 04.08.2009.

The learned counsel stated that this document shows that in 2009 itself,

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functioning regarding increase in authorized share capital was

communicated to the Appellants.

17. The learned counsel for the Respondents submitted that Annexure

A3 which has been filed with the counter affidavit for Respondent No.1 at

pages 16 to 40 is certified copy of the annual return and it shows at page

- 40 which is the last page of the certified copy, that Form 20B i.e. Annual

Return dated 29.09.2009 of the Respondent Company was "passed on

13.08.2010". The argument is that in this certified copy, the computerized

Form 20B at page - 17, although it refers to authorized capital of the

company as Rs.1 lakh, the Respondents submitted hand-filled annual

return along with it to show that the share capital is increased to Rs.5

lakhs. The argument is that this was required because the Respondents

had raised company dispute and computerized form to that effect could

not be filed and so along with computerized form, hand written form was

annexed. The counsel referred to Challan at page - 41 with the counter

affidavit which is dated 13.08.2010 to say that it was submitted on

18.08.2010. The learned counsel submitted that with the annual return

which was submitted with Form 20B, the list of attachments (page 21 of

the Annexure with counter affidavit) shows the hand written annual return

(as at page - 23) and copy of the letter dated 4th August, 2009 as at page -

14 (which was sent to the Appellants) and Form 5 (page 35 with the counter

affidavit) were being attached.

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18. The learned counsel then referred to Annexure A4 at pages 44 to 60

with the counter affidavit to submit that in 2009 - 2010 also pre filled Form

20B was filed along with manually filled annual return and was uploaded

on 04.12.2010. The counsel then further pointed out that at Annexure A5

with the counter affidavit, certified copies of Form 23AC are submitted

which was passed on 17.08.2010.

19. Against this, the learned counsel for the Appellants - original

Petitioners argued that screenshot taken from the website of the Ministry

of Corporate Affairs shows that Form 20B for year ending 2009 - 2010 had

been filed only on 29.07.2011 and thus the company petition filed on

14.08.2014 was in limitation. The counsel referred to page - 37 - 38 with

the affidavit dated 2nd December, 2017 of Amit Sarda filed for the

Appellants on 06.12.2017. With reference to this, the learned counsel for

the Respondents has submitted and rightly so, that in the face of certified

copies filed by the Respondents, reliance on screenshot cannot be made.

According to him, the MCA Portal has a disclaimer and thus against

certified copies reliance on the screenshot cannot be placed.

20. Looking to the documents pointed out by the learned counsel for the

Respondents, it is apparent that the Petitioners who appear to have raised

company dispute were informed of the developments by e-mail (Annexure

A2 with counter affidavit of Respondent No.1) regarding the developments.

The learned counsel for Respondents rightly submitted that this shows

knowledge to the Appellants - Petitioners. Even otherwise, it is argued that

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if the Appellants were vigilant they would have exercised option to have

access to records of the ROC and cannot be heard after so many years to

set aside actions taken long back to which they acquiesced.

21. Looking to the prayers made in the company petition and the

impugned Judgement passed by the NCLT for reasons mentioned above,

we agree with the NCLT that the petition was suffering from delays and

latches and the Appellants - Petitioners failed to make out a case for the

NCLT to interfere.

22. We do not find any reason to upset the impugned Judgement and

Order passed by the NCLT.

23. For such reasons we do not find any substance in the various

arguments being raised on behalf of the Appellants. We accept the

submissions made by the learned counsel for the Respondents which are

based on records.

24. For the above reasons, the appeal is dismissed. There shall be no

order as to costs.

[Justice Bansi Lal Bhat] [Justice A.I.S. Cheema] Member (Judicial) Member (Judicial)

New Delhi 20th February, 2018

/rs/nn

Company Appeal (AT) No.241 of 2017