Vijay Kumar Agarwal & Ors vs Juhu Hotel Pvt Ltd & Ors & Ors

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI COMPANY APPEAL (AT) NO.197/2025 In the matter of: Vijay Kumar Agarwal & Ors Appellant Vs Juhu Hotel Pvt Ltd & Ors Respondent For Appellant:Mr Ritesh Agarwal, Mr Naman Khatri, Mr Ravi Grover, Ms Chetna Aggarwal, Advocates. For Respondent:Mr Ankit Acharya, Mr Ayush Jain, Advocates. Mr Abhijeet Sinha, Sr Advocate, Ms Pratiksha Sharma, Mr Saikat, Ms Ritu Choudhary, Mr Mukesh Kumar, Advocates for R6. ORDER (ORAL)

HYBRID MODE 13.01.2026: The Appellant is aggrieved by the impugned order dated

27.05.2025 passed by Ld. NCLT Mumbai Bench I in CP No. 526/MB/2019

whereby the petition under section 59, 241 & 242 of the Companies Act, 2013

for oppression and mismanagement and rectification of Register of Members was

dismissed on the ground of being barred by limitation.

2. It is argued the impugned order dated 27.05.2025 suffers from infirmities

as it erroneously records the petition being confined only Section 59 of the

Companies Act, 2013, based on the oral submission made by the Ld. Counsel

for the petitioner. It is submitted the appellants were not aware of the order dated

29.01.2025 wherein a statement was recorded as "the petition can be decided or

confined to Section 59 of the Companies Act, 2013".

2 3. It is alleged the impugned order passed is only confined to section 59 of

Act of 2013, which does not prescribe any time limit for filing application for

rectification of Register and that the Ld. NCLT had failed to appreciate that

during the pendency of Income Tax proceedings, Mr Roshanlal on 23.04.1972

passed away intestate. The Share certificate(s) pertaining to Mr Roshanlal were

in possession of the Income Tax Department and the appellants being heirs of

Mr Roshanlal were unable to apply to the Respondent Company/R-1 to add their

names, to the register of members.

4. It is the case of the appellant that Respondent No.3 (Mrs Krishna Kumari)

acquired the shares in the year 1998 in a fraudulent manner during the period

the share certificate of Mr. Roshanlal was seized by Income Tax Department.

Between the years 1972 to 2006, the income tax proceedings continued and

were being defended by the appellants as legal heirs of Mr. Roshanlal. In 1999,

the appellants had cleared/ paid the tax liabilities. It is argued the Income Tax

Department refused to hand over the share certificates pertaining to Mr.

Roshanlal's share, owing to non-payment of interest and subsequently

in 2006, appellants came to know that Mr. Anil Kumar Agarwal/RespondentNo.2

was seeking transfer of the company M/S Juhu Hotel Pvt Limited/ Respondent

No.1 to a third party, thus, the appellants/LRs got issued a Public Notice dated

14.10.2006.

5. In 2008, appellants visited the office of Sub-Registrar to enquire about the

agreement pertaining to transfer of R-1 Company. However, upon inspection, 3

appellants found there was no change in the name of company i.e. M/s Juhu

Hotel Pvt Ltd.

6. Appellants lodged a complaint in the year 2010 before the EOW, Mumbai

Unit III, alleging fraud, misappropriation and criminal breach of trust for illegal

transfer of shares.

7. Admittedly, R-2 Mr Anil Kumar Agarwal wrote a letter dated 21.03.2000 to

the Income Tax Department inter alia calling upon the Department to lift the

attachment order on Mr. Roshanlal's Share(s) and requested to transfer the said

shares in his name allegedly by suppressing/concealing and without the

knowledge of the appellants. This fact came into knowledge of the appellants only

in the year 2011.

8. On 04.07.2011 the appellants again approached EOW, Mumbai and

between 2012-2014, the EOW had recorded the statement of Appellant and on

03.01.2014 it held the matter was of civil nature and closed the complaint..

9. Since no action was taken by Police / EOW, hence, on 26.12.2016 the

appellants filed a criminal complaint before the Metropolitan Magistrate under

Section 156(3) Cr PC. Vide Order dated 01.06.2017, the criminal complaint was

allowed and Police was directed to investigate the matter, which is still pending.

10. It is argued there are no findings in the impugned order with respect to

the continuation of the investigation or as to the cause of action whether it is

continuing or recurring.

4 11. It is argued on 12.12.2018 ROC (R-8) had responded to the letter dated

21.09.2018 sent by the appellants alongwith the Share Certificate pertaining to

Mr Roshanlal shares and demonstrated the illegal and fraudulent transfer in

favour of R-3. i.e Mrs Krishna Kumari and R-6 ( M/s Mark Buildtech Pvt Ltd) and

that the limitation period shall begin only with effect from 12.12.2018 when such

letter of ROC was received. The petition was subsequently filed by appellants

in the year 2019 before Ld.NCLT Mumbai.

12. It is submitted limitation is a question of law and the fact which supports

the appellants case is they were pursuing remedies before the appropriate

authorities, including ROC, a quasi judicial body.

13. Learned NCLT vide its impugned order held as follows:-

23.It is undisputed fact that Roshanlal Agarwal was registered shareholder of the Respondent No. 1 Company on date of his death on 23rd April, 1972 and shares registered in name of Roshanlal Agarwal were transferred in name of Respondent No. 3 on 15.05.1998. The present petition was filed on 29th January 2019. It is the case of the Petitioners that the alleged fraud was discovered by them in December 2018 upon receipt of a letter dated 12th December 2018 from Respondent No. 8 in response to Petitioner No. 1's letter dated 21st September, 2018. The Petitioner has pleaded that they had no firm knowledge of status of shares of Roshanlal Agarwal prior to that.

24.It is trite law that, in case of fraud, the limitation runs from the date of knowledge or the date when the fact could have been known with reasonable diligence by the Petitioner and a petition ought to be filed within 3 years from such date of knowledge.

25.It is contention of the Respondents that the present Company Petition is barred by limitation as the Petitioners have slept over their rights time and again despite the knowledge that time was running against them to file appropriate proceedings in a court of competent jurisdiction. The 5

Respondents have contended that the Petitioner, including other legal heirs of Roshanlal Agarwal ought to have filed an application for transmission of shares registered in the name of Roshanlal Agarwal within 3 years of his demise i.e. by 22nd April, 1975. The Respondents have also placed on record following events to contest the submission of Petitioner No. 1 that the legal heirs of Roshanlal Agarwal came to know about the transfer of shares from the name of Roshanlal Agarwal only upon receipt of letter dated 12th December 2018 from Respondent No. 8 ROC and they had no knowledge prior to that.

a) Correspondence dated 16.6.1969 between Chamanlal and Roshanlal shows that Chamanlal had disputed Roshanlal's rights in the various assets of the Firm, which included the shares in Respondent 1 which were in Roshanlal's name;

b) Suit No. 8817 of 1971 was filed on17.11.1971 in the City Civil Court by Roshanlal against Chamanlal, Respondent No. 3 and others, in relation to his alleged directorship in Respondent No. 1 before his demise on 23.4.1972;

c) A Suit No. 466 of 1975 was filed on 28.5.1975 before the Hon'ble Bombay High Court by Roshanlal's heirs including one Mr. Akshani Kumar (the eldest son of Roshanlal) and Petitioner Nos. 1 and 2 herein (being Plaintiff Nos. 3 and 5 therein respectively) against Chamanlal, inter alia, seeking dissolution of the Firm and settlement of accounts and all assets which included the shares of Respondent No. 1. An affidavit was filed on 1.10.1975 by Akshani Kumar in this Suit, inter alia, referring to the shares of Respondent No. 1 allegedly held by Roshanlal. This suit was dismissed on 11.6.1992;

d) Petitioner No. 1 issued a public notices on 14.10.2006 in Bombay Samachar and Free Press Journal cautioning the public against dealing in shares of Respondent No. 1 held by Respondent No. 2. The Petitioners were clearly aware that Respondent No. 2 was claiming title to Roshanlal's shares on the date of public notice;

e) Petitioner No. 1 lodged a complaint on 4.7.2011 with the EOW against Respondent Nos. 2 and 3, alleging misappropriation, unlawful and illegal transfer of Roshanlal's shares and criminal breach of trust and this complaint was dismissed on 8.9.2011 by EOW informing Petitioner No. 1 that his complaint prima facie did not disclose any cognizable offence, and that, since the same 6

did not come under the EOW's ambit, he may approach the competent authority for redressal of such grievance;

f) On 29.10.2011, Petitioner No. 1 filed a further complaint with the EOW stating therein various facts and allegations pertaining to the said shares. On 3.1.2014, EOW informed Petitioner No. 1 that it is closing the enquiry into his complaint as the same was of a civil nature;

g) On 5.12.2012, Petitioner No. 1 wrote to the Commissioner of Police claiming that the aforesaid shares had been illegal and unlawfully transferred, who subsequently transfers the complaint to the EOW;

26.It is undisputed fact that the present petition has been filed after about 46 years of demise of Roshanlal Agarwal and prior to filing of present petition. The Petitioner No. 1 had only issued a Notice dated 24th November, 2018 to Respondent No. 1 thereby seeking rectification of the register of members of this Respondent, however, no documentation was submitted by the Petitioners with this Respondent in support of their claim for rectification of the register of members till date in terms of clause 5 of the Articles of Association of the Respondent Company which provides that "The executors or administrators of a deceased sole holder of shares shall be the only persons recognised by the Company as having any title to the share. Provided nevertheless that it shall be lawful for the Directors to dispense with the production of probate or letters of administration or such other legal representation upon such terms as to indemnity or otherwise as the Directors may deem fit.....".

27.The Petitioners had knowledge of shares standing in name of their deceased father as is evident from the pleadings in Civil Suit no. 466 of 1975 filed on 28.5.1975 before the Hon'ble Bombay High Court by Roshanlal's heirs including one Mr. Akshani Kumar (the eldest son of Roshanlal) and Petitioner Nos. 1 and 2 herein (being Plaintiff Nos. 3 and 5 therein respectively) against Chamanlal, inter alia, seeking dissolution of the Firm and settlement of accounts and all assets which included the shares of Respondent No. 1. Akshani Kumar had stated at para 5 (page 3 thereof) of affidavit dated 18.10.1975 affirmed by him seeking appointment of court receiver, that ".........I say that the partnership had a substantial interest in the Juhu Hotel Private Ltd. which was doing a flourishing business in Bombay.........." Further, at para 2 of the Civil Suit plaint, it is stated that "The shares of the limited company and any interest in other concerns, having been paid for and acquired out of partnership funds are assets of the 7

partnership". These averments clearly show that the Respondents have conceded that the shares, in question, were acquired out of funds of partnership firm and thus constituted property of the partnership firm. Accordingly, the petitioners had complete knowledge of existence of these shares in name of the Ratanlal Agarwal as property of partnership firm and had sought dissolution of the partnership assets and settlement of deceased Ratanlal Agarwal's account. However, the petitioner didn't take any action to file appropriate application seeking transmission of these shares in their name at that time also.

28.Petitioner No. 1 issued a public notices on 14.10.2006 in Bombay Samachar and Free Press Journal cautioning the public against dealing in shares of Respondent No. 1 held by Respondent No. 2 stating that "I understand that one Mr. Anil Kumar Agarwal is claiming to be the 100% shareholder of the company Juhu Hotels Pvt. Ltd. and is negotiating to deal with the shares of Juhu Hotels Pvt. Ltd. and consequently the property described in the schedule hereunder written. Public is hereby cautioned not to enter into any agreement or deal with in any manner with the said 49% shares of Juhu Hotels Pvt. Ltd. belonging to my father late Roshanlal Agarwal and now belonging to me........" This shows the clear admission of the Petitioner No. 1 that he had knowledge of existence of shares in the name of his deceased father and claim of Respondent No. 2 over those shares, however the petitioners failed to take any action to seek transmission of those shares in his name at that time also or approach this Tribunal.

29.Even thereafter, Petitioner No. 1 had knowledge as can be observed from a complaint on 4.7.2011 with the EOW against Respondent Nos. 2 and 3, alleging misappropriation, unlawful and illegal transfer of Roshanlal's shares. It is pertinent to note letter dated 15.7.2011sent by Sr. Inspector, EOW Unit III to the Petitioner No. 1 to attend his office referring to application dated 4th July 2011in respect of misappropriation and wrongful unlawful and illegal transfer of 101 Shares of Juhu Hotel Pvt. Ltd. belonging to the estate of late Mr Roshanlal. This clearly demonstrates existence of knowledge of fraud, alleged to be perpetrated against the Petitioners by Respondent No. 2 and 3, on part of the Petitioners. It is pertinent to note that complaint was dismissed on 8.9.2011 by EOW informing Petitioner No. 1 that his complaint prima facie did not disclose any cognizable offence, and that, since the same did not come under the EOW's ambit, he may approach the competent authority for redressal of such grievance. Even at this occasion also, the petitioners 8

failed to take any action to seek transmission of those shares in his name at that time also or approach this Tribunal.

30.Even thereafter, though the Petitioners have approached EOW again on 29.10.2011 and Commissioner of Police on 5.12.2021 in relation to illegal transfer of these shares, the petitioners failed to take any action to seek transmission of those shares in his name at that time also or approach this Tribunal.

31.It has been argued by the Petitioner that, in or around 1965, the Income Tax Department seized and attached the Roshanlal Shares, owing to certain Income Tax proceedings initiated against Roshanlal and Chamanlal, and during the pendency of the Income Tax proceedings, Roshanlal passed away intestate on 23rd April 1972. As the share certificate pertaining to the Roshanlal Shares were in the possession of the Income Tax Department, the heirs of Roshanlal were unable to apply to the Respondent No.1 Company to add their name to the share certificate and the Register of Members. By 2004, the income tax issues were sorted out by the heirs of Roshanlal. However, the Income Tax Department refused to release the share certificates pertaining to the Roshanlal Shares. In the course of this agitation, the Petitioners were shocked to discover a letter dated 21st March 2000, addressed by Respondent No. 2 (through the Respondent No. 1 Company) to the Income-Tax Department, wherein, Respondent No. 2, sought for lifting of the attachment order over the said Shares. Even if this explanation for the not seeking transmission of shares of deceased Ratanlal Agarwal in name of his legal heirs is accepted, the Petitioners, having become aware of alleged fraudulent conduct of the Respondent No. 2 and 3 in the year 2004 itself, failed to take any action to seek transmission of shares in their name, dehors share certificate in their possession, or approach this Tribunal in case the Respondent Company would have refused to register transmission at that time.

32.The events discussed at para 27 to 31 clearly contradicts the claim of the Petitioner No. 1 that he came to know about the fraudulent transfer of shares registered in name of his father only on receipt of a letter dated 12th December 2018 from Respondent No. 8 to cross the bar of limitation. Accordingly, we are of considered view that the present petition has been filed beyond the period of 3 years from the date of knowledge of fraud alleged to have been perpetrated by the Respondent No. 2 and 3 against them, hence, the petition is barred in terms of law of limitation.

33.Nonetheless, the events stated para 27 to 30 lends some credence to the submission of Respondent No. 2 and 3 that a 9

verbal settlement may have arrived at between the parties in relation to shares of deceased Roshanlal Agarwal, as no aggrieved person, having access to qualified lawyers, would fritter his legal rights in a manner, the Petitioners have done. It can not be comprehended that the Petitioners were not aware of legal remedy available in terms of Section 58 of the Act of 2013 read with clause 5 of the Articles of Association of Respondent No. 1 company, which specifically provides for timebound transmission of shares in the name of legal heirs of a deceased shareholder. We appreciate that the Petitioners have challenged the existence of any such settlement by placing arguments against existence of any such settlement, since the issue of rights over shares of deceased Ratanlal Agarwal involves complex facts, we refrain from deciding the legal title in relation to those shares in the present proceedings, as the same can only be decided by a Civil Court.

34.In view of the above, Company Petition No. 526 of 2019 is dismissed as barred by limitation and disposed of accordingly. Consequently, MA 1094 of 2019 seeking interim relief also stands disposed of

14. It is the submission of the learned senior counsel for the appellant that

the Ld. NCLT had failed to correctly apply Section 17 of the Limitation Act which

postpones the commencement of the limitation period until the fraud is

discovered. It is submitted the fraud was discovered only on 21.09.2018 when

the appellants came to know through a letter of ROC which referred to the

transfer of shares in favour of Respondent No.3, Ms Krishna Kumari and

Respondent No.6, Mark Buildtech Pvt Ltd. Heard.

15. We are not inclined to accept the submission made by the learned senior

counsel for appellant that they came to know about the alleged fraud only on

12.12.2018. The appellant themselves have admitted in year 1998 the shares

certificates were acquired by Respondent No.3 and in 2006 the appellants came 10

to know the Respondent No.2 was seeking to transfer R1 company to a third

party. Further in 2010 the appellant lodged a complaint qua illegal transfer of

shares and rather admitted that Respondent No.2, Mr. Anil Kumar wrote a letter

dated 21.03.2000 to the Income Tax Department inter alia calling upon it to lift

the attachment order on Mr. Roshan Lal shares and to transfer those shares in

his name. This fact came to the knowledge of the appellant in the year 2011

itself as stated in the appeal. Thus, since 2006 the appellants were aware of the

fact the shares are either transferred or in process of further being transferred

but came forward to challenge such transfer only in 2019 alleging that they

came to know of shares certificate in the name of Respondent No.3 only in the

year 2018 itself. The appellants have relied upon Section 17 of the Limitation

Act and it reads as under:-

17. Effect of fraud or mistake.--(1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act,--

(a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or

(b) the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or

(c) the suit or application is for relief from the consequences of a mistake; or

(d) where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him, the period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have discovered it; or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production:

11 16. A bare perusal of the Section 17 would clarify the period of limitation shall

not begin to run until the plaintiff or applicant has discovered the mistake or

could, with reasonable diligence, had discovered it. Now admittedly, the

appellants have been taking action qua illegal transfer of shares since the year

2011 but never came forward before the appropriate forum viz the Company Law

Board or Ld. NCLT for rectification of the register of members till 2019. Further

it is pertinent to note the shares were not in the name of the appellant's father

Mr. Roshan Lal but rather purchased from the money belonging to a partnership

firm of which Mr. Roshan Lal and Chaman Lal, both were partners.

17. In P Radha Bai and others Vs P Ashok Kumar and Another (2019) 13

Supreme Court Cases 445 the Hon'ble Supreme Court had held Section 17 does

not encompass all kinds of frauds and mistakes and it only encompasses those

fraudulent conduct or act of concealment of documents which have the effect of

suppressing the knowledge entitling a party to pursue its legal remedy. Once a

party becomes aware of the antecedent facts necessary to pursue a legal

proceedings, the limitation period commences.

18. Thus where the appellants were aware of transfer as far as back in 2006

and lastly in the year 2011, can't now allege the limitation would start on receipt

of a letter dated 12.12.2018 of Respondent No.8.

19. Thus considering the above fact and submission, we find no illegality in

the impugned order and we are not inclined to accept this appeal. The appeal is

accordingly dismissed.

12 20. Pending application i.e. IAs No.4892, 4893 and 4894/2025 are also

disposed of.

(Justice Yogesh Khanna) Member (Judicial)

(Mr. Ajai Das Mehrotra) Member (Technical) Bm/rr