CA No.06/2023

1. Applicants herein who are the petitioners 2, 4 and 6 in Company Petition 72/2008, have filed this CA under Rule 155 R/w Rule 11 of NCLT Rules , for leave to amend the prayer in main CP.No.72/2008 by adding the following prayer after prayer portion of CI .805 as Prayer CI.8.6.

“That all the actions of the Respondents 2 to 9 in 1st Respondent Company in reducing the share capital with respect to petitioners and other shareholders and further new allotment of shares to Respondent No.3,4,7,8&9 and to dead persons without any resolutions in Board meeting or AGM/EGM during the pendency of the Company Petition as invalid, illegal and all the illegal actions be treated as null and void”.

2. The additional pleadings as narrated in the Application are inter-alia, alleging that the Board and General meetings (AGM and EGM) held during the year 2011-2012 whereunder the paid-up share capital of the first respondent Company had been increased from 10 lakhs equity shares to 21,64,800 equity shares illegally, without giving any notice to the shareholders and in breach of the provisions relating to conduct of meetings of the 1st respondent company.

3. The Respondents 1-11, have resisted this Application by filing counter inter-alia that this Application is not maintainable under law, barred by limitation besides that the meetings have been held properly and allotment of the equity shares have been done by following the due procedure.

CA No.29/2023

4. Applicants herein who are the petitioners 2, 4 and 6 in Company Petition 72/2008, have filed this CA under Rule 155 R/w Rule 11 of NCLT Rules, for leave

(i) to file additional pleadings in main CP.No.72/2008( T.P.30 of 2016) after para 6.13 as Para 6.13A to 6.13P, corresponding to all the verbatim pleadings from para 2-18 and (1) which is actually para 19 in C.A.No.6 of 2023 in C.P.72 OF 2008(T.P.30/2016)

(ii) To add the prayer which has been mentioned in CA 06/2023.

(iii) and to receive the documents filed in C.A.6 of 2013 in C.P.72/2008(T.P.30/2016)

5. The additional pleadings as narrated in the Application are inter-alia, alleging that the Board and General meetings (AGM and EGM) held during the year 2011-2012 whereunder the paid-up share capital of the first respondent Company had been increased from 10 lakhs equity shares to 21,64,800 equity shares illegally, without giving any notice to the shareholders and in breach of the provisions relating to conduct of meetings of the 1st respondent company.

6. The Respondents 1-11, have resisted this Application by filing counter inter-alia that this Application is not maintainable under law, barred by limitation besides that the meetings have been held properly and allotment of the equity shares have been done by following the due procedure.

CA No.91/2023

7. Applicant herein who is the 3rd petitioner in Company Petition 72/2008, filed this CA under Rule 155 R/w Rule 11 of NCLT Rules, for leave to file additional pleadings in main CP.No.72/2008 ( T.P.30 of 2016) after para 6.13 as Para 6.13A to 6.13P, corresponding to all the verbatim pleadings from para 2-18 and (1) which is actually para 19 in C.A.No.6 of 2023 in C.P.72 OF 2008(T.P.30/2016) and to receive the documents filed in C.A.6 of 2013 in C.P.72/2008(T.P.30/2016).

8. The additional pleadings as narrated in the Application are inter-alia, alleging that the Board and General meetings (AGM and EGM) held during the year 2011-2012 whereunder the paid-up share capital of the first respondent Company had been increased from 10 lakhs equity shares to 21,64,800 equity shares illegally, without giving any notice to the shareholders and in breach of the provisions relating to conduct of meetings of the 1st respondent company.

9. The Respondents 1-11, have resisted this Application by filing counter inter-alia that this Application is not maintainable under law, barred by limitation besides that the meetings have been held properly and allotment of the equity shares have been done by following the due procedure.

10. In the light of the contest the Points that arise for consideration by this Tribunal are;

(i) Whether the Tribunal is empowered to amend a petition under Section 241 of the Act, 2013 and if so, to what extent

(ii) Whether the amendment sought for and allowed by Tribunal in the impugned order amounts to amendment. with regard to a fresh cause of action

11. Since the pleadings and the reliefs prayed in the above applications are almost similar, we propose to dispose of the above applications by this common order. Likewise, the factual matrix relating to both the above points being same, we prefer to club both the points and answer he same by our common discussion.

12. We have heard learned Senior Counsel Shri M.S.Prasad, Learned Counsel Shri A.Chakravarthy, for Applicants and Learned Counsel Shri Yogesh Kumar Jagia, for Respondents in CA 6/2023 & C.A.29/2023. Learned Counsel Shri Sharad Sanghi for Applicant and Learned Counsel Shri Yogesh Kumar Jagia, for Respondent in IA No.91/2023.

13. As the present petition is filed under Rule 155 of the NCLT Rules, at the outset we wish to state that Rule 155 of NCLT Rules, which is as below, provides general power to amend defect or error in any proceeding before the Tribunal.

"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 7 determining the real question or issue raised by or depending on such proceeding.

Rule 17 (1) (b) of the NCLT Rules, which is as below, allow the Registrar to receive application for amendment.

(1) The Registrar shall have the following functions, namely: - (b) receive applications for amendment of appeal or the petition or application or subsequent proceedings.

Rule 32 prescribes interlocutory application which is as below;

Every Interlocutory application for stay, direction, condonation of delay, exemption from production of copy of order appealed against or extension of time prayed for in pending matters shall be in prescribed form and the requirements prescribed in that behalf shall be complied with by the applicant, besides filing an affidavit supporting the application.

14. It is pertinent to notice that thirty days' time provided under Rule 155 NCLT Rules 2016 to amend a petition has been newly introduced into the Rules, thereby ensuring expeditious disposal of the application by Tribunal/ Appellate Tribunal, keeping in view Section 422 of the Act, 2013, which is as below.

(1). Every application or petition presented before the Tribunal and every appeal filed before the Appellate Tribunal shall be dealt with and disposed of by it as expeditiously as possible and every endeavour shall be made by the Tribunal or the Appellate Tribunal, as the case may be, for the disposal of such application or petition or appeal within three months from the date of its presentation before the Tribunal or the filing of the appeal before the Appellate Tribunal. (2) Where any application or petition or appeal is not disposed of within the period specified in subsection (1), the Tribunal or, as the case may be, the Appellate Tribunal, shall record the reasons for not disposing of the application or petition or the appeal, as the case may be, within the period so specified; and the President or the Chairperson, as the case may be, may, after taking into account the reasons so recorded, extend the period referred to in sub-section (1) by such period not exceeding ninety days as he may consider necessary.

15. Therefore, it is clear from the above provisions that this Tribunal may exercise its discretion and permit any amendment to the pleadings within a period of thirty days from the date of completion of pleadings, in order to (i) rectify any defect or error in the proceeding before it, for the purpose of determining the real question or issues raised by or depending on such proceeding; and (ii) to facilitate expeditious disposal and determination of matters before it.

16. The above rule position further makes it clear that the NCLT Rules in general do not provide any right to the parties to file a petition for amendment of their respective pleading or prayer and the Tribunal is also not clothed with wide power, except the limited power, as mentioned and discussed above.

Section 424 of the Companies Act, 2013, which lays down the Procedure before Tribunal and Appellate Tribunal is as below.

(1) The Tribunal and the Appellate Tribunal shall not, while disposing of any proceeding before it or, as the case may be, an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice, and, subject to the other provisions of this Act ["or of the Insolvency and Bankruptcy Code, 2016] and of any rules made thereunder, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure. 11 (2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act ["or under the Insolvency and Bankruptcy Code, 20167, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit in respect of the following matters, namely: - (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavits; (d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872, requisitioning any public record or document or a copy of such record or document from any office; (e)issuing commissions for the examination of witnesses or documents; (17 dismissing a representation for default or deciding it ex parte; (g) setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and (h) any other matter which may be prescribed (3) Any order made by the Tribunal or the Appellate Tribunal may be enforced by that Tribunal in the same manner as if it were a decree made by ci court in a suit pending therein, and it shall be lawful for the Tribunal or the Appellate Tribunal to send for execution of its orders to the court within the local limits of whose jurisdiction, - (a) in the case of an order against a company, the registered office of the company is situate; or 12 (b) in the case of an order against any other person, the person concerned voluntarily resides or carries on business or personally works for gain. (4) All proceedings before the Tribunal or the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian Penal Code, and the Tribunal and the Appellate Tribunal shall be deemed to be civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973."

17. Section 422 of the Act, 2013, stipulates disposal of application or petition before the Tribunal or appeal before the Appellate Tribunal preferably within three months from the date of presentation before the Tribunal.

18. Therefore, from the rule position as above, it is quite clear that question of entertaining any petition for amendment of pleading or prayer after three months of filing of a petition in general, does not arise, except in special circumstances, to be recorded in writing Hence it is imperative for the petitioner to plead and establish special circumstances in order to succeed in the petition.

19. Before we proceed to decide the point as above, we wish to refer to the reliefs prayed in the CP 72/2008 by the petitioners.

(i). Setting aside the appointment of fourth, fifth, six, eighth and ninth respondents who were illegally appointed as directors at the EGM claimed to have been held on 01.04.2008 and consequently declare the forms 23 and 32 filed on 22.05.2008 as illegal and direct the Registrar of Companies, Andhra Pradesh, Hyderabad not to take on record the forms filed by the seventh Respondent in this regard;

(ii). Setting aside the illegal appointment of seventh respondent as Managing director of the first respondent company at the EGM claimed to have been held on 22.10.2007 and consequently declare the forms 23 filed on 22.05.2008 as illegal and direct the Registrar of Companies, Andhra Pradesh, Hyderabad not to take on record the form filed by the second respondent in this regard;

(iii). Setting aside the illegal delegation of authority to the second and seventh respondents at the EGM claimed to have been held on 22.10.2007 and consequently declare the form 23 filed on 22.05.2008 as illegal and direct the Registrar of Companies, Andhra Pradesh, Hyderabad not to take on record the form filed by the second respondent in this regard;

(iv). Setting aside the illegal removal of second, fourth, fifth petitioners and relatives of first and third petitioners as directors at the EGM claimed to have been held on 01.04.2008 and consequently declare the forms 23 and 32 filed on 22.05.2008 as illegal and direct the Registrar of Companies, Andhra Pradesh, Hyderabad not to take on record the forms filed by the second respondent in this regard;

(v). Setting aside the illegal shifting of registered office of the first respondent company and consequently declare the form 18 filed on 22.05.2008 as illegal and direct the Registrar of Companies, Andhra Pradesh, Hyderabad not to take on record the forms filed by the second respondent in this regard;

(vi). Any other order as may be deemed fit by the Hon’ble Bench.

20. The prayer now sought to be included by way of amendment is as below:

(i) To amend the prayer in main CP.No.72/2008 by adding the following prayer after prayer portion of CI .805 as Prayer CI.8.6.

“That all the actions of the Respondents 2 to 9 in 1st Respondent Company in reducing the share capital with respect to petitioners and other shareholders and further new allotment of shares to Respondent No.3,4,7,8&9 and to dead persons without any resolutions in Board meeting or AGM/EGM during the pendency of the Company Petition as invalid, illegal and all the illegal actions be treated as null and void”.

(ii) to file additional pleadings in main CP.No.72/2008( T.P.30 of 2016) after para 6.13 as Para 6.13A to 6.13P, corresponding to all the verbatim pleadings from para 2-18 and (1) which is actually para 19 in C.A.No.6 of 2023 in C.P.72 OF 2008(T.P.30/2016)

(iii) to add the prayer which has been mentioned in CA 06/2023.

(iv) and to receive the documents filed in C.A.6 of 2013 in C.P.72/2008(T.P.30/2016)

21. Thus, from the pleadings and the prayer in this petition it is not in dispute that by way of amendment, the portioners herein intend to carry out amendment by bringing in certain pleadings relating conduct of board and general meetings of the company and the decisions taken therein, which according to the petitioners are grossly illegal. Therefore, it is clear that the petitioner’s way of amendment raised a question about the legality of the board and the general meetings of the company held in the year 2011-2012 i.e. post filing of the company petition which is unrelated to the allegation of 'oppression and mismanagement' made in the original petition. Thus, the proposed amendment relates to a different cause of action as took place in the year 2008 when the company petition was filed.

22. It is settled law that the Tribunal was not competent to allow petition for amendment with regard to separate cause of cause in respect of which no pleading was made nor any prayer made in the original application under Section 241.

Hon’ble NCLAT, in Aurosagar Estates 'Private lirnl pp Haut Vs M C Davar Holdings Private Limited, Company Appeal (AT) No. 100 of 2017. Which arose out of Judgment dated 10th March, 2017 passed by National Company Law Tribunal, Mumbai Bench, in Miscellaneous Application No. 90 of 2016 in Company Petition No 18/241/NCLT/MB/Mah/2016, held that;

“It is not in dispute that by way of amendment, the Respondent requested to carry out amendment with regard to proceeding dated 15th October 2012 whereby Article of Association of the Appellant company was amended. Therefore, it is clear that the Respondent by way of amendment raised a question about the legality of amendment of Article of Association as took place on 15th October 2012, unrelated to the allegation of 'oppression and mismanagement' made in the original petition. 24. As the amendment petition related to a different cause of action as took place in October 2012, we are of the view that the Tribunal was not competent to allow the petition for amendment with regard to separate cause of cause in respect of which no pleading was made nor any prayer made in the original application under Section 241.

“In the present case we have observed that the Tribunal otherwise is not empowered to amend any petition except to the extent as prescribed under the Act and the Rules; the Tribunal cannot allow substantial amendment to the petition/application/appeal, on merely asking for it, unrelated to the original cause of action or prayer, though it is open to the Tribunal to allow the party to file additional affidavit! reply affidavit bringing to the notice of the Tribunal the other relevant fact which are related to the original cause of action and the prayer as has already been made. In any case the Tribunal cannot allow any petition for amendment with regard to a fresh cause of action other than the cause of action for which the petition under Section 241 of the Companies Act, 2013 has been preferred”.

23. The facts and circumstances pleaded in this petition are similar to those referred in the ruling, supra, as such the above ruling above is squarely applicable to the case on hand. That apart, the petitioner has neither pleaded any special circumstances nor do they exist in this case, in order to succeed in the petition. This application having filed after a decade and half, therefore, cannot be entertained.

24. Even though the plea of limitation in an Application seeking amendment need not be gone into at the stage of considering the amendments, Prima-facie, we are of the opinion that there is no satisfactory explanation, forth coming from the Applicants, for filing of this Application after lapse of nearly a decade.

25. It is also contended that the allotees of the shares also including of the death person. In support of the plea death certificate of Late Ram Sharan Sanghi, has been filed. In so far as the prayer for receiving the documents is concerned, admittedly the documents that the petitioner intended to take on record now related to the additional prayers sought. Since the petition for leave to add additional pleadings by way of amendment has been dismissed, the documents cannot be received.

26. Therefore, this petition being devoid of any merit or substance is liable to be dismissed, accordingly the same is hereby dismissed, however without costs. In the result the petition is dismissed. However without costs.