NCLT Mumbai Allows Amendment In Oppression Petition After Expiry Of Limitation Period

The Mumbai Bench of the National Company Law Tribunal on 23 February allowed an amendment to a company petition under Rules 11 and 155 of the NCLT Rules, 2016, holding that a delay in filing amendments does not prevent changes needed to address the real issues, especially when the new facts could not have been discovered earlier.

A Bench, comprising Technical Member Anil Raj Chellan and Judicial Member K.R. Saji Kumar, was hearing an interlocutory application filed by Tirupati Sankalp Realtors Pvt. Ltd. seeking amendment of a petition instituted under Sections 241 and 242 of the Companies Act, 2013.

The Bench observed:

“ Thus, the proposed amendments do not, in our view, change the basic structure of the proceedings, and it is necessary for the purpose of determining the real controversy between the parties, as the entire issue revolves around the shareholding of the Applicant.

Tirupati Sankalp Realtors, the petitioner, alleged oppression and mismanagement in the affairs of Ruhi Realty Pvt. Ltd. It claimed it held 1,000 equity shares, constituting 10% of Ruhi Realty's paid-up share capital, but the company's records wrongly showed only 500 shares. The petitioner also alleged that it was not served notices for general meetings and that the company's affairs were being conducted without transparency.

During the pendency of the petition, the petitioner was granted inspection of certain records of Ruhi Realty. The inspection revealed several irregularities, including improper maintenance of statutory registers, discrepancies in the register of members, irregularities in the appointment and disqualification of directors, and instances where annual general meetings were allegedly conducted without issuing proper notices to shareholders.

In light of these findings, the petitioner sought to amend its petition to incorporate additional facts and reliefs arising from the inspected documents.

Ruhi Realty opposed the amendment, arguing that it was filed at a belated stage, after pleadings were complete and the matter had reached final arguments. It contended that the application was barred by limitation and that the petitioner was attempting to introduce new claims relating to rectification of records.

The Tribunal rejected Ruhi Realty's objections, holding that the application was within the limitation period, particularly considering the exclusion of limitation during the COVID-19 pandemic as directed by the Supreme Court.

The Bench also noted that Rule 155 of the NCLT Rules, 2016, which deals with amendment of pleadings, does not limit the Tribunal's inherent powers to allow amendments where necessary to achieve the ends of justice.

It observed that the proposed amendments did not alter the basic structure of the proceedings and were essential to adjudicate the dispute over Tirupati Sankalp Realtors' shareholding and the alleged acts of oppression and mismanagement by Ruhi Realty.

Accordingly, the Tribunal allowed the petitioner's amendment.

For Applicant: Adv. Shrey Fatcerpekar a/w Adv.Pooja Bimal Mehta.