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C.A. No. 180 of 2007. Case: A.N. Somasundaram and Anr. Vs Reddy's Laboratories Ltd. and Ors.. Company Law Board

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Case Number:C.A. No. 180 of 2007
Party Name:A.N. Somasundaram and Anr. Vs Reddy's Laboratories Ltd. and Ors.
Counsel:For Appellant: L. Palanimuthu and For Respondent: B. Ravi
Judges:K.K. Balu, Vice-Chairman
Issue:Limitation Act, 1963 - Section 5; Companies Act, 1956 - Section 111(A)
Citation:2008 (2) CLJ 380, 83 CLA 398, 142 CompCas 472
Judgement Date:October 20, 2007
Court:Company Law Board

Order:

K.K. Balu, Vice-Chairman, (At Chennai)

This company application is filed under section 5 of the Limitation Act, 1963, for condonation of delay of 1,884 days in making necessary petition under section 111A of the Companies Act, 1956 ("the Act") before the Company Law Board to direct M/s. Dr. Reddy's Laboratories Ltd. ("the company") to register the transfer of 100 shares comprised in share certificate Nos. 283 and 284 with distinctive Nos. 559001 to 559050 and 559051 to 559100, respectively, in favour of the applicants, for the reasons set out therein, in support of which Shri L. Palanimuthu, learned counsel submitted that on submission of the original share certificates together with the transfer forms to the company for effecting the transfer in favour of the applicants, the company had returned the transfer forms in February, 2002, without any proper justification. The applicants filed a civil suit before the District Munsif Court, Thanjavur, challenging the company's action, as advised in the matter. However, the plaint was returned by the civil court for approaching the competent forum under the Act. By this process, there was a delay of 1,884 days in approaching the Company Law Board. The delay is neither wilful nor wanton but due to the reasons stated here above by the applicants.

Shri B. Ravi, learned authorised representative, opposed the prayer of the applicants on the ground that the application suffers from lack of details. The transfer documents have been returned by the company as early as in early 2002, but the applicants approached the civil court only in the year 2006 after a delay of four years and eight months and there is no explanation from them for this inordinate delay. The applicants further failed to apply before the Company Law Board within the period stipulated by the civil court or produce copy of the order of the civil court for which no sufficient reasons are furnished by the applicants. The applicants are careless and the delay of 1,884 days is wilful. The Company Law Board will not go in aid of the applicants, who are negligent in enforcing their rights, which are to be declined, putting an end to the harassment meted out to the company.

I have heard the arguments advanced for the parties. The short issue before me is whether the applicants have shown sufficient cause for condoning the delay of 1,884 days in making the application under section 111A before the Company Law Board...

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