Mr. Harti Venkataravanppa Dharmesh vs Smt. Kamalapuri Narasimaih Jayalakshmi

(Hybrid Mode)

[Per: Justice Sharad Kumar Sharma, Member (Judicial)]

The Appellant happens to be Respondent No. 2, in the proceedings of C.P. No. 74/BB/2025, in the matters of Smt. Kamalapuri Narasimaih Jayalakshimi and Anr. v. M/s. Vistara Media Private Limited and Ors, who has expressed his grievances against the impugned order rendered by the Ld. Tribunal in the Company Application C.A. No. 103/2025 filed in CP/74/2025.

CA No. 103/2025 was preferred by the Petitioners to the company petition, wherein they had sought a condonation of 36 days of delay that has chanced in preferring the petition under Section 58 of the Companies Act, 2013. By the virtue of the impugned order dated 06.02.2026, the delay that was sought to be condoned, has been condoned. It is the aspect of condonation of delay that is subject matter of challenge in the instant company appeal.

The Appellant / Respondent No. 2 in the company petition, questions the impugned order of condoning the delay of 36 days on grounds, that condonation of delay is not permissible within the ambit of the provisions contained under Section 58 (3) of the Companies Act and that the delay ought not to have been condoned by the Ld. Tribunal, while exercising its inherent powers under Rule 11 of the NCLT Rules. Further, it has been submitted by the Ld. Counsel for the Appellant, that since the condone delay application did not accompany the company petition itself, the same ought not to have been entertained at a later stage to condone the delay, in the light of the provisions contained under Section 58 (3) of the Companies Act.

It is contended that despite the objection having been raised by the Appellant / Respondent No. 2, the delay has been condoned without providing an opportunity him to controvert the pleadings of the condone delay application. At this stage it is relevant to point out and which has been argued by the Ld. Counsel for the Respondent No. 1 & 2 to the instant company appeal, who were the petitioners, to the condone delay application that when the condone delay application came up for consideration before the Ld. NCLT, Bengaluru bench, the Appellant was granted several opportunities to file objection to the condone delay application, but "no objection was filed by the Appellant" herein.

In that eventuality, the facts and the grounds that were taken in the condone delay application by Respondent No. 1 & 2 remained uncontroverted at the behest of the Appellant. In fact, the written objection was raised to the condone delay application only by Respondent No. 6 & 7 to the company appeal.

Section 58 of the Companies Act, prescribes for preferring of an appeal to Ld. NCLT as against the refusal of registration in a situation where a private company which is limited by its shares, refuses to register the transfer or transmission by operation of law of rights to, any securities or interests of a member of the company.

The provisions contained under Section 58 (3) of the Companies Act, prescribe that the transferee may appeal to the Ld. Tribunal as against the refusal of the company to register the transfer within 30 days from the date of the receipt of the notice or where there is no notice has been sent by the company, within 60 days from the date on which the instrument of transfer or the intimation of transmission, as the case may be was delivered to the company. The provisions contained under Section 58 (3) is extracted hereunder: -

In the instant case, the company petition was preferred by Respondent No. 1 & 2 herein, by filing the same before the Ld. Tribunal on 21.05.2025 praying for recording of their names (of the Petitioners 1 & 2 therein, i.e., Respondent No. 1 & 2 herein), in the Register of Members of Respondent No. 1 company, on the ground that, they would be having their rights to get their name registered in the Register of Companies on basis of facts and circumstances narrated in the company petition. But at this stage we do not wish to deal with the merits of the said claim for the reason being that, it may have an adverse bearing on the proceedings when it is taken upon on merits before the Ld. NCLT or any other platform and we will confine ourselves to consider the aspect of condonation of delay, in the impugned order rendered by the Ld. Tribunal, condoning the delay of 36 days in filing of the company petitions.

The Respondent No. 5 & 6, who had filed their objections on 05.01.2026 and 06.01.2026, had submitted that, the aspect and reasons pertaining to the condonation of delay, under Section 58 of the Companies Act, would not be tenable in the absence of there being a valid and lawfully recognised share transfer with them in accordance with Section 56 of the Companies Act, which too would be a vital aspect relating to deciding the question regards the maintainability of the petition under Section 58 of the Companies Act, but that in itself will not be having any exclusive impact so far it relates to the issue of condonation of delay, to sustain the proceedings under Section 58 of the Companies Act.

Another ground taken by Respondent No. 5 & 6 before the Ld. Tribunal, was that mandatory procedure as it was contemplated required a physical submission of Form SH-4 which was not done, nor the relevant share certificates were ever received by the company or were even placed before the Board of Directors for its approval. Once again, this would be an issue, which would be required to be considered on merits at the stage, when Section 58 application is considered on merits by the Ld. Tribunal. And lastly, Respondent No. 5 & 6 in the company petition submitted that, owing to the fact that the Applicants / Respondent No. 1 & 2 herein, in the company appeal have not shown their due diligence and had stepped over their rights while mentioning the date of execution in Form SH-4, that they have not disclosed the date on which the instrument of transfer was allegedly delivered to Respondent No. 1 company and that, in the absence of there being a documentary proof, the delay, which has been sought to be condoned in the proceeding under Section 58 of the Companies Act ought not to be considered.

We make it very clear that in the proceedings of the company application CA No. 104/2025 in which the impugned order was passed the impugned order condoning the delay of 36 days, only Respondent No. 5 & 6, had filed theier objections, and the same has been narrated by this Appellate Tribunal in the preceding paragraphs. But the fact remains that, after passing of the impugned order of allowing the condoned delay application, the Respondent No. 5 & 6, are not before this Appellate Tribunal in a company appeal, having expressed any grievance, as against allowing of the Condone Delay Application, even though Respondent No. 5 & 6 of the company petition, are represented in the present proceedings by Ld. Counsel Mr. K. Gaurav Kumar, who opposed the motion of appeal. But then the question would be that whether at all Respondent No. 5 & 6, in the absence of giving an independent challenge to the impugned order of 06.02.2026, can still question the propriety of the impugned order, condoning the delay in a proceedings on the present company appeal, initiated at the behest of Respondent No. 1 & 2 to the company appeal? Obviously, the complete answer would be ‘no’, as it will amount to, that the Respondent No. 5 & 6 who are presently represented by Mr. K. Gaurav Kumar, were conscious of the fact of passing of the order of condonation of delay, and yet they had not sought to challenge the impugned order independently by filing of a company appeal and rather had chosen to voluntarily participate in the proceedings of the instant company appeal even without filing a cross-objection to the appeal.

So far as the present Appellant is concerned, he happens to be Respondent No. 2 to the company petition, as observed in the proceedings before Ld. NCLT, to whom Ld. Tribunal had granted sufficient opportunity to file objection to the condone delay application and even thereafter he did not file his objections. Upon being asked by this Appellate Tribunal, Ld. Counsel for the Appellant has ultimately admitted that he did not file any objection to the condone delay application thereafter he tried to change his argument, contending thereof that the senior counsel who was representing cause of the Appellant before the Ld. Tribunal, had placed his oral argument only qua the opposition of the condone delay application. It is difficult for this Appellate Tribunal, to appreciate this argument of the Ld. Counsel for the Appellant, as to on what grounds the Ld. Senior Counsel has opposed the condone delay application when the matter was taken up by the Ld. Tribunal, while passing the impugned order on 06.02.2026.

In that eventuality, when despite opportunity having being granted, the Appellant has chosen not to file any objection to the delay condonation application, it will be deemed that grounds taken in the condone delay application at the behest of the Appellant remained uncontroverted. But still considering the arguments raised, we will precisely deal with the pleadings that has been raised in the condone delay application and the argument extended by the Ld. Counsel for the Appellant while opposing the said application, though orally, as well in the shape of the instant company appeal. The pleadings of the Applicants (Respondent No. 1 & 2 herein) in the company petition was that the Applicant No. 1 was appointed as an Additional Director of Respondent No. 1 Company on 24.08.2024, and she was illegally removed from the directorship. Subsequently, that eventhough she is said to have purchased 1,16,04,000 equity shares from Respondent No. 2, herein after paying a valuable consideration, and Applicant – 2 had purchased 1,13,25,000 equity shares and 1,03,93,652 optionally convertible preference shares from the Respondents, their names have not been entered in the Register of Members of the Respondent No. 3 company and therefore, directions may be issued to be enter their names in the Register of Members and to make them Directors in the said company.

The Applicant / Respondent No. 1 & 2 contended in the condone delay application that, upon the rights having been created in favour of the Applicant / Respondent by transfer of shares as it was referred to in the application, they filed a petition under Section 58 of the Companies Act, for the purposes of seeking direction to direct the Respondents to enter the name of the Petitioner as members in the Register of Members of Respondent No. 1 Company, since having duly and validly purchased the equity shares and optional convertible preference shares of Respondent No. 1 Company. But since there was a refusal to register their names, the necessity arose for the Applicants (Respondent No. 1 & 2 herein) to initiate the proceeding under Section 58 of the Companies Act, because the correspondences made by the Petitioner No. 1 & 2 on 17.02.2025, which was followed by the email of 13.03.2025 remained unresponded, and their name were not permitted to be registered in the Register of Members of the Respondent No. 1 company. However, there was a delay of 36 days in filing the said petition because of medical reasons which they have prayed for to be condoned.

The Ld. Counsel for the Appellant in his Memorandum of Appeal has taken a ground, particularly that as contained under Para 9.3, that the Applicant has utterly failed to establish sufficient cause for condonation of delay and hence the delay should not have been condoned. If that be the tenacity of argument, that 'sufficient cause' has not been established, then the said argument of the Appellant does not appear to be based on evidence, as he has not attempted to deny the contents of the medical certificate and medical grounds, specifying the ailments, which is pleaded to have caused the delay. Further, ailment itself would be a sufficient cause for delay and will have to accept on the face of it to be true and genuine, when the documents establishing ailment remain uncontroverted.

Besides that, it is a settled principle of law that "sufficient cause" contemplated under any law need not mean a "good cause". It's only a prima facie satisfaction, which is required to be recorded for the purposes of rendering a substantial justice, for adjudicating a dispute on merits rather than on technicalities of limitation, and it has to be liberally construed in the interest of dispensation of justice on merits. Sufficient ground should apparently show to be reasonable and acceptable under a common and reasonable prudence, which would be generally acceptable by simple rationale.

A very peculiar argument has been raised by the Ld. Counsel for the Appellant, that the memo dated 05.01.2026 had been filed by the Petitioner's counsel, not by the Petitioner. We are of the view that the Appellant is oblivious of the conditions, as it is produced in the shape of vakalat, in the judicial proceedings where the party to the proceedings intends his or her cause to be represented by a counsel. The vakalath itself is a contract between the Litigant and his Counsel and it confers within it the power to appear, argue, plead, sign and verify the pleadings including the present application, pleadings, and appeals, and even to take back the documents. These clauses contained in vakalatnama, in itself will vest a sufficient authority with the counsel to file a Memorandum on behalf of Respondent 1 & 2. Merely because a memo has been filed by the Counsel that in itself will not prevent the memo from being read for the purposes of seeking condonation of delay, more particularly when the contents or even the acceptability of memo was not a question that was raised by the Appellant before the Ld. Tribunal.

The reason for delay that was given in the application was that since the Petitioners were travelling, the Petitioner No. 1 fell sick and Petitioner No. 2 being the son, was taking care of her, they were not in a condition to travel to Bangalore to instruct their Counsels to prefer the proceedings under Section 58 of the Companies Act, within time and thus there had chanced an inadvertent delay of 36 days which, according to Respondent No. 1 & 2, deserve to be condoned.

The Appellant / Respondent No. 2 to the company petition, claims to have opposed condone delay applications, without filing any written objections, on the ground that the number of days that has been sought to be condoned will be outside the ambit under Section 58 (3) of the Companies Act, and that it cannot be condoned, because no specific power has been vested with the Ld. Tribunal to condone the delay under Section 58 (3) of the Companies Act. On the other hand, the Respondent No. 1 & 2, in support of their condone delay application as filed in the proceedings under Section 58 of the Companies Act, had filed a memo before the Ld. Tribunal, on 05.01.2026, annexing therewith the medical documents to fortify the fact about the ailment of Petitioner No. 1, annexing therewith the medical records.

A hyper-technical argument has been raised by the Ld. Counsel for the Appellant, that memo in itself cannot be reckoned as to be a procedure to take document on record, which could be considered for the purposes of condonation of delay. But it is seen that he has not raised the said objection, at the first opportunity and no such written objection has been filed by him at the stage of inception of the proceedings when the delay was being considered, further, he didn't object to the contents of the medical certificates annexed along with the memo. In that eventuality, the Ld. Tribunal, has not erred in condoning the delay while exercising its inherent powers under Rule 11 of the NCLT Rules, in order to meet out the object of rendering substantial justice, especially when the contents of the document itself is not disputed. Further, in the memorandum of appeal, which has been presented before this Appellate Tribunal, the Appellant doesn't deny the veracity of the medical certificate issued by the doctor. In that eventuality, the Appellant cannot take the stand that the documents placed on record by the Applicants ought not to have been read in evidence for the purposes of condonation of delay.

The proceedings contemplated under Section 58 of the Companies Act, can be split into two parts.

Hence, in a situation where the Appellant doesn't controvert the contents of the medical documents, and where, the said documents are only being utilized for the purposes of enabling the Ld. Tribunal to reach to a conclusion while exercising its inherent powers under Rule 11 of the NCLT Rules for condonation of delay, the uncontroverted documents can still be read by the Ld. Tribunal, for the purposes of considering the condone delay application, which does not have any implication on merits of Section 58 proceedings. Hence, the argument extended pertaining to non-admissibility of the documents being taken on record to be read for the purposes of condonation of delay is not acceptable by this Appellate Tribunal.

In the proceeding under Section 58 of the Companies Act, it is prescribed that preference of the appeal should be within 30 days from the date of receipt of the notice of refusal. It is to be noted that the time limit of 30 days is not a fixed feature. In case, the notice of refusal is not received, the time limit will be 60 days from dated on which the instrument of transfer or intimation of such transmission, as the case may be, is delivered to the company. Thus, the time limit is a variable feature depending upon the fact of each case, and therefore it is not to be stringently construed to deceive the object of merit adjudication.

We are of the view that any provision of law where aspect of limitation could be determined based upon happening of an incident, referred to in the provision itself dealing with the aspect of condonation of delay or prescribing for a limitation, that period of filing of an appeal will in itself be not stagnant or stringent in nature, but rather would be variable and if the said provision of limitation for the purposes of preference of an appeal is variable, it is not to be dealt with a stringent yardstick when it falls for consideration for condonation of delay in the light of the provisions contained under Rule 11 where the Ld. Tribunal could exercise its inherent powers for condoning the delay, which is to be read with provisions contained under Section 433 of the Companies Act.

By virtue of the provisions contained under Section 433 of the Companies Act, the provisions of the Companies Act will apply in its entirety. Section 58 of the Companies Act, in itself doesn't prescribe any fixed upper limit of limitation as given therein is not condonable. In that eventuality where a provision of appeal doesn't prescribe a maximum period of limitation, in that eventuality the provisions contained under Section 433 of the Companies Act is to be read with Section 29 of the Limitation Act will come into play, which prescribes that under the Savings Clause of the Limitation Act in its Sub-Section (2) reads as under: -

which prescribes that under special or local law, which prescribes for a suit, appeal or an application, a specific period of limitation, different from that period prescribed under the schedule, the savings contemplated under Section 29 of the Limitation Act will come into play. And in that eventuality, the argument extended by the Ld. Counsel for the Appellant, that Section 58 (3) of the Companies Act doesn't contemplate a condonation of delay, cannot be accepted by this Appellate Tribunal.

The Ld. Counsel for the Appellant has referred to ground number 9.1 about the ambit of exercise of inherent power as contemplated under Rule 11 of the NCLT Rules, in context of the ratio propounded by the Hon’ble Apex Court in the judgment of The Property Company (P) Ltd vs Rohinten Daddy Mazda has reported in 2026 INSC 33 and particularly he has made reference to Para 100, as to, up to what extent the inherent powers could be exercised for the purposes of the circumstances of the instant case where the aspect of delay condonation is being under consideration. The argument extended by the Ld. Counsel for the Appellant in context of the ratio propounded in the matters of The Property Company (P) Ltd (Supra), there cannot be any doubt about the said principle about the limit of exercise of inherent powers, which is that any statute when it confers an inherent power, the said power is an extraordinary power which is granted to the Tribunal or the Courts to meet a contingency or a situation which could not be contemplated of, under the statute, and to facilitate Ld. Tribunal to meet the ends of justice.

The restriction of inherent powers as dealt in the judgment of the Property Company (P) Ltd (Supra), will not be applicable under the circumstances of the instant case particularly when, in the given set of circumstances, and that too in the light of the provisions contained under Section 58 (3) of the Companies Act, where period of limitation is required to be extended, it could be only done by virtue of attracting the principles enunciated in the Limitation Act as made applicable by Section 433 of the Companies Act and since there is no specific provision for prescribing an upper limit condonation of delay beyond a certain specified limit could very well be done by exercising powers under Rule 11 to ensure that party to the proceeding is not deprived of his right of judicial remedies as envisaged and preserved by the Constitution of India.

In the situation herein, it is not that the Ld. Tribunal, has exclusively relied upon its inherent powers under Rule 11. Looking to the nature of the order, it will be evident that the Ld. Tribunal has exercised its power well within the ambit as prescribed under Section 433 of the Companies Act, and mere reference of Rule 11 by the Applicant in his application will not make the impugned order, to have been rendered by the Ld. Tribunal exclusively while exercising the powers under Rule 11 of the NCLT Rules. Procedural rules contemplated by the provisions contained under the NCLT Rules will not over-ride the provisions of the principal statute, which in itself has got an in-built mechanism of condonation of delay by prescribing for the provisions contained under Section 433 of the Companies Act, which is to be read in context of Section 29 of the Limitation Act in the instant case.

Though not relevant, but looking to the tenacity of argument, we would not hesitate to observe that the Appellant had not availed these opportunities before the Ld. Tribunal by filing an objection, despite the opportunities having been granted. Having not done so, it will be deemed that he has accepted the grounds taken by the Respondent No. 1 & 2 in their application for condonation of delay. Further, since condonation of 36 days of delay, rather facilitates Ld. NCLT to meet the ends of dispensation of justice by being able to decide a controversy on merits of the matter, it doesn't require any interference by this Appellate Tribunal in the exercise of our appellate jurisdiction.

Hence, the company appeal lacks merit, and the same is accordingly dismissed. All pending interlocutory applications would stand closed.

[Justice Sharad Kumar Sharma] Member (Judicial) [Jatindranath Swain] Member (Technical) 22/04/2026