NCLT Bengaluru Condoned 36-Day Delay In Filing Section 58 Petition On Medical Grounds

The National Company Law Tribunal, Bengaluru Bench, has condoned a delay of 36 days in filing a petition under Section 58 of the Companies Act, 2013, holding that the medical reasons cited by the applicants constituted sufficient cause under Section 5 of the Limitation Act, 1963.

Background

The applicants filed the main company petition under Section 58 seeking rectification of the register of members of M/s Vistara Media Private Limited, asserting that despite having purchased equity shares and optionally convertible preference shares, the company had refused to register their names as members. Consequential reliefs were also sought, including directions to make the applicants joint signatories to the company’s bank accounts. The petition, however, was filed with a delay of 36 days, prompting the applicants to move the present application seeking condonation of delay. The applicants attributed the delay to medical exigencies, stating that Applicant No. 1 had fallen seriously ill while they were at their native place, and Applicant No. 2 had to attend to her, preventing timely instructions to counsel. Medical certificates and treatment records were placed on record in support.

Respondent Nos. 5 and 6 opposed the application, contending that the main petition itself was not maintainable in the absence of a valid share transfer under Section 56 of the Companies Act. It was argued that mandatory requirements such as delivery of Form SH-4 and share certificates had not been complied with, and that the applicants had failed to disclose the date of delivery of transfer instruments or produce proof thereof. It was further submitted that the applicants had been negligent and were not entitled to discretionary relief.

Findings

The Tribunal confined itself to the limited issue of condonation of delay and declined to examine the merits of the underlying Section 58 petition at this stage. Upon perusal of the medical records and certificates produced, the Bench found the explanation for delay to be bona fide and adequately substantiated. The Tribunal held that the delay was neither deliberate nor intentional and that the applicants had shown sufficient cause within the meaning of Section 5 of the Limitation Act.

Allowing the application, the NCLT condoned the delay of 36 days in filing the Section 58 petition. The matter was directed to be listed for hearing on the main petition.